Bidding War --- Against yourself, what to do

gerire

Is pretty much the situation we are looking at, at the moment. We are a young couple looking to stay in Dublin, crazy I know, and near to where we currently live. And to boot, tryin and keep it under 317.5k

After many viewings we finally found a place, 2 bed apt, that seemed too good to be true. The AMV on the apartment was 305, and when we went to see it on its 2nd viewing there was on offer on it at that and we offered 306 immediately. All seemed good, little interest from other parties, and only 2 other people viewed the place.

So after the seller holding off and placing the apt in the papers last week he came back to us and said, well I thought I was going to get the 317.5k in the current market place. So trying to be reasonable we went back with an offer of 310k to try and meet in the middle but there was no budging him. (All this done through estate agent btw) The last thing I want is to start upping the offer on a daily basis just to satisify him.

The major thing holding me back on this property is the management fee of 1700 which for a 12 yr old apt seems quite expensive. He has said to the estate agent that if he doesnt get the 317 he would probably just do it up and rent it out again.

Any advise from anyone who has been in a similar situation? Or from anyone with ideas, just give in and pay it? Or keep on throwing out tester bids. So confused as have never been in a situation like this before

The_Conductor

Offer the 317.5k on the nose, but time limit acceptance to 48 hours.
Make sure he is fully aware that you are walking after the 48 hours.
If you're still being messed around at that stage, walk away.

the_batman

With the market the way it is, I would consider offering 309k with a 48 hour time limit.

Alternatively wait a few months and offer 250k!!!

Lex Luthor

its a mad situation when you see the stamp duty brackets governing the price of houses, but thats just the nature of it in the current day. They have only said that they thought they would get the 317.5, so that doesn't mean they will hold out for it.

What about approaching the vendor direct and doing a deal with them without the estate agent? They could save a good few grand in the process

EKRIUQ

To be honest, sellers can be more stuborn than buyers and if you've been shoping around you know the value of this property (And so will someone else soon) My advice would be, if the seller won't budge below the €317,500 and you want this apartment pay the money before someone else comes in and does it. Trying to annoy the seller by increasing your bid every day will piss off the seller and the estate agent and out of bull headedness won't agree to sell it.

Giving a time limit if fine if your ready to walk away from the sale but if your not offer what your willing to pay for it.

Weigh up all the pro's and cons and make a decision but remember you can't blame the estate agent or seller if your not happy with your decision, The likelyhood is if you don't buy it the seller will spend a couple of grand doing up the apartment rent it again and try to sell it in a couple of years at a more inflated price.

EKRIUQ

the_batman wrote:

With the market the way it is, I would consider offering 309k with a 48 hour time limit.

Alternatively wait a few months and offer 250k!!!

:rolleyes: :rolleyes: :rolleyes:

bbbbb

I'm sure you'll get lots of advice in terms of bidding strategies, and of course we all want to pay the lowest price possible

At the end of the day though, you'll never know if you're bidding against youself or if the agent is playing games. They're the professional & have no emotional involvement so have the upper hand.

Decide yourself what the most your willing to pay is, i.e. what the property is worth to you. Then use what ever strategy looks best to stay below this.

Personally, I would let things sit for a while. Of course you then risk another buyer entering the scene (real or fictional)...

Good luck!

chump

1700 management fee. It's just criminal really!

My advice would be -
If you really want it, and think his asking pirce represents fair value, and you haven't found anything suitable of similar 'value' - go for it.

I personally wouldn't get in a bidding war with myself, and I think it's outlandish that stamp duty thresholds have the effect they do. Really need to bring in banding.

Anyway, gud luck - at the end of the day tis your call!

Gurgle

gerire wrote:

So trying to be reasonable we went back with an offer of 310k to try and meet in the middle but there was no budging him. (All this done through estate agent btw) The last thing I want is to start upping the offer on a daily basis just to satisify him.

My advice is don't move from 310k.
His asking price was 305k and yours is obviously the only offer he has got.

gerire wrote:

He has said to the estate agent that if he doesnt get the 317 he would probably just do it up and rent it out again

Bull tbh.

Estate agent thinks he can squeeze the last few grand out of you, and the way you're talking he is probably right. You've already increased your bid by 4k for no particular reason, increasing it again will only encourage him.

