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

Mad_maxx

Jaster Rogue wrote: »

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.

Not sure I follow, this state is far more generous to the elderly than most European countries, how is retirement any more precarious here?

The_Conductor

Mad_maxx wrote: »

Not sure I follow, this state is far more generous to the elderly than most European countries, how is retirement any more precarious here?

Its precarious- because we quite simply cannot afford to continue to support our future pensioners in the manner in which current pensioners consider to be normal. We currently have 5.8 workers for every retired pensioner in Ireland. By 2050- a tad over 30 years time- this will have fallen to 2 workers per pensioner.

In addition- our social fund into which we shepherd PRSI and social payments- is depleting rapidly- and will be bare by 2026.

In short- taxes will have to markedly increase within 10 years- and within 30 years- we very probably won't have a state pension at all- people will be expected to provide for themselves throughout their working life and into retirement.

Its going to be harsh- its going to be brutal- and its the white elephant in the corner of the room that no-one wants to talk about...........

When we have vanity projects- such as 7 billion for rural broadband (that they have no idea how many people will actually pay to use- a survey today says most rural politicians are selling it as 'free' for rural people- not that they will have to pay for broadband in a similar manner to urban dwellers- typically 50-70Euro a month), 2.5 billion for a children's hospital located where no-one can use it- and a plethora of other wholly unjustifiable expenditures happening (I see one Garda managed to get 76k in *overtime* payments last year)- you rapidly see- the politicians are spending money hand over fist- safe in the knowledge that when the birds come home to roost- someone else will be in power- it will be someone else's problem...........

This booting the issue into the long grass- is not just an Irish trait- its part of the human frailty- we don't like dealing with today that which we can boot down the road to tomorrow.........

We need to plan for a very near future where we have 3 times more retirees than we have today (by 2029 on current trends)- and where our dependency ratio shrivels from 5:1 to 2:1 (by 2050). These are political poison though- however, sometimes we have to deal our poison to get out the other side.

This is something incredibly precarious- and its something we are ignoring........

the_syco

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...

Currently, yes. Before 1987, it was a mishmash of numbers and letters.

terrydel wrote: »

Irish people having a completely different attitude to the buying and owning of property to for example other European countries.

Europeans have a different culture of renting. Do they get a house pre-filled with furniture, and told not to change anything?

Wheeliebin30

The_Conductor wrote: »

Its precarious- because we quite simply cannot afford to continue to support our future pensioners in the manner in which current pensioners consider to be normal. We currently have 5.8 workers for every retired pensioner in Ireland. By 2050- a tad over 30 years time- this will have fallen to 2 workers per pensioner.

In addition- our social fund into which we shepherd PRSI and social payments- is depleting rapidly- and will be bare by 2026.

In short- taxes will have to markedly increase within 10 years- and within 30 years- we very probably won't have a state pension at all- people will be expected to provide for themselves throughout their working life and into retirement.

Its going to be harsh- its going to be brutal- and its the white elephant in the corner of the room that no-one wants to talk about...........

When we have vanity projects- such as 7 billion for rural broadband (that they have no idea how many people will actually pay to use- a survey today says most rural politicians are selling it as 'free' for rural people- not that they will have to pay for broadband in a similar manner to urban dwellers- typically 50-70Euro a month), 2.5 billion for a children's hospital located where no-one can use it- and a plethora of other wholly unjustifiable expenditures happening (I see one Garda managed to get 76k in *overtime* payments last year)- you rapidly see- the politicians are spending money hand over fist- safe in the knowledge that when the birds come home to roost- someone else will be in power- it will be someone else's problem...........

This booting the issue into the long grass- is not just an Irish trait- its part of the human frailty- we don't like dealing with today that which we can boot down the road to tomorrow.........

We need to plan for a very near future where we have 3 times more retirees than we have today (by 2029 on current trends)- and where our dependency ratio shrivels from 5:1 to 2:1 (by 2050). These are political poison though- however, sometimes we have to deal our poison to get out the other side.

This is something incredibly precarious- and its something we are ignoring........

7 billion for rural broadband??

Link???!

The_Conductor

Wheeliebin30 wrote: »

7 billion for rural broadband??

Link???!

IT- its firewalled though.
Essentially- costs have crept to between 5-6 billion (ex VAT) and are expected to rise further.
It all came out in the Oireachtas Committee this week.

Essentially they are prepping us for even more than 7 billion, while simultaneously advising that they cannot possibly advise what capital investment McCourt is putting into the project- as its commercially sensitive (despite everyone else falling out of the process when they gifted Eircom the 300,000 easy to connect customers).

We already have a State Body rolling out broadband nationally (the ESB)- why can't they be told that they are to use their infrastructure to supply the broadband rurally- seeing as they already supply the electricity?

