Bidding on a house advice

adocholiday

Hi all,

I put a fairly low-ball bid in for a house last week that's on the market for €460k. It has been on the market for over a year with little interest. The bid was rejected (as I assumed it would be), and the EA also told me that they were lowering the sale price to €415k try to generate more interest. The ad has since been updated with the new price.

I'm thinking that this is their way of forcing our hand to pay the new asking price, but we feel that we could possibly get a better deal here. What we're expecting is that we go in with a higher bid, and that there'll be another higher bid on the property within a few days (genuine or not who's to know).

So the way I see it is we've 2 options. 1 is we offer near the new asking price now and see does it get accepted, possibly paying more than we could get the house for. 2 is we take a chance and offer a higher price, but still below asking. If another bid comes in then we have to either react and go higher, or take the chance and walk away, hoping that it's either a fake bid or that the other buyers pull out.

Is there a general way to play this to our advantage? We're first time buyers so pretty clueless with all this stuff.

listermint

Go with your gut. Offer some more but not the asking it's a negotiation but you have to be willing to not go crazy and walk away.

It's your money after all don't be giving it away if you don't have to

If it's on sale for that length of time then it is certainly over priced. There massive drop means they are trying to stimulate interest but that's not guaranteed.

noel100

Where is the house situated. Dublin or country.
Location is everything for selling a house.
Most towns won't achieve 460 for a house unless it is impeccable and great location and of adequate size.
We are in the process selling our house and we are still below 40-50% below peak but the house we are interested is the same 40-50% below peak. We are trading up from 4bed to 5bed and extra space for less than cost of an extension.

bbbbb

I assume you have the necessary funds or mortgage approval in place?
The job of the agent is to get the best deal for their client, i.e. The seller, not you.
Ultimately you need to decide what the house is worth to you; What is the maximum you are willing to pay, and what price are you willing to walk away at ("phantom bidder" or not)
Best of luck.

riclad

See what other houses are going for in the area. Look at the house price register .
lets say they go for 400k, bid between 400 and 415k.
Agents have no interest in putting a house on the market at unrealistic price.
say it costs 150-200 k to build a house ,the rest is based on location ,
Is it near schools, shops , dart, railway station , roads.
a house in an estate with 20 houses may be worth more ,
than one in an estate a mile away that has 200 identical house,s .
maybe its a very nice house ,but its 20 minutes from the nearest town .
or its simply over priced.
agents get maybe 2 per cent of the sale price.
Its not worth their while making up a bid , its thats what you are
suggesting will happen.
Do,nt bid more than you think its worth .
look on daft.ie ,myhome.ie ,
what or similar spec house,s going for?

Mellor

adocholiday wrote: »

I'm thinking that this is their way of forcing our hand to pay the new asking price, but we feel that we could possibly get a better deal here.

They can't force your hand with anything here.
If they've dropped it to €415k they are likely happy enough for you to pay that price, which suggests it's not their rock bottom price - it could well be if the owner is fed up of negotiations going no where.

All really depends on how much lower your offer is and how much you want to spent

Heres Johnny

The agent will have no interest in a phantom bid but the sellers might.
Worth 2% to the agent, 98% to the seller.

Pick what you are happy to pay for the house (dictated by your affordability and mortgage approval of course) and stick to your guns.
Play the game up to that point but don't go over budget.

adocholiday

Thanks all for the replies. To follow up on some of them: We put a case for our bid together based on current market value of other properties in the area, price history for sales in the area, the location of the house, work to be done etc. It was clear that the house was overvalued for the location and I think that contributed to the house dropping in price.

We have mortgage approval for the original asking price, so that's not a problem. The issue for us is that we know we could probably get it for €400k given how long it's been on the market etc. but we're probably going to end up bidding against ourselves up to the asking price or near it. I think we might just nip it in the bud, bid €405k or something and say we're walking away at anything higher than that.

Bass Reeves

Heres Johnny wrote: »

The agent will have no interest in a phantom bid but the sellers might.
Worth 2% to the agent, 98% to the seller.