Tazz T

The market is changing. Tell him that your offer reflects the large management fee. Unless you really like the place and I suspect you have second thoughts because of that management fee, tell him he has a week to accept the offer or you'll look elsewhere.

PS: While he's delaying, you should be looking elsewhere anyway.

The_Conductor

chump wrote:

1700 management fee. It's just criminal really!

No- its about average or even on the low side for Dublin. My sister is paying 3,200 in The Old Distillery on Cuckoo Lane in Smithfield D5, and a brother is paying 4,000 in Riverpark, Conyngham Road D7.

Your Management Company should prepare certified accounts annually showing receipts and expenditure and be able to stand over these. Normally there would also be an agreed programme of activities at the Annual General Meeting- and if an issue arose with the level of Management Fees, that would be the appropriate venue in which to have it addressed.

Petition your local councillors to have a tax credit wholly to cover Management Fees for owner occuppiers (Landlords already get tax relief on rental income towards this and other expenses).

Ps- ask the owner for a copy of the most recent accounts from the Management Company- it should illuminate as to the level of activity of the company in the development.

Tazz T

smccarrick wrote:

a brother is paying 4,000 in Riverpark, Conyngham Road D7.

Jesus, that's horrendous! Paying over 300 a month on top of a mortgage. I daresay place like that will be difficult to sell in the future.

The_Conductor

Yes, its high. Its the perennial problem though- Management Companies having low fees initially and then after a few years when work becomes necessary (usual stuff- painting, guttering, lifts etc) they yank up the fees as they have no (or insufficient) sinking fund.

Management Companies will make or break elections in the future.....

aniascor

My sister is paying 3,200 in The Old Distillery on Cuckoo Lane in Smithfield D5

I can't believe that! If they're the apartments I'm thinking of (around the Distillery), then the public areas in those apartments don't seem to be well-maintained at all. I don't know how the management company can justify that.

EDIT: Sorry I realise this little rant of mine is off-topic.
To make up for that, my piece of advice for the OP is to hold firm. EAs will try to get every penny they can from you. That's what's happening to you right now.

miju

Gurgle wrote:

My advice is don't move from 310k.
His asking price was 305k and yours is obviously the only offer he has got.

.......

Estate agent thinks he can squeeze the last few grand out of you, and the way you're talking he is probably right. You've already increased your bid by 4k for no particular reason, increasing it again will only encourage him.

the_batman wrote:

With the market the way it is, I would consider offering 309k with a 48 hour time limit.

Alternatively wait a few months and offer 250k!!!

i agree with these two posts strongly , the EA is obviously playing games and as you yourself suspect your bidding against yourself

table an offer of 309k with a take it or leave it attitude, in the current market with asking prices dropping up to 33% the buyer will take it (may actually be worth mentioning that to the EA to put the frighteners on him / her )

The_Conductor

aniascor wrote:

I can't believe that! If they're the apartments I'm thinking of (around the Distillery), then the public areas in those apartments don't seem to be well-maintained at all. I don't know how the management company can justify that.

I know what you mean- the security things on the gates are constantly vandalised too, and the lifts are out of order more often than they work..... A lot of this is a don't care attitude on the part of the tenants, and local kids causing wanton destruction to gates and things.

OP- Get a copy of the annual report of the Management Company to see what is happening in the complex you are interested in bidding on.

dools

Gerire,

I would suggest you decide an offer you think it's worth and table it with a time limit as the others have said. It's very stressful going day to day waiting and wondering so put yourself out of your misery, tell the E.A you are offering €xxx and it stands until 4pm today. End of. If not accepted, walk away.

We did this with our last house. They would'nt accept the asking price so we upped €5k - for no reason. They came back and said no. There was nobody else in the picture and the place had been up for sale for a month or so. We said it is our final offer, stands till 4pm or else we're looking elsewhere. E.A called back 10 mins laster to say it was accepted. We loved the house, but were ready to walk away as we were not willing to throw endless money at it on an offer and we did'nt want to be stressing for days with a 'Will they? / Won't they'

I think you're prob in a strong position. The market has completely changed over the past month or 2. Buyers are deffo in a stronger position. Best of luck

D

Calina

There is no such thing as the "only" perfect house. I've found this over the years. You'll find others.

