How much should second bid be?

So, I've been reading a ton on the key posts and made my first bid yesterday. I used random numbers, didn't dick around and offer was rejected today. Now, I have no clue where to start for second bid.

The house is asking €160k, and just had a sale fall through at€140k according to the EA. The house been on the market for five years and needs a lot of work (two separate homes), so I put in a bid of €118k chancing my arm. I expected some feedback from the EA but there was none. Got the call this morning that the offer was turned down as the owners are looking for something higher.

I'm not sure if I should do the recommended 1k increments, go closer to €120k or €130k or even closer to the 140. Help!

How much are you willing to pay for it? You need to set your upper limit & go no further than that - how you get from €118K to "amount you are willing to pay", is really up to you.

I wouldn't take too much notice of the 140K figure from the EA - Did the EA detail "why" it fell through at that price?

You mentioned, "needs a lot of work" - have you an understanding of the costs involved to get it habitable? Time / effort involved in getting that work done.

Have any other properties in the area up for sale / or sold recently, so as to gauge prices?

It's a case of what it's worth to you and how upset you will be if someone else buys it. 1K increments sound like clowning to me, if they'd take 119 they would have taken 118. On the market for five years, needs work, could be a money pit. If you really want a particular house you should chase it aggressively but i suppose if you're not fussy then you'll probably get some house for a steal with a low-ball offer and a couple of glacial increments.

The estate agent said the buyers house sale fell through, so that crushed this deal. It needs a lot of work mostly because it is two apartments at the moment and needs to be made into one home, as well as it is an old home, but a survey should show any major issues. Still trying to figure out if I need planning permission to knock the wall. :-/

Maybe the other offer fell through because the people underestimated the work needed. But EA didn't want to put you off.
Do you really know how much work is involved.
Get a builder in to give you a figure. Better still get 3 separate builders in to give you 3 figures but that could take around 2 weeks to arrange.
It'd be worth drawing up a spreadsheet listing all the work that needs doing.
Write the floor area sizes etc so you can estimate cost of materials.
Bathrooms get size of walls needing tiling so you can estimate cost of tiles.
Just as much concrete info as you can, so you are not dealing with just a lovely warm fuzzy thought of how it might look with no notion of the price tag.

With Sadie on this.
What about recontacting estate agent. Tell him you are still interested but for you to relook at your bid you want a couple of builders to give you an estimate on work you would do on it.
In that way you have control over the process, I would be afraid that if work is needed you could be looking at a lemon!

akl said:

The estate agent said the buyers house sale fell through,

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Ignore what the EA tells you, he's not going to tell you the truth. Five years on the market. Where did you come up with 118K. Chancing your arm, in relation to 160K asking is it? That depends. More figures please. How much to refurbish, how much will it be worth then, how much are current houses in teh area selling for etc. Your 118K might be over the odds.

Decided to place a second bid of 126 yesterday, and that was rejected as well. EA says the sellers are not budging to go under 140, which would be our absolute walk away point. But I really don't want to go there.

In relation to the work, I had a builder walk through with me, but he wouldn't give me any break down of costs, just "I'd say you'd be able to do all of that for about 30-40k." Also, when I was asking about things, he didn't have the confidence of someone with that experience, more of the "Ah yeah, I'd give it a go." attitude. Anyway, I then met with another builder and showed him pictures, and mock floor plans and he gave a tentative quote of close to 15k. However, we really just plan to knock the wall first (about 3k with labour and steel) then live in the house for a year before making bigger changes. I do plan on having proper quotes, after the ok from a structural survey.

A similar house with a tiny (1/4 of the size of the one we are looking at) garden went on the market for 85k. There is very little stock and nothing outside of an estate on the market south of 175, however, those are all walk in ready and free of possible planning issues.

And yes, the 118 was a low ball offer.

The sellers won't budge under €140k and the house has been on the market for 5 years?!! Doesn't that tell you something. Of course the estate agent will tell you of the one fool who was gullible enough to pay the asking price. What about all the other offers that we rejected?

When a house is in disrepair, the price should reflect that. Doing it up should then add value to the property. From what you have told us, if you spend money on it, it will only bring it up to the value other houses for sale in the area that are already in good condition. It's a lot of time and hassle in doing up a house. No point in doing it if there is no added value for you in it.

Walk away.

Steven
www.bluewaterfp.ie

SBarrett said:

The sellers won't budge under €140k and the house has been on the market for 5 years?!! Doesn't that tell you something. Of course the estate agent will tell you of the one fool who was gullible enough to pay the asking price.

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The asking price is 160k, so 20k less. The house is liveable, there is a family in one side, it's just not as pretty as the other options. (the original house looks like no one updated it since 1950. ) There is no comparable option because there are only about 8 or 9 nine houses like it on the street. And I just went to recheck daft, and I was wrong, there is nothing under €225 outside of an estate. And the estates within our budget have small gardens and are overlooked.

Pros of this house: Very large garden back and front, excellent location, mature area, private...
Cons: north facing garden, house needs renovation and connection, possible planning issues,

Just playing devil's advocate. Still on fence, but leaning on going to 140. Not sure if I should try 130 or 135 first instead.

akl said:

The asking price is 160k, so 20k less

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They can ask as much as they want. It's the market that decides on the value of the house, not the asking price the owners put on it. The fact that they haven't been able to sell the house in 5 years is a pretty strong indication that the house is overvalued.

Steven
www.bluewaterfp.ie

akl said:

Just playing devil's advocate. Still on fence, but leaning on going to 140. Not sure if I should try 130 or 135 first instead.

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Methinks there's no point jumping from 126 to 140. If I was still interested I'd offer low 130s and tell the EA I was to the pin of my collar at that.

Just a quick update. Offered 132 as our final offer, was rejected again. EA said the sellers were hoping to get a price closer to 140, and maybe they would take 135 if we were willing to go up to that. At this point, not sure if I should just call him up tomorrow and say yeah 135 or wait. leaning to just calling tomorrow and doing just that, but there is no guarantee that they will accept. I'm clearly not cut out for this.

No idea Akl why you are looking for advice when you are dogged in your pursuit of bidding against yourself. !

We await you confirming the EA has you at 140K !

Do you know what 'final offer' means ?

140 Asking
First bid 118
Second 126
Final 132
The proposed unfinal 135

And no other bidders. And on the market for 5 years.

Of course if you really really want it and you think it's worth 135 you should go for it. Did you do a structural survey? Do you know why the 'supposed' sale fell through?

Thanks, I needed that. I realised that they were saying jump and we were eagerly saying how high. This is the first time we've done this and are learning as we go. Anyway, I called EA this morning and told him that we were going to leave it there and continue our search, call us if anything similar comes up or they change their minds.

Bronte said:

Did you do a structural survey? Do you know why the 'supposed' sale fell through?

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No, I didn't get the survey done yet. Didn't see the point of paying €200 towards a house that we hadn't gone sale agreed on. EA says that seller own house sale fell through.