Bank Sale Bidding War

MuddyDog

Myself and the OH put a bid down on a house in early January. It's a bank sale. The offer was for 10k more than the asking. We were then told by the EA that someone had bid 5k more than us so we countered with 5k more again. After about 2 weeks from the initial bid the EA told us she'd sent our offer to the Bank and she said they should accept it as it's 20k more than the list price. That was around the 20th January. Yesterday, the EA rang us to tell us that the bank had still to get back to her about acceptance and in the meantime someone else has bid 20k more than our bid. I find it strange that the Bank would still not have accepted our offer and also that someone bid 20k more than our previous bid. It just seems odd that someone would increase it by that much in one go. EA playing funny buggers or genuine?

Butters1979

Bank sales seem to put the asking price quite low as they want a fast sale, this can attract a lot of interest and if people really like the house can generate bids way above asking price. You could be up against someone with a lot of cash in their pocket who really like the house.

Asking price means nothing, all that matters is what people involved are willing (and able) to pay for it. You have to ask yourself what you think it's worth and what you can afford then know when you're out of the game.

When you say 'strange', this comes up a lot on here. I don't think the EA's generate phantom bids as much as some people think, especially as if it's a bank as the EA's customer then their customer is not as emotionally and financially invested in the end sale price. Why would the bank accept your offer is someone has offered more?

Is there similar properties in the area that have sold recently you can compare to?

Michael D Not Higgins

I think the approval of bank sales happens once a month within the banks so it's possible that the timelines match up. Can't really say on the other bidder. It depends on the value of the house and how much it's worth to someone. It's more likely to be genuine as the EA isn't dealing with a private vendor with notions about the house value.

MuddyDog

Butters1979 wrote: »

Bank sales seem to put the asking price quite low as they want a fast sale, this can attract a lot of interest and if people really like the house can generate bids way above asking price. You could be up against someone with a lot of cash in their pocket who really like the house.

Asking price means nothing, all that matters is what people involved are willing (and able) to pay for it. You have to ask yourself what you think it's worth and what you can afford then know when you're out of the game.

When you say 'strange', this comes up a lot on here. I don't think the EA's generate phantom bids as much as some people think, especially as if it's a bank as the EA's customer then their customer is not as emotionally and financially invested in the end sale price. Why would the bank accept your offer is someone has offered more?

Is there similar properties in the area that have sold recently you can compare to?

Other properties in the area sold for within 5k of what we offered. In fact, some nicer and slightly bigger properties sold very close to it in the past few months for the same price as our bid. We got the house valued and the valuation is just under what we've bid. I think owing to what I just said, it makes me feel like it's potentially not genuine but perhaps I'm just angry that we've been outbid! I told the EA that we'll be withdrawing our bid on Monday week if there hasn't been any progress anyway. What would happen if the bank accepted our offer today? The EA told me she had not sent the biggest bid to the bank.

davo10

Buying from a bank is a real pain in the rear end. It can take months for a decision and even longer for the purchase to go through. The decision seems to have to be made at head office rather than the local branch and as they have no idea of what the local market is, head office seems to think that the bid seems cheap by comparison to Dublin prices so they hold off for more bids. Also, banks don't need to sell in a hurry so they often move very slowly on property deals. As stated above, my experience is that the properties are offered at a low price to entice bidders.

I'm interested by the posts here and on other threads about bidders "getting the house valued", what does this mean exactly and who "values" it?. A property is worth the maximum someone is willing to pay for it, therefore if someone is willing to pay €20k more than you, that is what the house is worth.

Quandary

We are currently sale agreed on a property being sold by a receiver on behalf of a bank.

The asking was 395k. We opened the bidding 3 months ago with a bid of 350k. We are now sale agreed with a bid of 447k The house was priced low and the bidding was quite aggressive and invloved a lot of interested parties.

Asking price means nothing really at the end of the day.

TheShow

davo10 wrote: »

I'm interested by the posts here and on other threads about bidders "getting the house valued", what does this mean exactly and who "values" it?. A property is worth the maximum someone is willing to pay for it, therefore if someone is willing to pay €20k more than you, that is what the house is worth.

A professional valuer will give his written opinion on the market value of the property after inspecting the property and reviewing the recent sales in the area for similar type properties. This could be above or below the asking price or current offer on a property.
To say a house is worth what someone pays for it is not entirely true, and we've seen plenty of evidence of this. The recent property crash stands out as a prime example.

It would only sensible to pay above market value if you are going to do something that will add to the market value of the property so your investment appreciates above the combined purchase price and refurb cost.
If you're purchasing by way of mortgage, the lender will require a valuation report for the property as part of the TACOS for the mortgage, so no harm in getting one done in advance if you're serious about the property.