So- yes, its approx 7 billion (incl. of VAT) but subject to increase, as they really haven't a clue how much it'll cost- meanwhile the only cost that is capped- is McCourt's contribution- apparently.

whampiri

It's estimated at 3billion.

The_Conductor

whampiri wrote: »

It's estimated at 3billion.

Not according to the Oireachtas subcommittee.
Also- all the sums leaked by FG to the media- are ex. VAT prices- to keep them artificially low.

Here is one IT link quoting over 5 billion for the price (from yesterday): https://www.irishtimes.com/news/politics/broadband-cost-set-to-top-5bn-including-private-investment-1.3885560

The_Conductor

Also keep in mind the public were told that selling the National Lottery was to pay in full for the new Children's Hospital- and the achieved price for the lottery (some 400 million) had contingencies built in- so there would be no cost from the capital budget towards the children's hospital.......... Now we're at a price tag of 2 billion- and rising.............

kippy

The_Conductor wrote: »

Also keep in mind the public were told that selling the National Lottery was to pay in full for the new Children's Hospital- and the achieved price for the lottery (some 400 million) had contingencies built in- so there would be no cost from the capital budget towards the children's hospital.......... Now we're at a price tag of 2 billion- and rising.............

An absolute disgrace on every level - we are being told on one hand that we will have a pensions crisis down the line yet we are selling off these assets to foreign pension funds......

Anyway - off topic here - but deserves its own thread.

IAmTheReign

Sheeps wrote: »

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

But surely you've just shown that your strategy doesn't work? You've bid on 3 properties and failed to secure them for a price your happy with, all you've done is make the bidding process take longer for whoever eventually ended up buying the property.

Bigmac1euro

IAmTheReign wrote: »

But surely you've just shown that your strategy doesn't work? You've bid on 3 properties and failed to secure them for a price your happy with, all you've done is make the bidding process take longer for whoever eventually ended up buying the property.

He was still in with a chance of sealing the deal though.

IAmTheReign

Bigmac1euro wrote: »

He was still in with a chance of sealing the deal though.

And every time I buy a lotto ticket I'm in with a chance to be a millionaire. My point is he's not being realistic. He's bidding on properties that clearly other people are interested in so why expect to get them for less than market value? You'll be a long time waiting for a house if you're bidding 20% under asking price.

Bigmac1euro

IAmTheReign wrote: »

And every time I buy a lotto ticket I'm in with a chance to be a millionaire. My point is he's not being realistic. He's bidding on properties that clearly other people are interested in so why expect to get them for less than market value? You'll be a long time waiting for a house if you're bidding 20% under asking price.

Well done, you compared apples with oranges.

awec

awec wrote: »

No, but it means someone will end up winning the bidding faster.

I mean, if it were me, I'd have the max I'm willing to pay, and go up in bigger increments to start with and then slow down as I approach my max. I would see this as a good compromise between getting a price I'm happy with versus not taking forever on bidding.

And as a competitor bidder I would sense that you are nearing your max and increase at the same rate, comfortable that I can now outbid you
Vs if you were ALWAYS going up in low incremental bids where I would not have a clue what your budget is

IAmTheReign

Bigmac1euro wrote: »

Well done, you compared apples with oranges.

Once again you missed my point. If you're serious about a particular property you don't rely on chance. Of course there's always a chance that he'll have a bid accepted but it's extremely unlikely, as evidenced by the fact that his strategy hasn't worked.

JeffKenna

Sheeps wrote: »

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

Come back to us when that strategy is actually successful.

airportgirl83

JeffKenna wrote: »

Sheeps wrote: »

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

Come back to us when that strategy is actually successful.

That's actually a very rude comment and I'm surprised the Moderator is not picking it up. Everyone's experience is different and this is a thread to share various opinions and ideas in a civilised way.

JeffKenna

airportgirl83 wrote: »

That's actually a very rude comment and I'm surprised the Moderator is not picking it up. Everyone's experience is different and this is a thread to share various opinions and ideas in a civilised way.

You might be better off leaving the modding to the moderators. If you feel a post is uncivil then report it, no need to drag the thread off topic.

In any case, I don't see it as rude at all. The poster posted their 'strategy' with a track record of losing out on every house they bid on.

airportgirl83

JeffKenna wrote: »

airportgirl83 wrote: »

That's actually a very rude comment and I'm surprised the Moderator is not picking it up. Everyone's experience is different and this is a thread to share various opinions and ideas in a civilised way.

You might be better off leaving the modding to the moderators. If you feel a post is uncivil then report it, no need to drag the thread off topic.

In any case, I don't see it as rude at all. The poster posted their 'strategy' with a track record of losing out on every house they bid on.

Yes you are rude and you are a bully. I will report it. This is my thread that you are driving off the topic. Unless you have an interesting point to make GTFOH

JeffKenna

airportgirl83 wrote: »

Yes you are rude and you are a bully. I will report it. This is my thread that you are driving off the topic. Unless you have an interesting point to make GTFOH

Stones and glass houses come to mind.

