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The psychology of bidding in 5k (or other) increments

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    #62
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    awec wrote: »
    We are not talking about a cash lump sum. We're talking about the effect of a sub-1% increase in your mortgage payment.

    Its coming out of savings/cashlumpsum for some people- its not a given that its coming out of a mortgage for everyone- simply, its not. Not everyone's situation is comparable- some have savings, some don't- some have access to higher borrowing capacities- others don't.


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    #63
    awec
    Administrators Posts: 53,796 Admin ✭✭✭✭✭awec


    The_Conductor wrote: »
    Its coming out of savings/cashlumpsum for some people- its not a given that its coming out of a mortgage for everyone- simply, its not. Not everyone's situation is comparable- some have savings, some don't- some have access to higher borrowing capacities- others don't.

    I get that, but we are talking about the scenario where it’s on the mortgage. That’s been the point all along.


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    #64
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    awec wrote: »
    I get that, but we are talking about the scenario where it’s on the mortgage. That’s been the point all along.

    That's an assumption you made- without any clarification on whether its the actual scenario (or not). The OP hasn't said anything one way or the other.


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    #65
    whampiri
    Registered Users Posts: 395 ✭✭whampiri


    awec wrote: »
    You are trying to tell us all you would give up on a property you wanted, that you could easily afford, because of 20 quid a month? Because you don't care about the monthly cost, but rather the fact that in 30 years time this absolutely insignificant sum of money, that is a minute fraction of what you are paying, is going to bother you?

    Sorry, but I don't believe this.

    To be fair, and I agree with you about €20 not being a significant amount of money, it may be that it's "another" €20 for someone who is already maxed out or who has maxed out all other sources. It's a slippery slope that agents and sales people use. "It's only another...." Are you really not going to bid again and leave this go for the sake if only...", but it may have only been another €20 four bids ago, going into bid five, you're up to €100. That can put strain on finances.

    My advice is to offer what you actually believe the house is worth based on values around the area or in a comparable location -10% and give yourself some room to maneuver.

    When bids come in over your budget don't bother looking for extra funding because you'll always feel ripped off and remember that as the price of the house goes up, so does the stamp duty payable. Instead if you're able to save, continue to do so as the larger your deposit, the smaller your repayments or the shorter the term of your loan allowing you to get on with life.


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    #66
    mickdw
    Registered Users Posts: 23,353 ✭✭✭✭mickdw


    It's funny that people are arguing that 5k is not significant yet if they were in any other situation 5k would be a serious amount if cash.
    If car broke down and it cost 5k to repair, the story would be told for years to come.
    5k added to mortgage is costing more than 5k.
    I'd have no issue bidding in smaller steps.
    A few phone calls extra when dealing with price increases that might equal a years salary is sensible imo.


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    #67
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Plus- it may only be EUR20 for this 5k increment- but its another EUR40 for the person you're bidding against- and then EUR60 for your counter bid etc etc

    Its very easy to get emotionally involved in the process- and feel that you have a vested interest in continuing to bid- all the while your counter bidder has a similar emotional involvement.

    You might get lucky- and its a single bid that the other person walks away from- or you might end up in a protracted bidding contest against someone else- where it gets prohibitively expensive very very quickly- as your cumulative EUR20 a month- turns into EUR200 (or more) a month over what it might had gone for- had the estate agent not managed to psychologically set you up against someone else who also liked/admired the property.

    The key here- is for the estate agent to develop/work on the psychological attachment you have for the property- all the time trying not to make it entirely obvious what he/she is doing.


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    #68
    grogi
    Registered Users Posts: 8,615 ✭✭✭grogi


    awec wrote: »
    I think these are lazy, generalising statements that make no sense at all.

    Do you really think Irish people are any different to anyone else when it comes to buying things?

    Yes. We are the only country I am aware of that so obviously displays the year of the first registration of the vehicle. Nobody needs to know, bar the neighbour...


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    #69
    airportgirl83
    Registered Users Posts: 149 ✭✭airportgirl83


    The_Conductor wrote: »
    awec wrote: »
    I get that, but we are talking about the scenario where it’s on the mortgage. That’s been the point all along.

