Bidding on a house advice

J

jameshayes

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Long time lurker, first time poster - looking for advice....

My other half and I have been approved for a mortgage for a property to the value of 285K, we specifically requested (and were granted) approval for a particular house that was advertised at this price.

Of course, we did not offer the estate agent the asking price, but offered 265 on the back of someone elses bid of 260. The people offering 260 withdrew and we were the only party left. The seller rejected our offer of 265 and said they would hold out for a bid of at least 280. I countered this with a bid of 268.5 and asked if they were negotiable. They again, rejected and said they will hold out and are prepared to do so for a few months to see what they can get.

We have always led the EA to believe we dont have anymore than 265 and we had to borrow for the 268.5 - he is fed up with the situation, he wants the house sold. Some people might think that this is the EA playing us but I honestly dont think so, he really wants it off his books.

Any advice? I'm afraid if I do offer the 275 they will still reject it. We really want the house, and can afford up to the original asking price of 285, the house is in a great location and there is great value to be had, even at the original sale price.

What do you guys think?
 
I think if you really want the house & they've indicated they'll accept €280 you will really get them thinking at €275 & they may meet you half way. I think most who are selling these days are in negativity equity & can't sell for much lower than asking price anyway!
 
They will sit tight, so you just need to do the same, tell the EA that you have no choice but to look elsewhere because you are already stretched etc etc.
There are three people involved at the other side and the EA needs to work on that angle, as in they are risking losing 90k each for the sake of an extra 4k each.
Your stance woulld also take into account how long it is on the market.
 
Thanks for the replies..

The hosue is on the market over a year now, started out at 385K. My offer was the second offer received on the house since it was advertised
 
jameshayes said:
. My offer was the second offer received on the house since it was advertised
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You absolutely do not know this. Estate agents only interest in you is to get the house sold do not be put under any pressure including pressure from yourself. There are plenty of houses out there.

I agree with MrMan's advice to sit tight.

Could you give an idea of what rental income that property might achieve and it's general location and size.
 
Useless on sizes, is it a semi, detached, 3 bed? and general location, eg Dublin suburbs, within 2km of Dublin city center, remote country Leitrim etc
 
If it were me I'd probably make a time limited 270k final offer which might focus their minds, that's only 5% below asking (I sold my own house 7% below asking) and you may well be their only potential purchaser. However if this was my dream house then I'd probably just offer the 280k on the basis of a quick closure.
 
I would sit tight if I were you- what is your hurry? Remember you are the one in the driving seat- you have mortgage approval.
What have the sellers got?- a house that has been on the market for a year.
The fact that it is executive sale and 3 separate people have to get their share of the proceeds would lead me to doubt that they would consider renting it out- it is too messy- which one of them does all the work? who is called if there are issues with tenants or things to be fixed? does this person get paid more? We had similar situation in our family and renting was just not an option- also probable that at least one person of the 3 wants the cash asap.

From personal experience, just forget totally what they put house on market for initially. The market has been going down steadily and buyers are thin on the ground.
Offer them the timelimited 270 as your final offer as michaelm suggests . They will be taking a chance refusing you- they don't know how long before they will get another offer- the market may drop further and they may be forced to wait a long period and still accept a lower sum.

Add to this, if it is executor sale, chances are the house is unoccupied-this usually means the house is uninsurable and most people are not comfortable with holding onto unoccupied house for long period.

Play hardball and let them know you are prepared to walk away. If EA senses you really want the house, he may be advising that they hold out for you to offer the asking price....best of luck- remember be on your own side- the EA is not on your side.
 
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As per economics house price is max 15 times p.a. Rent which makes it worth 200k approx. That's the reason no one is in hurry to buy its 2 bed house and 2 pay asking for it is just madness. What's d hurry if u can't wait 10-15k over 25 years won't make much of a difference. In last 2 years I made 2 offers both rejected, around 10% lower but later realised that houses were on Market a year after that and sell for avg. 20% less than my offer. My advice stick to your offer call ea and advise offer is limited to month and see what happens it's a buyers Market stick to your guts there are plenty of houses on Market if rejected move on. House prices will fall 17% est this year so u have nothing to lose.
Best of luck...
 
Bronte said:
There are plenty of houses out there.
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Absolutely.

The absolute best thing to do is arrange to view a number of other similar houses. You might be pleasantly surprised at the choice and the willingness to do a deal. Getting hung up on one property is madness in the current environment.
 
I am no expert but if this house has a rental income of 1100 per month it is worth on paper no more than about 190k to me. if it has property management fees possibly less. i am basing this on a 7% yield which is what most investors looks for. Sometimes they may settle for less on a larger detached property but for a two bed I would not be entertaining anything less. I don't know anything about the area that you are proposing to buy in so there may be other factors to consider, but considering we have had the worst price drop in history 7% rental yield is a reasonable expectation. Even though you are not an investor, I would recommend treating the purchase as if you are to do your figures.
 
Even though you are not an investor, I would recommend treating the purchase as a potential headache, hearache and a pain in the proverbial.

Hold off, go back to the same agent and ask them for their list of other properties on their books. Try all the other agents in the area and the vendors will change their minds. The sale may be down to executors but they have learned damn all on the greed displayed in the current market place. I personally hope you find a house, a better house, a cheaper house and the vendors are left stewing with their inheritance.

Mr.Man is 100% correct.
 
mercman said:
The sale may be down to executors but they have learned damn all on the greed displayed in the current market place. I personally hope you find a house, a better house, a cheaper house and the vendors are left stewing with their inheritance.
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Yikes Mercman that's a bit harsh? It's only normal for sellers to want the best price.

OP - I thought I heard recently that the average price for a 3 bed in Dublin was nearer to 200K ?

Generally I go with the rent x 12 to 15 times value, but it is Dublin so there is always a premium there. One also pays extra for location and for getting what one wants.

Is a two bed a good idea? Have you checked Daft for similar type houses and is 270K the price for a two bed, how much are 3 beds?

But at the end of the day, if you're happy with it, with it's location, with the price, the transport links etc then you are doing the right thing. Please factor in about a 3% stress test on a mortgage and please don't get a 40 year mortgage. Max 25.
 
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