Gumbo

Sheeps wrote: »

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

airportgirl83 wrote: »

Yes you are rude and you are a bully. I will report it. This is my thread that you are driving off the topic. Unless you have an interesting point to make GTFOH

JeffKenna wrote: »

Stones and glass houses come to mind.

Mod Note

Guys, stop it now.
No more digs at each other.

Bigmac1euro

So people, genuine question.
What is the best bidding method ? Whats the most effective way of bidding ?

TheChizler

Bigmac1euro wrote: »

So people, genuine question.
What is the best bidding method ? Whats the most effective way of bidding ?

Offer the most money :pac:

Genuinely I believe that's the only thing you can know for sure. Everyone else is going to only go as far as their limit, so offer smallish increments so you don't overshoot their limit and unnecessarily spend.

JeffKenna

TheChizler wrote: »

Offer the most money :pac:

Genuinely I believe that's the only thing you can know for sure. Everyone else is going to only go as far as their limit, so offer smallish increments so you don't overshoot their limit and unnecessarily spend.

That's a very big assumption though that everyone bidding has a set limit and will stick to it. Bidding smaller amounts leaves more room for the bidders that don't to keep bidding the price up as it's *only* 2k each time.

You also have to factor in the risk that the slower one bids the more time it takes, giving more time for other potential bidders to enter.

Balanadan

awec wrote: »

It's 5k over the course of 25/30 years.

Have you calculated the difference the mortgage payment would be on paying 455 vs paying 460? It must be like 20 quid a month or something? Less than 1% increase on your monthly payment.

Like if I was willing to go 30k over, I'd probably bid first 5k. Absolute worst case, I have overpaid by 4k, which is absolutely feck all when I'm already paying 460,000. If the counter bid comes back at 465,000, then I'll go 470,000, again worst case is 4k overpaid. I'd slow down when I come nearer to my limit, maybe reduce to 3k, then 2k, then 1k.

If you are so uptight about getting the absolute minimum possible you will drive yourself insane. There will always be someone who got a bit of a better deal than you. Pay a price you're happy to pay and move on with your life.

Some people are miserable. If I was bidding against someone who just limped €1k at a time, I'd jump it €5k until they were out of the picture.

the_syco

Bigmac1euro wrote: »

So people, genuine question.
What is the best bidding method ? Whats the most effective way of bidding ?

IMO, if the current price is 50k less than your max and you really want the house, up the bid by 20-25k. The shock may turn off the other bidder. Smaller increments may mean you'll arrive at 25k a few weeks down the road, with both of you still biding for the house.

Graham

Bigmac1euro wrote: »

So people, genuine question.
What is the best bidding method ?

There isn't one.

What works for one is just as likely not to work for another. Each scenario/buyer/seller/agent have their own expectations, methods, prejudices, opinions, personalities, timelines, priorities.

Some strategies may see you paying more in some scenarios, less in others. Some might frighten off other bidders, others will come back strong.

Rew

the_syco wrote: »

IMO, if the current price is 50k less than your max and you really want the house, up the bid by 20-25k. The shock may turn off the other bidder. Smaller increments may mean you'll arrive at 25k a few weeks down the road, with both of you still biding for the house.

We did this and got the place 50k under what it had previous SA for (and fallen through). We made 2 bids and the other bidders lost their stomach for it.

If the current bit is 450 and you bid 15k they are going to have to come up at least 16k or more which usually requires thinking about more then coming up 1-5k.

Neighbours have their place up for 200k more then our sale price so cant wait to see how that pans out.

Bigmac1euro

Balanadan wrote: »

Some people are miserable. If I was bidding against someone who just limped €1k at a time, I'd jump it €5k until they were out of the picture.

Haha! But it totally depends on someone’s circumstances now maybe that’s your way of doing things, I really don’t see how it makes someone miserable though. Again, a classic example of one of the many reasons houses are costing so much. A fool and his money and all that!

TheChizler

JeffKenna wrote: »

That's a very big assumption though that everyone bidding has a set limit and will stick to it. Bidding smaller amounts leaves more room for the bidders that don't to keep bidding the price up as it's *only* 2k each time.

You also have to factor in the risk that the slower one bids the more time it takes, giving more time for other potential bidders to enter.

The alternative is that you're essentially betting that the other person is undisciplined, hasn't valued the house seriously themselves, puts more stock into the increase on the previous bid rather than the total, and is bidding emotionally. Not someone I want to be taking risks against. Either way they'll either come up against a self imposed limit, or they run out of cash.

Fair point about other bidders coming in, but the other side of it is that a slow bid gives everyone a chance to calm down and reassess, instead of bidding frantically trying to beat the last person.