    That's an assumption you made- without any clarification on whether its the actual scenario (or not). The OP hasn't said anything one way or the other.

    Mortgage would be average on that house (small for some, enough for me), around €1k or slightly less per month in repayments, large cash deposit.


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    #70
    TheChizler
    Registered Users Posts: 9,455 ✭✭✭TheChizler


    whampiri wrote: »
    When I was bidding I increased the bid to 399k from 395 in the hope that the counter bidder wouldn't want to hit the 400k mark. Plan worked. It's psychological warfare.
    Did it? That's your assumption though unless you know the other bidders. Twice I've lost out on houses that went sale agreed after the other bidder jumped by €10k over my offer. I only stopped increasing my offer because I had reached my limit for what I believed the house was worth, which I was always going to reach as long as someone else was bidding. They might have thought they scared me off but as far as I'm concerned they just gave away €9,999.


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    #71
    airportgirl83
    Registered Users Posts: 149 ✭✭airportgirl83


    Also people seem to focus that it's just €5k, it's more than likely not...it's €10k, €15k, €20k possibly if both sides start bidding in large steps and get carried away. This is why the agent probably brought it up.

    Also, someone bidding in large steps would not scare me off. I know my budget, I know how much I'm willing to pay. I will not be contributing to the bidding madness.


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    #72
    airportgirl83
    Registered Users Posts: 149 ✭✭airportgirl83


    TheChizler wrote: »
    whampiri wrote: »
    When I was bidding I increased the bid to 399k from 395 in the hope that the counter bidder wouldn't want to hit the 400k mark. Plan worked. It's psychological warfare.
    Did it? That's your assumption though unless you know the other bidders. Twice I've lost out on houses that went sale agreed after the other bidder jumped by €10k over my offer. I only stopped increasing my offer because I had reached my limit for what I believed the house was worth, which I was always going to reach as long as someone else was bidding. They might have thought they scared me off but as far as I'm concerned they just gave away €9,999.

    That's an interesting way of looking at it! Must remember that one.


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    #73
    kippy
    Registered Users Posts: 18,583 ✭✭✭✭kippy


    TheChizler wrote: »
    Did it? That's your assumption though unless you know the other bidders. Twice I've lost out on houses that went sale agreed after the other bidder jumped by €10k over my offer. I only stopped increasing my offer because I had reached my limit for what I believed the house was worth, which I was always going to reach as long as someone else was bidding. They might have thought they scared me off but as far as I'm concerned they just gave away €9,999.

    If they had gone another €500 euro instead of 10K would you have stepped away?

    (I agree though, unless you know the circumstances of the other bidder(s) and/or seller, it is impossible to know what "works")


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    #74
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    awec wrote: »
    I think these are lazy, generalising statements that make no sense at all.

    Do you really think Irish people are any different to anyone else when it comes to buying things?

    Yes, I do, we have a culturally different attitude towards buying and owning property than many other European countries for a start.
    Are you suggesting that this isnt the case or even that its not possible? Seriously?


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    #75
    TheChizler
    Registered Users Posts: 9,455 ✭✭✭TheChizler


    kippy wrote: »
    If they had gone another €500 euro instead of 10K would you have stepped away?

    (I agree though, unless you know the circumstances of the other bidder(s) and/or seller, it is impossible to know what "works")
    Well I'm probably exaggerating with the €9999 thing but €9000 maybe. If they had increased by €500 then I'd probably have been borderline on increasing, €1000 probably no. At the end of the day you set your limit to what you can afford and what the property is worth to you, someone else's bid shouldn't have an impact on that limit in my mind, unless you had very good reason to believe that was their final offer.


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    #76
    Jaster Rogue
    Registered Users Posts: 175 ✭✭Jaster Rogue


    mickdw wrote: »
    It's funny that people are arguing that 5k is not significant yet if they were in any other situation 5k would be a serious amount if cash.
    If car broke down and it cost 5k to repair, the story would be told for years to come.
    5k added to mortgage is costing more than 5k.
    I'd have no issue bidding in smaller steps.
    A few phone calls extra when dealing with price increases that might equal a years salary is sensible imo.


