First time buyer and bidding

B

balkanhawk

Registered User
Messages
25
Hello all,

Me and my girlfriend are hoping to buy our first place together. We have spotted a lovely 3 bed end terrace duplex and its current asking price is €375k. We went to view it today and the estate agent (EA) told us that the current owner cannot afford the mortgage on it and will "take a hit" on the asking price. I thought that this was a bit unusual for a EA to say but he has been in the business a long time. We viewed a similar property in the estate that is on the market "EXCESS €350k". This place needed a lot of work, is mid terrace and the street it is on is not near as nice.
I typed the address into google and i spotted that the asking price had recently been dropped from €385k to €375k.
We are both leaning towards the €375k one but are unsure what to bid?? Any help would be appreciated.
 
First thing to do is decide in your own minds what you can afford, and keep this figure in mind when bidding: don't be tempted to go over it, as there are always other houses.

What it's worth is another matter: it all depends on how many similar houses in the location come up for sale, and how much they're selling for.

As FTBs in a weak/falling market you're in a strong position: make the most of it.

Without knowing anying about it, my inclination would be to put in an offer 10-15% below the current asking in the current market, unless that's way below any similar house that's sold in the past couple of months. If/when it's rejected, make the point that it's a serious offer, you're FTBs with mortage approval (i.e. you can close quickly with no conditions) and ask what is the lowest they'd be willing to go. I wouldn't move your first offer until they move the asking price. If they won't move this, leave it a couple of weeks and see will they move then: keep asking what their lowest price is.

One last thing: don't believe a word the EA tells you!

Good luck!
 
balkanhawk said:
Hello all,

Me and my girlfriend are hoping to buy our first place together. We have spotted a lovely 3 bed end terrace duplex and its current asking price is €375k. We went to view it today and the estate agent (EA) told us that the current owner cannot afford the mortgage on it and will "take a hit" on the asking price. We are both leaning towards the €375k one but are unsure what to bid?? Any help would be appreciated.
Click to expand...

Try 325k to 330k as starting and tell EA you are somewhat stretched at that level however can do deal quickly. You may have to go 10k higher to do the deal.

Remember in a slow market the EA will lean heavily to getting the deal done and therefore will tend to favour the buyer with information to get the deal done. In a sellers market EAs must get sellers so big prices are the marketing strategy, in a slow market there are no shortage of sellers but you got to make buyers count.

Also remember the vendor will expect you to go €10k higher than your opening offer to finalize so bidding a price creates an expectation on their side.
 
Rather than not believe a word the EA tells you, you should listen carefully as he seems to pretty much tell you that a deal may well be done. The other dupex being offered at €350k should be your guide because in my experience it is often the case that houses in good order don't sell for a great deal more than those in need of some repair in the same areas. His price has dropped by €10k so offer c.€340,000 (on the €375k duplex). and state that you really want that one but you may have no other option but to go for the other as it is closer to you budget, see what reaction you get as he seems to be ready with the info. If you start too low and they don't even consider your offers you will end up bidding up and up and then they will feel that you may go as high as they want. If €340,000 is rejected outright ask what is their realistic selling point and then make a compromise offer if you feel it is worth it.
 
Hi,
Thanks for the help. My girlfriend and i sat down and went through the figures together and came up with a maximum mortgage figure. I plan to place a bid of around €340-5 to test the waters. Ill keep you posted on the outcome.
 
Hello all,
We placed an offer of of 345k and the estate agent blew a fuse. Said it was a 'disgraceful offer'. I was quite taken aback by this. We asked if he would take the offer to the seller and he said he is legally obliged too. He called back the next day to say that the seller was 'disgusted' by this offer. We left it for a week and arranged a few more viewing. He called us back to inform us of another property nearby.
During this call we raised our offer to €352. He said 'great' and said that the seller is panicking because there is no interest. He believes she will take the offer. We are awaiting to hear back.
If this offer is refused should we leave it on the table and carryon looking? We can go higher and it is a dream property.
Advice would be great?
 
