Bidding strategy

Theboinkmaster

House in scd asking 490k and I think it's worth 525k

No bids yet and I think will go quick and above asking, probably lots of interest.

Ring agent, offer 525k and tell them that's my only offer and expires in 1 week as bidding on other houses.

What you think? Rather than going in at say 470k and getting into bidding war and price creeping up 1k at a time, getting others tied in and ending above 525k, but this way just blowing away potential other bidders?

Gmol

If you think it's worth it and the competition is going to be intense, it's worth a high bid. Do put a rider that your bid is valid for a limited time and be prepared to walk away. Best of luck anyways.

TheDriver

Start low, offering 525 creates greed and can be thought of as first offer.

Theboinkmaster

TheDriver wrote: »

Start low, offering 525 creates greed and can be thought of as first offer.

But if you say it's your only offer and only lasts a week?

etymon

Defo put a time on it!

WittyName1

If you go straight in with 525k why would they sell it to you? Surely it will make the estate agent think "jeez...this house is popular if that's the first bid...I wonder how much more we can get".
An estate agent would be mad to accept a first bid without testing out the market first.

by the seaside

I've never understood this expiring offer business. Does it work? It seems unlikely to me that someone who is up for it on day 7, won't in reality be interested on day 8.

My motto is that if you're not embarrassed by an offer, it's too high, but perhaps that doesn't work in this market in SCD.

spaceHopper

No that won't work and if you see another house with the same ea he knows your budget. Offer much less so that you are in the game if any other offers come in you'll be told then let them duke it out for a while and then come in from the side with a better offer

Ps have you got mortgage approval

ted1

Theboinkmaster wrote: »

House in scd asking 490k and I think it's worth 525k

No bids yet and I think will go quick and above asking, probably lots of interest.

Ring agent, offer 525k and tell them that's my only offer and expires in 1 week as bidding on other houses.

What you think? Rather than going in at say 470k and getting into bidding war and price creeping up 1k at a time, getting others tied in and ending above 525k, but this way just blowing away potential other bidders?

If it blows others away then your offering too much.

jon1981

In a popular area with demand it will work against you. Most houses in nice areas of SCD are going for over asking, you'll say 525k and it lasts for a week, what next when the next bidder comes in at 526k? Will you swallow your pride and bid again or walk away?

start low and see what happens.

ps. i dont think the seller will be shaking or their boots thinking hey better accept because there is a week expiry, plenty of buyers out there!!

Kinet1c

I'd go in at 450 and prepare for (a) to be rejected (b) a bidding war or (c) acceptance.

Wtf would you be doing adding 35k to the asking for? Have you calculated how much extra your repayments will be each month? Or the total interest added because of that 35k over the term of the mortgage?

Theboinkmaster

Thanks all. Was a hypothetical but am looking to buy in scd so wanted to get strategy ready when house did come up. Only checking that strategy as someone was telling me about it but my first instinct is to go in low and bid up.

davo10

Time limit is a complete waste of time, in fact once you do that, the EA will think you are clueless.

I've bought and sold enough property to know there is no perfect strategy as there are too many variables like whether the owner wants it needs to sell, whether seller wants a quick sale or is happy to wait a year to get the right price, how many people are interested in the property, whether they are experienced or first time bidders etc, etc.

I would suggest a couple of things though,

• get mortgage approval, this more than anything else will dictate how much you can bid.
• set yourself a price above which you will not bid no matter what, and stick to it. Remember you will have to spend a considerable amount of money renovating and kitting out the house to your satisfaction.
• factor in additional expenses like solicitors etc.
• try and find out as much as you can about the seller, are they buying another house (just ask the EA why they are selling)
• don't go in at the limit of what you can afford, it gives you no wriggle room.
• start off 25-30 below what you can afford then go up in 5-10s, not 1s.
• prepare to walk away if you reach your limit or your gut tells you that something isn't right eg the EA is a bit dodgy.
• do not put a time limit on your bid, it's amateurish and shreds your credibility if you don't stick to it, no seller on earth will sell a house at a certain price just because a bidder said the bid is only good for a week, another bidder will be along tomorrow.

Supercell

Let me tell you this.
Back in late 2011 near the lowest time of prices when most could see no end to price drops I put an offer on a house at the asking on the first day of viewing.
I loved the place. It was in a great area, it was near town and beside a nice park for the kiddies to go mental in.
I was the only one viewing the place on opening day.
They rejected my offer.
I shortly after put another bid in a second house (which i currently own) below the asking and that was accepted.
My first choice place ended up selling for less than my first day offer.

Now I don't know if times are crazy now, but it seems to me that offering over the asking on day one is like asking to be fleeced.

April 73

Be the first bidder & start low - that way you put a bottom level on the price. Yes, you may end up in a bidding war but you may do so even if you offer the asking price first off. Don't offer the asking & don't let anyone else offer the asking price. The market always dictates where a house ends up.

In the example you have given, if you offered €470k & the price eventually gets to €500k then psychologically the vendor feels they've gotten an extra €30k.

No vendor will accept an asking price when the house first hits the market. The EA will advise them to get the initial flurry of lookers in first to see where the bidding might go.

Have your mortgage approval ready - then you look like a serious bidder. Set a limit & be prepared to walk if it goes too high.