    You're comparing apples and oranges there.
    A car is a depreciating asset and will be worthless in 30 years, on the other hand (generally speaking) property increases in line with inflation over the long-term (say a mortgage term of 30 years).

    I know people don't like this narrative, but property is a long-term investment and has proven to be a very lucrative one at that.

    Also no bank is going to give you 5k for car repair over a 30 year term at low fixed interest rates (relative to personal lending).


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    #77
    awec
    Administrators Posts: 53,796 Admin ✭✭✭✭✭awec


    grogi wrote: »
    Yes. We are the only country I am aware of that so obviously displays the year of the first registration of the vehicle. Nobody needs to know, bar the neighbour...

    The age of the vehicle is apparent on UK plates as well. Their system is similar to ours, with years broken down into 6 month periods.


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    #78
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    awec wrote: »
    The age of the vehicle is apparent on UK plates as well.

    Only i you take the time to decipher a code, we have made it as blatant as possible.


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    #79
    awec
    Administrators Posts: 53,796 Admin ✭✭✭✭✭awec


    terrydel wrote: »
    Only i you take the time to decipher a code, we have made it as blatant as possible.

    It's not a code. It's obvious, you look at a reg and it'll take you all of half a second to figure out what 6 month period that car was registered in.

    AB19 = March - August 2019
    AB69 = September 19 to Feb 2020.
    AB20 = March 2020 - August 2020
    AB70 = September 2020 - Feb 2021

    And so on, and so forth. It does not take a genius.

    As I said, it's a lazy generalisation to think Irish people behave differently with their money.


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    #80
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    awec wrote: »
    It's not a code. It's obvious, you look at a reg and it'll take you all of half a second to figure out what 6 month period that car was registered in.

    AB19 = March - August 2019
    AB69 = September 19 to Feb 2020.
    AB20 = March 2020 - August 2020
    AB70 = September 2020 - Feb 2021

    And so on, and so forth. It does not take a genius.

    As I said, it's a lazy generalisation to think Irish people behave differently with their money.

    It is a code. Whether it takes a genius or not, it is a code.
    And its not a lazy generalisation at all, I note you refuse to acknowledge my point re. Irish people having a completely different attitude to the buying and owning of property to for example other European countries. Again, are you suggesting that this is not the case, and that it is not possible for populations in different countries to have different cultural attitudes towards buying houses and thus behave differently when doing so?


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    #81
    awec
    Administrators Posts: 53,796 Admin ✭✭✭✭✭awec


    terrydel wrote: »
    It is a code. Whether it takes a genius or not, it is a code.
    And its not a lazy generalisation at all, I note you refuse to acknowledge my point re. Irish people having a completely different attitude to the buying and owning of property to for example other European countries. Again, are you suggesting that this is not the case, and that it is not possible for populations in different countries to have different cultural attitudes towards buying houses and thus behave differently when doing so?

    In what way? Can you be more specific?


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    #82
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    awec wrote: »
    In what way? Can you be more specific?

    When you get around to answering the qs I've now asked twice, I'll start answering yours.


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    #83
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Guys- no bickering please.


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    #84
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    The_Conductor wrote: »
    Guys- no bickering please.

    Acknowledged, but its not bickering on my behalf, I've simply asked a qs - is the poster suggesting there is no cultural difference in attitudes towards owning/buying property between Irish people and other European countries, and no possibility of this even being possible.

    No answer is forthcoming, but he expects answers to his own qs.
    Admin should be better than that.


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    #85
    Interested Observer
    Registered Users Posts: 13,105 ✭✭✭✭Interested Observer


    terrydel wrote: »
    Acknowledged, but its not bickering on my behalf, I've simply asked a qs - is the poster suggesting there is no cultural difference in attitudes towards owning/buying property between Irish people and other European countries, and no possibility of this even being possible.

    No answer is forthcoming, but he expects answers to his own qs.
    Admin should be better than that.

    You've made the claim these cultural differences exist, it's not up to anyone else to show you're right or wrong. I'm also interested to know what the differences are.


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    #86
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    Interested Observer wrote: »
    You've made the claim these cultural differences exist, it's not up to anyone else to show you're right or wrong. I'm also interested to know what the differences are.