I wouldnt buy anything off someone that spoke to me like that. Plenty of more houses and nicers EA's out there. Tell him that too, see what he thinks.
 
MrMan said:
The other dupex being offered at €350k should be your guide because in my experience it is often the case that houses in good order don't sell for a great deal more than those in need of some repair in the same areas. .
Click to expand...

yes, but that was in a market on a high, now the quality stands out and holds its own against doer-upers. A good looking home gets more interest thus higher prices, in most cases.

Ein
 
balkanhawk said:
We placed an offer of of 345k and the estate agent blew a fuse. Said it was a 'disgraceful offer'. ....
that the seller was 'disgusted' by this offer. ....
said that the seller is panicking because there is no interest.
Click to expand...

This EA seems to be very unprofessional and is talking too much.....
€345k is not a ridiculous offer considering the lack of interest in the property.
As usual, the price a property is worth is only what somebody is wiling to pay.
Stick to your offer of €345k. You are in a strong position
 
I wouldnt buy anything off someone that spoke to me like that. Plenty of more houses and nicers EA's out there. Tell him that too, see what he thinks.
Click to expand...

He sounds ignorant, but the important thing here is the property, if you really want it I wouldn't leave it behind just cause the EA has no manners.

yes, but that was in a market on a high, now the quality stands out and holds its own against doer-upers. A good looking home gets more interest thus higher prices, in most cases.

Ein
Click to expand...

I read back over and realised it was a mid terrace against an end aswell, but there still should only be maybe €10k between them.
 
personally i'd agree with the EA... if i had my property on for 375k and you went in 30k below i'd be disgusted also!!!

if she's struggling with the mortgage then i would assume 375k isn't much over what she has her mortgage for...

anyway hope ya get it..
 
balkanhawk said:
Hello all,
We placed an offer of of 345k and the estate agent blew a fuse. Said it was a 'disgraceful offer'. I was quite taken aback by this. We asked if he would take the offer to the seller and he said he is legally obliged too. He called back the next day to say that the seller was 'disgusted' by this offer. We left it for a week and arranged a few more viewing. He called us back to inform us of another property nearby.
During this call we raised our offer to €352. He said 'great' and said that the seller is panicking because there is no interest. He believes she will take the offer. We are awaiting to hear back.
If this offer is refused should we leave it on the table and carryon looking? We can go higher and it is a dream property.
Advice would be great?
Click to expand...

Ho hum. I don't see how an offer 2% higher than your original offer can go from "disgraceful offer", "disgusted", to "great", that the seller will accept the offer. I guess unemployed actors have moved on from being waiters to the Real Estate game.

I'd have offered less on the 2nd offer.
 
Ho hum. I don't see how an offer 2% higher than your original offer can go from "disgraceful offer", "disgusted", to "great", that the seller will accept the offer. I guess unemployed actors have moved on from being waiters to the Real Estate game.

I'd have offered less on the 2nd offer.
Click to expand...

The differnece could quite possibly have been the mindset of the vendor after all they have the final say, an extra 2% isn't going to increase the coffers of the EA considerably so I can't see why he would be 'acting' in this instance. Offer less on your second offer and you may not be taken seriously at least i would be crossing you off of my list as a potential purchaser.
 
MrMan said:
The differnece could quite possibly have been the mindset of the vendor after all they have the final say, an extra 2% isn't going to increase the coffers of the EA considerably so I can't see why he would be 'acting' in this instance. Offer less on your second offer and you may not be taken seriously at least i would be crossing you off of my list as a potential purchaser.
Click to expand...

I don't really buy into this idea that only someone willing to continually up their bids is a serious purchaser. A serious purchaser is someone willing to sign the cheque and complete the sale. A really serious purchaser is someone who wants to get the property for the best price possible, not nesessarilly in the quickest time possible.

It's not the value of your offer which determines whether you are serious, it's the manner in which you negotiate the deal. Someone flip flopping from disgusted to ecstatic over 2% isn't serious in my book, and mind sets like that don't change in the course of a couple of days.

