How to bid on property - advise needed?

adelcrowsmel

Hi Guys,

I'm just looking for some help and advice when it comes to bidding or putting an offer in on a property and more specifically how much more to counter bid by.

The house I'm interested in is advertised as "in the region of' €165,000. This is a house that has previously been on the market for sale in 2013 for €169,0000 and was withdrawn by the vendor as they must not have gotten a reasonable offer and now they have relisted it with the slight pick up in the market.

The estate agent said an offer of €160,000 is in on it currently. I want to put an offer in by really don't know how much. Do I just go €1000 more or should counter offers generally be in €2000s...is there a general rule of thumb? I would be happy enough to offer the €165,000 if I didn't think that might meant starting counter bids in €5000 increments and the other interested buyer coming back with an offer of €170,000 as I'd find it hard to come back with much if an more that that in another offer.

I'm so confused about how to go about this...any help or advise please?

BBDBB

You cant predict how other bidders will react, so there is little value in worrying about what you cant control

You CAN control, YOUR bid.

The amount is only one factor, its likely given the previous withdrawal of the property that the vendor wont want to hang about. So the strength of your bid could be enhanced by the solidity of the funds, is it genuine cash?, ie sat in the bank (resting in your account ) waiting to be transferred, is it from the sale of another property, if so have you sold it yet? is it even on the market? have you been to see a mortgage adviser to get a mortgage set up?

The reason the solidity of the funds is important is that it can slow, delay or even scupper a sale if the potential purchaser isn't as solid as they pretend to be when bidding at first.

Another factor that could enhance your bid could be the time frame of when you would want to move. Have these vendors found another house yet? (do they need to? )

Theres a few things you can do with the above in terms of how you present the bid too (with a skilled Estate Agent anyway).

P. Breathnach

I interpret "in the region of €x" as meaning that the seller does not expect to receive quite as much as €x. Whether or not the seller's expectation is well-founded is another matter.

The next question to consider is whether the other bid is genuine. Sometimes an EA might invent a bid to create a baseline for the price. You need some skill to "read" the EA. It seems clear that you believe that the other bid is genuine, and I don't know anything different. But you should bear in mind that the other bid might not exist.

In your position, I'd tell the EA that I was interested, but that the price level looks a bit high for you, that you will do some sums and get back to them. Take about three working days, and come back with an offer of €171k. That way, you might have put across the message that you are at your upper limit, and that the EA would be unwise to play you for a higher amount.

If the other bidder comes back with a higher amount, then you are possibly in a genuine contest, and it becomes a different game.

crackcrack30

If its worth it to you I would go up 1k and see what happens......that 160k bid could just be the sellers starting point or a bone from an untrustworthy EA agent with interest but no confirmed bid behind it....How long is it up for sale?, if its just up you have time to think.


BTW..


Is a cash buyer (A) a buyer with a suitcase or account of cash. or
(B) a person who has a mortgage approved with no other property to sell?

professore

If you're happy to offer 165 then just do that. If the other guy comes back with a higher bid, walk away. Tell the EA this.. If it's a fake bid the other bidder will mysteriously vanish. If not, you're going to lose anyway.

BBDBB

crackcrack30 wrote: »

If its worth it to you I would go up 1k and see what happens......that 160k bid could just be the sellers starting point or a bone from an untrustworthy EA agent with interest but no confirmed bid behind it....How long is it up for sale?, if its just up you have time to think.


BTW..


Is a cash buyer (A) a buyer with a suitcase or account of cash. or
(B) a person who has a mortgage approved with no other property to sell?

Most agents will treat them both as cash, but its more a colloquial term than a strict definition

A sensible agent and one with more experience will ask for proof of funds in the first example and documentation to prove the second as they will have been bitten before and seen deals go down the tubes

The reality is that sometimes purchasers will lie about the source of their funds, they say something to shut up an agent they don't trust and don't realise how it has undermined themselves later in the process

Sometimes purchasers tell the truth but subsequently the mortgage provider will withhold some of the money, for example on the back of a survey that says work needs to be done to the property. Or they haven't taken into account all of the associated costs of moving and when they bid at their limit they find they haven't quite got as much as they thought.

P. Breathnach

P. Breathnach wrote: »

... and come back with an offer of €171k. ...

Lapse of attention on my part: I meant €161k.

