How to handle offer guidance from Auctioneer

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Warren

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Hi guys,

We are looking to trade up and have been looking at some houses recently. We came across one that we like the look of and when we contacted the Auctioneer she told us that there was already an offer on the house - she indicated that the offer is 40k below the asking price. We've been to see the house and had a discussion at that viewing where the auctioneer reiterated the fact that there was an existing offer on the house. The amount she is indicating that the current offer is for is a little higher than our budget allows for so unsure how to proceed.

Is there anyway we can validate that there is already an existing offer on the house? Would the auctioneer have any motivation to tell us there is an existing offer before we even went to see the house (the only one I can think of is that she is telling us that there is an offer at price x in order to set a lowest point/starting point for subsequent offers). Could we or would it make any sense to make an offer below the value she is telling us has already been offered?

Appreciate the above may seem obvious to some folks but our experience in buying our first house was very different - large estate with all houses fixed price.

Thanks,
Leonard
 
If it is above your budget you will have to walk away.
However I would ring the estate agent and express that the offer that is on it is above what you were considering offering but thank you for the viewing. Tell them also that that is the type of house your interested in and if anything else comes up similar to get in touch.
By doing this you are letting her know your interested in the house but not at the offer price pitched.
 
As above, but remember that it's only an "offer" on that house - offers come & go... so show your interest, leave your details ... but keep looking around...

What position are you in financially? You indicate that you are "trading up"? Have you got your current house sold? If you were to have the money ready to go, then you are in a much much stronger position to "bargain" with EAs...

Best of luck with it...
 
Jazz01 said:
As above, but remember that it's only an "offer" on that house - offers come & go... so show your interest, leave your details ... but keep looking around...

What position are you in financially? You indicate that you are "trading up"? Have you got your current house sold? If you were to have the money ready to go, then you are in a much much stronger position to "bargain" with EAs...

Best of luck with it...
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+1 sold a house few hrs ago and took an offer 15k lower than the highest because the buyers were ready to go, if your in this position let the estate agent know your ready to buy immediately without telling them how much your offer is, ball is in their court then, also let them know you have another property in mind it will speed things up
 
Just make your offer anyway. She may have told you that offer because the vendor's will not accept any offer below that figure.
 
Thanks for your comments guys appreciate them.

As regards our financial position we have an existing house which we will rent out (likely a separate post on that one :). We have good savings and the bank have indicated that we should be approved for the mortgage but I dont have a formal offer as of yet. Is it normal practice for people to make an offer on a house without actually having a letter of offer from the bank?
 
If you have a letter of offer, then you are in a stronger position. The EA may not take your offer too seriously without such, but nothing stopping you making an offer.
 
offer on house

may be too late but just wanted to share our story which may be of interest in relation to an "offer" on a house, basically a very similiar story we went to view a house that we were very interested in to be told there was an offer on it that had not been accepted, we viewed a second time and were told that the offer and a little bit would likely close the deal. To start the ball rolling and as you said to validate the offer we came in 20K under the offer which was refused , we ended up going up a further 15k which was 10 k under the alleged offer and 55k under asking price and now have sale agreed and the contracts are with our solicitor! you can never be to sure!
 
There is a Key Post How to deal with an estate agent which is well worth reading.

At the time it was being discussed, although houses were not selling, it was an extraordinary conincidence that whenever anyone made an offer on a house or expressed interest, the auctioneer told them that there was a higher offer in place.

I like 63 Gem's story. Make an offer below the offer they have already been made. The auctioneer may be telling the truth, but then again it is unlikely.

Brendan
 
63gem said:
To start the ball rolling and as you said to validate the offer we came in 20K under the offer which was refused , we ended up going up a further 15k which was 10 k under the alleged offer !
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Is that possible ?

Should it be 5k under alleged offer ?
 
I feel there is something that we all forget at times ie the Auctioneer is acting for the seller and not for the buyer. It is always a good idea to say very little in front of the Auctioneer, do not let them know how much you are willing to spend on the house. Sometimes when you really like a house you get carried away and say too much in front of the auctioneer!
 
Stronge said:
I feel there is something that we all forget at times ie the Auctioneer is acting for the seller and not for the buyer. It is always a good idea to say very little in front of the Auctioneer, do not let them know how much you are willing to spend on the house. Sometimes when you really like a house you get carried away and say too much in front of the auctioneer!
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You could always use this to your advantage. Say let them "accidentally" over hear you talking with your other half, saying you like the house but you are only approved for X (not the real X of course), then you make your initial low offer, do the back and forth up to X, then the EA thinks they've done an amazing job and you get a good deal.
 
ryaner said:
then the EA thinks they've done an amazing job and you get a good deal.
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Never underestimate the avarice of an EA. While you might think that revealing an imaginary mortgage approval figure to them might convince them they've got you, they'll actually be wondering if they can squeeze a bit more, and get you to tap other sources of money - family, credit union, vital organs on the black market, loan sharks, whatever.

I think you need to have your very best poker face on, and reveal absolutely nothing to an EA beyond basic information about your bid (which is € plus your status as a bidder).
 
brianb said:
Never underestimate the avarice of an EA.

they'll actually be wondering if they can squeeze a bit more, and get you to tap other sources of money - family, credit union, vital organs on the black market, loan sharks, whatever.
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I am aware of this which is why I mentioned that it shouldn't be your real approved amount.

Actually I'm still surprised that the banks seem to want to have people applying for larger amounts than they want. Every interaction with the banks I've had has always included the line of "You know you can apply to borrow more than that?"
 
Brendan Burgess said:
The auctioneer may be telling the truth, but then again it is unlikely.
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This is a stark, in my experience, accurate statement about the property business in Ireland. Even with the huge fall in the market, I still hear friends reporting deep uncertainty about the probity of EA's. Everyone making an offer on a house, and hearing within hours or counter offers arriving will have the same fear: that they are being hoodwinked by the EA and imaginary bids. If this was a financial product, ugly words like fraud would be employed if similar sales tactics were in use.

The house price register will work some way towards rectifying this, but lets face it - this tool is not being put in place by our caring government to protect vulnerable young families from ravening EAs.
 
It's called negotiation.

The EA is not the buyer's friend. S/he is in business.

"this tool is not being put in place by our caring government to protect vulnerable young families from ravening EAs."

If people could just grow up and act in an adult fashion and not expect their hand to be held in every thing they do..........................

mf
 
I think the slight of hand often alleged of EAs on AAM might be over stated. No doubt they try to manage all parties expectations but surely they just want to close deals rather than maximise prices. Perhaps I am naive but I have found the EAs I've dealt with last year and this to be straight forward.
 
Thanks for all the feedback guys - an extremely interesting thread. Have looked at a few other houses in the meantime but we are going back next week to see the house that triggered this thread (the one with an "existing offer") so Ill keep you up to date on how it goes
 
Please note; We made an 8k underbid on a property in the last week, the EA was to get back to us. Waited for a call, a few days later EA confirmed Sale Agreed. Really gutted and just wanted to convey a warning with under bidding. Talking to EA, the under bid was just not seen as a serious offer - note the under bid was coupled with quick sale i.e. no mortgage approval needed.
 
Not every seller will agree to an underbid cash sale if they prefer to wait and have more money.
 
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