Bidding Advice Please?

Zebrano

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Afternoon everyone,

Looking for a bit of bidding advice. We have found a house that has ticked all our boxes and we really like it. It’s in Meath, so things are slightly different to Dublin at the moment, but it is a little more expensive than other houses in the area due to its good condition. We offered a bid of 8% under asking price, which has been refused. This is the second bid that we have made, the previous bid being 10% under asking price. Estate Agent told us when turning down the first bid that the vendors want full asking (or close to asking). I asked EA to define ‘close to asking’ and he just said ‘the full asking’. When the second bid was refused, I got a similar line, vendors want ‘full asking or over’. The house has been on the market for 9-10 months, and has not reduced/increased since.

I am a bit confused as to what to do next in terms of our next bid, we can afford to bid a little more, and are prepared to walk away when we hit that mark. Would anyone have any advice to give us? Should we hold out? How do we encourage the vendors to actually negotiate, even a little?
I am worried now that even if we bid the full asking price that the vendors would refuse the bid in the hope of getting even more out of us (or someone else), and I think -8% to full asking is a huge jump!

All opinions very much welcomed.
 
What is the house worth to you and what is your budget? It's up to you to balance these often conflicting financial forces to your satisfaction.

If you feel the EA is messing you around, put your final offer in writing to the EA and the vendor if necessary. Make sure the offer is subject to survey, compliance with building regs and planning conditions and mortgage approval, if you need a mortgage. If you don't need a mortgage stress this as a plus point in your favour. Don't be afraid to put a time-limit on your offer -" offer is valid for 10 days from above date after which it expires" or some such wording.
 
Hi mathepac

Thank you so much for your response, it has helped me focus. It is just frustrating because it appears that the vendor is unwilling to negotiate at all - but may do so if I bid again? But it is their house, and if they do not want to negotiate it is completely their call.

Would it be out of line to contact the vendor directly? Leave a note in their door? I doubt the EA would like that!

I really appreciate the advice, and will have a think about what you have said.

Thanks :)
 
Would it be out of line to contact the vendor directly?
I would have thought so. If it were me, and it was the right house, I would make a final time-limited offer up to what I could afford or the asking price (whichever was lower). I wouldn't get hung up on the notion that I had to get a certain discount on asking price.
 
Sellers, and their auctioneers, have different strategies.

Some set the asking price above what they expect and hope bidders will rise towards it.

Others set the asking price below what they expect, to create a lot of interest in it.

It seems that your sellers have set the price they want for the house as the asking price.

You can't afford the asking price, so you should probably tell the auctioneer that now and walk away. If they are messing, then he might come back to you.

If you bid your absolute limit e.g. 6% below the asking price, they will come back looking for more. So there is little point in it.

Brendan
 
Sometimes the asking price is the price. In my own case 13 yrs ago the seller had a price fixed. I offered 2% lower, then 1% but was not accepted so finally submitted the asking price which was accepted with no strategy on the seller's part of looking for in excess of AP.

I could have afforded a similar house, which was asking 12000 more, but which was affordable to me only at 6000 more. I bid at that level but was rejected as seller was definitely holding for the higher price. I could not afford to pay any higher so left it be. 5 months later the house sold at my bidding offer but in the meantime I was busy revamping my own "new" home.!

I would say, if you really want this house, submit your most affordable bid, and if it is not accepted, look elsewhere. The seller may have their fixed price because of their own circumstances and cannot afford to sell for less? Or, like a friend of mine, is not in a particular hurry to sell.
 
You can't afford the asking price, so you should probably tell the auctioneer that now and walk away.
It reads to me like they can afford to pay asking. If so then it comes down to whether the house would be worth the asking price to Zebrano.
 
Thanks for all the replies. Yes it appears as though the sellers are holding out for asking and are unprepared to accept any lower. EA has said they are not in a hurry to sell, and so are prepared to wait for full asking, but given that I dont trust anything an EA tells me, its hard to believe this or not. I just hope the sellers don't reject asking and then look for more. I will most definitely be walking away at that point.

Thanks again, good to learn from other peoples experiences :)
 
I don't see anything underhand about the EA in this story. OP should now bid the asking, or bid what she can afford it if it under the asking, and tell the Estate Agent it is your final bid as you have no more money.
 
I don't see anything underhand about the EA in this story. OP should now bid the asking, or bid what she can afford it if it under the asking, and tell the Estate Agent it is your final bid as you have no more money.
+1
My current house was bought on bidding the asking price, having being told 11 times by the EA that there would be no reduction.
Prior to buying my first house I sought advice from my house mates who were much more experienced than me in this game: they said you never offer the asking: It was an executor sale: asking 40k, I offered 38k with the understanding that he would come back to me if he got a better offer.