Bigus

A genuine proof of funds cash offer will get discount over a mortgage approved offer, as was proved by my estate agent friend recently by his clients, of the order of taking 204k cash against 215 loan approved , Cash client is less likely to have show stopping solicitors queries fecking up the sale gong ahead too , as banks nowadays want 24 carat warranties as regard to title , planing etc etc etc .

Diane Selwyn

my experience of looking in that region (asking c. e165,000) in Dublin recently has been that nothing seems to be going for under e190,000. You could of course be lucky and come across a property that has not attracted the eye of a cash buyer or investor with seemingly bottomless pockets I'm just saying that I did not. I'm all for going up in small increments but you need to be prepared for someone to come in with a big jump and decide ahead of time how high you are prepared to go otherwise your immediate reaction will be to pull out at what you later realise is the current going rate.

adelcrowsmel

Thanks for the replies guys. I'm a first time buyer so really don't know how to do this bidding part so all the advise is appreciated.

In reply to some of the questions....I am mortgage approved and currently at the end of a rental lease so I'd be ready to move on the house immediately and move in asap if sale/mortgage went through quick. The vendors are moving back home to another country. The house had previously been up for sale for over a year before being withdrawn but this time is only on the market a few weeks.

The property is in the north east so not in Dublin so
I'm hoping in the region doesn't mean alot more than €165k

Diane Selwyn

adelcrowsmel wrote: »

The property is in the north east so not in Dublin so
I'm hoping in the region doesn't mean alot more than €165k

It may not so - I was only looking very close to the city. Best of luck with it!

BBDBB

adelcrowsmel wrote: »

Thanks for the replies guys. I'm a first time buyer so really don't know how to do this bidding part so all the advise is appreciated.

In reply to some of the questions....I am mortgage approved and currently at the end of a rental lease so I'd be ready to move on the house immediately and move in asap if sale/mortgage went through quick. The vendors are moving back home to another country. The house had previously been up for sale for over a year before being withdrawn but this time is only on the market a few weeks.

The property is in the north east so not in Dublin so
I'm hoping in the region doesn't mean alot more than €165k

Sounds like you are in a strong position

theres no set way of making an offer as such, some people phone in a figure, it can also be done in writing. I think there is a slight advantage in going into the office to make the offer, just simply because you get to see the body language & reactions to what you are saying and they can see you and go sell your story to the vendor, seeing you (even liking you) can help them do that.

How much interest have you already shown in the property? if its a lot then trying to bluff and pretend you don't care if you get it or not is a pretty futile exercise, it is also fairly pointless if you go in with an offer lower than the amount already offered, you could do, but youd need to make the strength of your offer the focus point, hope they haven't really got another buyer and make it clear early on that you are prepared to go higher. As I said, a futile position to put yourself in.

An alternative tactic might be to go into the agency and talk to them, tell them youd like to make an offer for the property, then tell them about yourself/your position so they understand you are in a strong position. Ask questions you already know the answers to, "wasn't the property withdrawn from the market last year? why was that?" "so why are they moving?" "oh right, so I imagine they are pretty keen to get moving asap...." ie put them on the hook of saying the vendor wants a quick sale

Then tell them how much you like the property but there are one or two minor things youd like to alter (be specific) and that based on your research of the market you think a fair price would be X amount. (if it were me, Id probably go 161, maybe 162 (given the strength of your position and the likely speed they want to move - if that were different Id go closer to their asking price)

If the agent asks is that your maximum, be vague and non committal, don't be offended he is doing his best for his vendor who is paying his bill.

Hopefully it gets accepted after a short wait, they may reject it, if that happens, simply insist the agent comes back with a counter offer from them, reminding him of those faults you mentioned or work that needs doing . You know you will go up to the asking price, but he/they don't ,so you may save yourself a few quid, if not, try not to get into a pi**ing competition where egos start to get involved and people start to get offended and draw lines from which they wont budge and that's when the deal starts to fall apart. Far better to keep the deal alive by making positive suggestions about agreeing to get the work done but they pay or sharing the cost or over the carpets and curtains. Anything to keep the deal alive.

Ultimately the property is only worth what the highest bidder is willing to pay, if they start to get too greedy then its no longer the right property



Im not sure how much the above helps, if at all, as every negotiation/house sale is different and a few details here are slim evidence to try and advise you from

Good luck