Pick what you are happy to pay for the house (dictated by your affordability and mortgage approval of course) and stick to your guns.
Play the game up to that point but don't go over budget.

While 2% of an extra 10K is small beans on a 400K house often an auctioneer is dealing with vendors expectations. The auctioneer is really trying to secure a 5-8K comission depending on % sales commission in play. The extra 00 is not the issue it is what he need to do to get the deal over the line.
,
Often talking to him can be the solution. Explain you have finance in place to push deal through fast but that 400K is the maximun. It is in his interest then to push vendor to accept to sevure his commission. To really win a war like this you have to be willing to walk away. The problem with this is in a hot market you can lose as you may pay more for a less suitable property.

You really have to decide if you are willing to buy at there new price. Often dropping prices brings new buyers into play.

Meeeee79

People always over think bidding on properties. If you want the house badly enough, offer what you are willing to pay. If you dont and are willing to risk it to save afew thousand euro hold out and make a lower offer in afew weeks.

Cuddlesworth

Bass Reeves wrote: »

While 2% of an extra 10K is small beans on a 400K house often an auctioneer is dealing with vendors expectations. The auctioneer is really trying to secure a 5-8K comission depending on % sales commission in play. The extra 00 is not the issue it is what he need to do to get the deal over the line.
,
Often talking to him can be the solution. Explain you have finance in place to push deal through fast but that 400K is the maximun. It is in his interest then to push vendor to accept to sevure his commission. To really win a war like this you have to be willing to walk away. The problem with this is in a hot market you can lose as you may pay more for a less suitable property.

You really have to decide if you are willing to buy at there new price. Often dropping prices brings new buyers into play.

This, talk to the agent.

"The house has been on the market for a year. What price will they sell at?"

He will probably give you a price slightly high of what he thinks is their lowest price. Let him work you up to near it over a week or two. Don't ring every day.

If the price is way too high, walk away. He wants to sell but he can only sell at the price they can accept and he would have a fair idea of it at this point.

If its something you want then take your time.

Graham

adocholiday wrote: »

The issue for us is that we know we could probably get it for €400k given how long it's been on the market etc.

The evidence suggests otherwise. It sounds like the vendors are quite prepared to sit it out.

There's a chance the vendors have no intention of selling below even their original asking price with the recent reduction being an exercise in generating interest.

GingerLily

Graham wrote: »

adocholiday wrote: »

The issue for us is that we know we could probably get it for €400k given how long it's been on the market etc.

The evidence suggests otherwise. It sounds like the vendors are quite prepared to sit it out.

There's a chance the vendors have no intention of selling below even their original asking price with the recent reduction being an exercise in generating interest.

If the sellers are not in a hurry, why would they sell under the price they want? The market is mad at the moment, they just have to wait...

riclad

It depends on where its located,
the market is rising in dublin and citys where theres not much house,s
being built.Not so much in rural area,s or small towns.
Just work out what you think the house is worth.
Maybe bid 400 0r 405k and see what the agent says.
i,m curious is there no other houses for 350-400 k in the area.
Or maybe its in a small estate where theres only a house for sale once in 5 years.
my friend sold her house for 340k
its was in small enclosed estate ,eg walls all around it.
with 26 houses in it,
With a large green space in the centre .

skerry

It all depends on the sellers situation. We had a similar situation where seller was asking way too much for the house. We put in a low offer just to get discussions going which the seller scoffed at. We then worked up to our limit and still no dice so we bowed out as we were getting into the bidding against yourself kind of territory once we went above what we thought it was worth.

It was clear at the time the seller was happy to sit on the property. Got a call about 6 weeks later from EA trying to squeeze more cash out of us and we stuck to our guns and didn't budge on our offer that was declined 6 weeks earlier cos we knew that, once they were back making contact with us, that they had seen something they wanted to move on and all of a sudden there was urgency on their end. We were Sale Agreed a half hour later.

Basically set a limit as mentioned earlier and stick to it.