If you have offered price X and it exceeds the asking price, then I would flatly refuse to make any subsequent offers if there is no other buyer. Even if there is another buyer, you are no worse off by losing the house than you were in not having it in the first place.

I realise it is normal, but I do think it is amoral to offer a house for sale at a given asking price and then refuse to take that price if it is offered. In France it is illegal to reject an offer which meets the asking price. It's a pity it's not the same here.

moto2006

my other half and I were in a very similar situtation where we were the only interested party and offered the asking price for a property which had been on the market a fair while. It was rejected and the estate agent came back and said they would sell for 5k more then then asking. I loved the house and talked the OH around to offering the 5k, even though he was dead set against it (no one else, after 2 months had put in an offer).
We got to sale agreed with a closing date of 10 weeks, we signed our side of the papers, etc but the sellers missed their closing date to sign. We rang the estate agent and were told everything was fine, they were just delayed and the next day the EA called us to say they wanted another 20k for house and were backing out of orginal sale. GRR
No one can say what a house is really worth, it has to be what you are prepared to pay yourselves. If you love it, and can afford the 317,500 and would be happy to pay it then fine but be careful, if no one else is interested at that price there is probably a reason! I agree with Calina, if you want X for your house just say it, dont waste peoples time! Best of luck anyway
BTW our orginal house stayed on the market for nearly 6 further months before they sold, and we got different house which is also very nice and the orginal price we wanted to pay... Hope it works out for you

gerire

I just want to thank everyone for the advise so far, more still welcome. It looks like we are going to sit tight on our current offer and maybe try and get the EA to give him a push during the week. We are looking at other properties still if this guy continues to f00k around with us. It has come to my notice that it would only work out at roughly 40 a month ontop of the mortgage we would be applying for. But I dont want to offer him money for nothing.

Will keep ye informed of what happens

Thanks again all

OTK

Separate your emotions from the bid process. It doesn't matter who loses face, keep your eye on the objective which is to obtain a nice place at a reasonable and affordable price to you. If the place you are looking at is going to make you and partner very happy and you don't believe you will find the like elsewhere then go ahead and pay the asking.

It is very difficult to negotiate with anyone without an alternative in place. You should work at finding other properties to bid on and the EA should be made aware of this alternative.

Estate agents do not tend to try to squeeze the absolute highest price from buyers (as you may have read in Freakonomics). It is not worth their while to mess about for weeks and possible lose the sale for the commission on 7.5 K (maybe 150 euro). The EA usually pressurises the seller to accept the best offer so that they get the main part of the commision and can move on to the next sale.

This is a buyers market. Prices are crumbling. Some sellers will react by sittting tight and trying to ride it out. But there will be many vendors with the fear.

Gurgle

OTK wrote:

go ahead and pay the asking.

He's already offered the asking + 4k, so they've bumped up the asking price :rolleyes:

antoinolachtnai

So what? If you want it, you want it. Just because you think the vendor and/or his agent is a jerk doesn't mean you shouldn't take the house off them.

If you can line up some alternatives, so much the better.

It's not as skewed as it was, but this is a long way from being a buyer's market. Sellers are setting the prices.

OTK

antoinolachtnai wrote:

Sellers are setting the prices.

In a free market, buyers always determine the prices. Specifically the highest bidder in each transaction sets the price if the vendor agrees to sell. As I'm sure you know!

OP should investigate any other avenues of negotiation with the vendor. Do you have mortgage approval in hand? This is better than a contingent bid.
Are you willing to buy furniture/fittings? might be worth something to the vendor. My perspective is that prices are now falling and that time is on your side. I would set a deadline for your bid with the proviso that you will make a lower bid after this time. It can take a while for the vendor to accept the market reality. His claim that he will continue to rent it out if he doesn't get the price he wants may well be a bluff alternative option while he sits on his hands hoping that a better offer will come in. His yield is likely 2%, interest rate 4.5%, mangement cost .5% and he may well face capital losses and a more illiquid market starting next year.

Approaching the vendor directly sounds like inducement to breach a contract.