I called him in a week to be told that the person behind me offered the asking and he did the deal there and then.
Moral of the above, if you want it and then bid what you can afford.
If you, like many folk, have an aversion to ever paying the asking, then you must be prepared to live with the outcomes of such an approach.
 
Lots of good advice for you Zebrano from other posters. It's all linear, and very logical. If you wanted to try something creative you could:
1. Understand that prices are based on expectation levels and informed by knowledge of the market
2.Attempt to influence expectations by:
i) letting the EA know you've spotted another house and are withdrawing your bid as the other house is in your budget range (you can always re-instate it later if the "other house" falls through). Emphasise that you are disappointed that you couldn't do business but be upbeat about the other house
ii)get a new bidder to show an interest in the house from which you have withdrawn. They could bid 5% less than your bid.
iii) if they can find a potential problem with the house then all the better.
The idea would be that they withdraw eventually and the EA contacts you. It takes a little finesse and some teamwork, but it's a nice strategem, though not necessarily one I would recommend.

A little after-note:
I don't expect these suggestions to meet with wide-scale "approval". However, that does not detract from the fact that they have value, at the least in an academic sense as an aspect of a certain form of negotiation. The kernel of the issue is that price levels reflect buyer-seller dynamics and that expectations are an element of those dynamics. Therefore, negotiations will seek to influence expectations - after all your own expectation has been set by the EA's statement on what the seller will accept. How we think, and what we feel influence the decisions we make. So, just something that may give another perspective.
I have removed the word "however" from the beginning of the sentence "It's all linear..." as it may have been construed as negative. Instead, the intention was to convey a positive disposition for the previous advice you had received and to offer something a little more left of field.
 
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Lots of good advice for you Zebrano from other posters. However, it's all linear, and very logical. If you wanted to try something creative you could:
1. Understand that prices are based on expectation levels and informed by knowledge of the market
2.Attempt to influence expectations by:
i) letting the EA know you've spotted another house and are withdrawing your bid as the other house is in your budget range (you can always re-instate it later if the "other house" falls through). Emphasise that you are disappointed that you couldn't do business but be upbeat about the other house
ii)get a new bidder to show an interest in the house from which you have withdrawn. They could bid 5% less than your bid.
iii) if they can find a potential problem with the house then all the better.
The idea would be that they withdraw eventually and the EA contacts you. It takes a little finesse and some teamwork, but it's a nice strategem, though not necessarily one I would recommend.

Orga, Other posters and my own are "good advice" but" linear and logical" which probably equates to boring when set against your" Creativity".

Wasn't this type of creativity "though not necessarily one I would recommend" partly to blame for bloating of house prices in the past. If one wants to be creative, write a drama, a book or a poem, compose music, arrange flowers but don't include mind games as a creative pursuit.
 
Thanks for all the opinions - much appreciated. To update you, we bid again still under offer, and it was rejected again. We have organised a further viewing to help us decide our next steps.
 
Look at the house again & if it still ticks all your boxes & you still love it offer your best price. Can you afford the asking price?
I live in Meath & in my area everything is selling for the asking price or more at the moment. I know because I am looking myself. If this house has been on the market as long as you say then it's clear the owners want the asking price.
 
The basic fundamentals of negotiation say that you should never bid twice in a row without getting some concession from the counter party. The fact
that you have now bid three times in a row has weakened your position substantially. Every time the seller says "No" to you, you reward him by bidding higher. So the more times he says "No" the richer he gets.

So basically if you bid X you shouldn't bid again until the counter party makes a counter offer or offers some other concession. Its ok to keep the dialogue open but lashing in offers one after the other is never advisable
 
The basic fundamentals of negotiation say that you should never bid twice in a row without getting some concession from the counter party. The fact
that you have now bid three times in a row has weakened your position substantially. Every time the seller says "No" to you, you reward him by bidding higher. So the more times he says "No" the richer he gets.

So basically if you bid X you shouldn't bid again until the counter party makes a counter offer or offers some other concession. Its ok to keep the dialogue open but lashing in offers one after the other is never advisable

Eh??? That's fine if the seller wants to negotiate or is playing games. Believe it or not some people put their house on the market at a price and they won't accept anything below that. I did that and I was perfectly clear from the onset to the estate agent not to bother me with bids below that level as it was the minimum I could accept to pay off mortgage etc. I was in no rush to sell. The seller is not getting richer by saying no. He is just saying he is not willing to negotiate. If the buyer doesn't want to meet the price, he should just walk away.
 
Sunny :I agree with this. Sellers do set a price and will not negotiate. As I said in a previous post this is what happened when I bought my home.

When I sell it I will fix a price below which i will not go ie could not sell for less than I paid more than 13 yrs ago. It was not a daft "celtic tiger" price.

Perhaps the seller in this thread is in similar situation.

If the OP wants this house, bid the asking price at this stage. If it is accepted they will have a house they seemingly want. If not accepted look elsewhere.
 
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