My opinion is that the "oh that's a ridiculous offer" flip flop to "oh that's a great offer" is just a mechanism of speeding up the deal, getting the buyer to the point where they're essentially bidding against themselves and happy the to sign asap even though there are no other bidders. Here's an example.

http://www.youtube.com/watch?v=2NSnShgwG3U
 
I can never figure out why people increase their offers by so much each time. Its only playing into the hands of the EA and the seller.

I purchased my house and the bidding went up in €1000 at a time and I did end up buying it. If you go up in more than that your just inflating the price
 
The original offer came in 30k below asking and was point blanl refused a lower subsequent offer from the same person to me would seem like a waste of time and someone who might only be trying to push the buttons of an EA. The EA has to have confidence in a purchaser to be able to go through to the signing of contracts and your described actions would seem to me somewhat unstable.

My opinion is that the "oh that's a ridiculous offer" flip flop to "oh that's a great offer" is just a mechanism of speeding up the deal, getting the buyer to the point where they're essentially bidding against themselves and happy the to sign asap even though there are no other bidders. Here's an example.
Click to expand...

Try this scenario vendor states I'm not interested in anything below €x so don't even consider them, many weeks pass and vendor is starting to have their eyes opened to the possibility of a drop in their valuation, but they do not relay this info to their EA, subsequently the EA receives offer of €x - €30k and thinks that the vendor will say 'Were you not listening to me, that is an insulting offer' , but when they actually go back to the vendor they may say we would be interested at a little bit more than that, which leads to the change in EA behaviour/persona.

A little long winded, but not a totally unlikely scenario.



I can never figure out why people increase their offers by so much each time. Its only playing into the hands of the EA and the seller.

I purchased my house and the bidding went up in €1000 at a time and I did end up buying it. If you go up in more than that your just inflating the price
Click to expand...

It really all comes down to different strategies, some people bid high to try and blow the competition away, I have seen on many occassions where bids of €500 and €1000 have lead to a slower process which has in turn attracted extra bidders.
 
I should have prefaced my comments with: In the current market.

There is no competition to blow away with high bids. When there are more sellers than buyers you should keep your bid static and let the sellers expectations drop to your level, THEY then run the risk that you will find a extra seller and bid on a lower priced property, reducing your bid on the first property further.

In a falling market you kind of have to assume that you've just entered Bizarro World.
 
It is one of the jobs of the EA to keep relations between a vendor and potential buyer calm and relaxed, even if they never meet. It is massively counter productive to agitate a situation by saying the vendor is 'disgusted' etc..Ask the EA who the vendors solicitor is cos you want to infom them of difficulties in negotiations. Regarding offers I would be of the mind to be slow to increase offers in the current market.
 
Howitzer said:
Ho hum. I don't see how an offer 2% higher than your original offer can go from "disgraceful offer", "disgusted", to "great", that the seller will accept the offer. I guess unemployed actors have moved on from being waiters to the Real Estate game.

I'd have offered less on the 2nd offer.
Click to expand...

Well if they have I wish they would act like sales people

Ein
 
balkanhawk said:
If this offer is refused should we leave it on the table and carryon looking? We can go higher and it is a dream property.
Advice would be great?
Click to expand...

Short answer: yes.

You're in a very strong position (ANY buyer is in this market).

If they try and get you to move higher (which they will) just say that you're very interested, your offer is still on the table, you can close quickly if needed, and you're looking at other properties (you can remind the EA there are plenty available) in the meantime.

If they don't bite, leave it a couple of weeks, ring up and ask what their lowest price is, and then make a decision (Camry's criteria are very good for this) on whether to bargain to close the deal or walk away.

Try and keep business-like and professional (unlike the EA) and emotion out of it: plenty of time for that when you get the keys to your new home (whether this or another one).


Remember:

- it's real cash you're playing with
- there's plenty of choice out there
 
You must log in or register to reply here.
Back
Top