    The other poster has implied that there are no differences culturally in attitudes to owning/buying property between Ireland and other countries, in essence saying that every country treats this issue exactly the same.
    I've simply asked him to clarify his stance on the issue and he refuses to do so.
    There is a far higher number of people renting in many European countries, personal experience of living in Berlin shows that people are not nearly as obsessed with home ownership, it is not discussed to anywhere near the same extent, and people there are far happier to rent than here, they do not place the same importance on property ownership, my girlfriend is Portuguese and they also are not nearly as obsessed with the idea of buying and are much more open to renting for the long term. These are cultural differences in attitudes.
    Are you saying these differences don't/can't exist?


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    #87
    Interested Observer
    Registered Users Posts: 13,105 ✭✭✭✭Interested Observer


    Portugal has a higher home ownership rate than Ireland does, and we're pretty much bang on EU average for our home ownership rates.

    https://tradingeconomics.com/country-list/home-ownership-rate?continent=europe

    Our rental and buyers markets are dysfunctional at the moment so it generates a lot of discussion. I'm not sure that's the same as a cultural difference, or an Irish obsession with owning a home.


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    #88
    Mad_maxx
    Registered Users Posts: 13,503 ✭✭✭✭Mad_maxx


    terrydel wrote: »
    The other poster has implied that there are no differences culturally in attitudes to owning/buying property between Ireland and other countries, in essence saying that every country treats this issue exactly the same.
    I've simply asked him to clarify his stance on the issue and he refuses to do so.
    There is a far higher number of people renting in many European countries, personal experience of living in Berlin shows that people are not nearly as obsessed with home ownership, it is not discussed to anywhere near the same extent, and people there are far happier to rent than here, they do not place the same importance on property ownership, my girlfriend is Portuguese and they also are not nearly as obsessed with the idea of buying and are much more open to renting for the long term. These are cultural differences in attitudes.
    Are you saying these differences don't/can't exist?

    Germany is not typical, it's less so than we are


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    #89
    Mad_maxx
    Registered Users Posts: 13,503 ✭✭✭✭Mad_maxx


    The one thing which is undoubtedly culturally unique here is the attitude towards evictions, nowhere else is it seen as unreasonable to evict a mortgage defaulter.

    No wonder European banks want nothing to do with this market, despite the high apparent returns


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    #90
    terrydel
    Closed Accounts Posts: 3,881 ✭✭✭terrydel


    Interested Observer wrote: »
    Portugal has a higher home ownership rate than Ireland does, and we're pretty much bang on EU average for our home ownership rates.

    https://tradingeconomics.com/country-list/home-ownership-rate?continent=europe

    Our rental and buyers markets are dysfunctional at the moment so it generates a lot of discussion. I'm not sure that's the same as a cultural difference, or an Irish obsession with owning a home.

    It has generated a lot of discussion for as long as I've been alive, not just recently.
    My own experience is this simply isnt the case in some other countries. My girlfriend is staggered by our attitudes to owning homes. There can be many historical reasons why Portugal has higher levels of home ownership than we do, but imho based on experience, it is just one country were the attitude and culture differs hugely on this subject. The idea of long term renting is much more acceptable there and elsewhere. Personal experience of Germany also points the same way.

    An Irish obsession with owning a home is a cultural difference. This obsession with home ownership does not exist to the same extent in many other places. All I'm saying is this in part drives our housing market to be in the mess it is. It is part of the Irish culture that does not exist to the same degree in other countries.

    Do you not think that cultural attitudes towards property ownership can differ from country to country? Yes or no?


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    #91
    Jaster Rogue
    Registered Users Posts: 175 ✭✭Jaster Rogue


    I think the obsession with home ownership in Ireland is out of necessity rather than cultural.
    How is a 70 year old retired with the State pension as their only income supposed to afford current Dublin rent levels, or have the physical/mental ability to move their life belongings around every couple of years when the LL decides to turf them out and sell up?
    I Think it's a blessing the majority of pensioners in Ireland own their properties, and hopefully the trend continues when young people today reach retirement age as there's a pension time-bomb coming in a few decades when the 'old age support ratio' of people in employment vs retired is expected to reduce dramatically with declining birth rates and longer lifespans.


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