Bidding on a house - what to do?

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TheBargyman

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About to possibly bid on a house in a rural area in the South East.

House is only about 4 weeks on market but has no bidders yet.

Asking price seems slightly high but I’d be amazed if there’s not interest in the house.

Our maximum we can afford is 5k more than asking price. We are not in a chain so can close very quickly.

Any advice on how we should bid? We have no clue what we’re doing so no idea whether to go 20k below asking price, go straight to asking price or go straight to our maximum.

Any strategy would be much appreciated.
 
Lots of useful advice in this key post

Key Post - Bidding strategies when buying property.

With property purchase being so expensive these days it might be worthwhile to share people's approaches to bidding and tactics that might be useful. www.daft.ie give the following advice: Here's how to win a bidding war You've searched for months, have secured a mortgage from a bank and now...
www.askaboutmoney.com
 
Super job by the mods and other contributors for gathering such a rich repository of information and advice.

Nul points for those choosing to ignore it
 
Have you talked to the auctioneer? Have the owners refused previous offers? Is there much interest? Are they in a hurry?

Coincidentally, our home is just come on the market in the SE, and in four weeks time I can't imagine we'd consider an offer of less than the asking price. Possibly in a few months we would, that would depend.

We've just bought a place too. From the buyer's perspective, unless the auctioneer tells you different I wouldn't bid more than the asking price initially, which gives you leeway to go higher. If you aren't the winner then it wasn't meant for you, and the home you buy will be the right one.
 
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TheBargyman said:
Our maximum we can afford is 5k more than asking price. We are not in a chain so can close very quickly.

Any advice on how we should bid? We have no clue what we’re doing so no idea whether to go 20k below asking price, go straight to asking price or go straight to our maximum.
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Don't over think it, it is not a war despite what people may tell you.

Make a reasonable offer, bearing in mind what the seller reasonably expects and what you can afford.

Get an independent view on what the seller might reasonable expect, prices are firm at the moment, and asking prices are usually pitched low rather than high. Though if it is 4 weeks on the market with no offers, perhaps it is over priced.

Bidding €20k below asking strikes me as messing. The seller hopes to get at least the asking, and even if they have miscalculated they won't sell the house at what they think is a low price to the first person that comes along.
 
TheBargyman said:
How many points for those that didn’t see it?
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A more user friendly reply, read the posts above. Then let the EA know you are not in a chain, AIP, cash buyer as that makes a huge difference for how EA's present your bid to the Seller.

Aside from the above act interested and never go in high. The current housing market doesn't really allow for this but the old saying is "if you aren't completely embarrassed by your first offer then you've bid too high".

It all depends on the local market, your strategy changes depending on if the house is at the top end of the market, midrange or lower end.

For example, I had my first offer accepted slightly above asking in August as the seller wanted to sell quickly. Also I suspect the other bids to match the asking price were fabricated.

Go with your gut, if it's your dream house go low and see what happens you can always increase your offer. Whereas reducing your offer annoys the seller.

Good luck!
 
It’s a sellers market. Between a sibling and I bidding on a few properties we know everything is going for over asking currently. Anything from 5 to 30%. The 30% was on an expensive property by me the third under bidder and I was a cash buyer.

My sibling had bid 2 weeks ago and lost. Auctioneer came Friday to say top bidders who secured it has pulled out (cold feet we assume, but auctioner gave a reason that I’ll divulge later, too outing if I give too many details). Sibling agreed on around x K less with auctioneer from top bid, yesterday, my advise to sibling was let vendors sweat it over the weekend, so they’d be more realistic from the higher bidders. We have no idea if sale will go thru as it’s impossible to tell.

So far no auctioneer has asked me to prove I’m a cash bidder. One property was auctioneered by a Chinese man based in Dublin whom I could barely understand, couldn’t let anyone see the entire property, tenanted, and had bids.

Bid slightly below asking, ask the auctioneer will the vendor sell for asking, to gauge if he wants more. End up at your 5k over. BTW 5k is nothing.

Why do you want this particular house.
 
It’s not in Dublin, so people’s experience there is less relevant. It’s been on the market for four weeks and there are no bids. If I was a cash buyer and the asking price was €400k and the price more or less stacked up, I would bid €350k and let them know I’m a cash buyer ready to close.
 
How bad do you want the house and what is your limit?

Put in how much you are willing to pay for the house, explain it's your only offer as you are not approved for anymore and you don't want to be wasting anybody's time, and that you are ready to sign on the dotted line.

You don't have anything else to offer other than that so the cards have to be on the table right from the start.
 
There is no right answer to the question.

While most estate agents pitch the price lower than they expect to get, some price it higher and expect to get a bit less. Others pitch it below what they expect to get but they find they get no offers and have to reduce the price.

If you expect this to go about 10% above the asking price , then you can't afford it. You have nothing to lose by putting in an offer about 10% below the asking price. It will probably be rejected but you should get useful information from the auctioneer in response. You can then decide what you want to do.
 
Sarah Ryan said:
How bad do you want the house and what is your limit?

Put in how much you are willing to pay for the house, explain it's your only offer as you are not approved for anymore and you don't want to be wasting anybody's time, and that you are ready to sign on the dotted line.

You don't have anything else to offer other than that so the cards have to be on the table right from the start.
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I was thinking of doing it this way, and bidding at my top limit but thought that by telling the estate agent that it would be very easy for him to say to any potential bidder that we have a bid of X on the house and they’ve said it’s their first and only bid so go higher and you’re sorted.

There are three other people seeing the property this week and given the size of it and the price, it seems to pack more of a punch than other nearby houses for sale… though it still appears to me to be a bit too much.
 
TheBargyman said:
I was thinking of doing it this way, and bidding at my top limit but thought that by telling the estate agent that it would be very easy for him to say to any potential bidder that we have a bid of X on the house and they’ve said it’s their first and only bid so go higher and you’re sorted.

There are three other people seeing the property this week and given the size of it and the price, it seems to pack more of a punch than other nearby houses for sale… though it still appears to me to be a bit too much.
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Why would you do that on a property that’s been on the market for a month and has no bids on it?
 
Sarah Ryan said:
Put in how much you are willing to pay for the house, explain it's your only offer as you are not approved for anymore and you don't want to be wasting anybody's time, and that you are ready to sign on the dotted line.
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The problem with this approach is that these days Estate Agents ask for proof of funds whether you are a cash buyer or have AIP. I had to upload proof of funds on the EA's website before I could submit a bid.

I was super lucky that after 12 months+ of viewing houses that as soon as I registered on the EA site they were calling me non stop to put in a bid. This was in County Wicklow for reference.

So they really know what you can or cannot afford. So as a buyer you need to stick to your bid and not get sucked into the whole someone else bid more etc.
 
TheBargyman said:
I was thinking of doing it this way, and bidding at my top limit but thought that by telling the estate agent that it would be very easy for him to say to any potential bidder that we have a bid of X on the house and they’ve said it’s their first and only bid so go higher and you’re sorted.

There are three other people seeing the property this week and given the size of it and the price, it seems to pack more of a punch than other nearby houses for sale… though it still appears to me to be a bit too much.
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Dare I say you are over thinking this which is what the EA wants you to do. Never go in at your top bid... reserve that if it is your dream house and be prepared for another bidder to go higher. Just put in an offer below asking and see what happens.

I rocked up to view the house I bought recently with several peeps viewing it. Viewings don't equal bids and keep in mind any work that needs to be done to make it your ideal home.

Edit: I need to state that I was trading up not buying my first home. So the concept I added of a dream home was more applicable to my situation. Rather than moving from renting to a permanent abode. Still put in a cheeky offer and see what happens, others are correct it's a sellers market but every sellers circumstance is different. Good luck once again!
 
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Many thanks for all the advice, it’s really helpful.

We are not a young couple by any means but we are buying our first home (currently renting). Not sure if that info makes a difference to our strategy.

We are ready to go, mortgage approved, not waiting on a chain of sales, eager to get sorted!
 
Sarah Ryan said:
Put in how much you are willing to pay for the house, explain it's your only offer as you are not approved for anymore and you don't want to be wasting anybody's time, and that you are ready to sign on the dotted line.

You don't have anything else to offer other than that so the cards have to be on the table right from the start.
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There are a few problems with this strategy.

1) You might be overpaying for the house if they have a lower figure in mind. If they have a higher figure in mind, you are not going to get the house.

2) No estate agent will believe you. They will be used to this sort of talk and will tell the seller that this is common place and that it's really just your first offer.

Negotiating the price is a game with a few ritual steps in it.
You put in an offer which is below what you are prepared to pay. You know that. The seller knows that. The estate agent knows that.
They will usually reject that offer or say that they will think about it or tell you that they now have a higher offer, whether they have or not.
You offer a bit more.

Knockout, take it or leave it offers, do not work in this market unless the property is worth about €500k and you are prepared to pay €700k because you want this house and don't care about the price.
 
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