Advice on bidding on house with multiple offers already..

stickman22

Hi, we went to view a house yesterday, we like the house & it is the best we'll get in our area with our budget. While we were there 2 offers were made current price 227k (asking price was 210k). We are not sure how to proceed, we are in the middle of the mortgage application at the moment however we have been given a sanction in principle letter & the max value house we can bid on is 236k. We are clueless have never put a bid on a house before, do we say 228? We don't want to get into a bidding war but we want the house.. What is the smart way to proceed? My wife is worried it's already gone sale agreed seeing as there was so much interest

davo10

stickman22 wrote: »

Hi, we went to view a house yesterday, we like the house & it is the best we'll get in our area with our budget. While we were there 2 offers were made current price 227k (asking price was 210k). We are not sure how to proceed, we are in the middle of the mortgage application at the moment however we have been given a sanction in principle letter & the max value house we can bid on is 236k. We are clueless have never put a bid on a house before, do we say 228? We don't want to get into a bidding war but we want the house.. What is the smart way to proceed? My wife is worried it's already gone sale agreed seeing as there was so much interest

If 2 offers were made "while you were there", €236 is not going to do it and as you don't even have mortgage approval you will be behind cash buyers and those that do have approval.

maximum12

stickman22 wrote: »

We are clueless have never put a bid on a house before, do we say 228?

yeah that's all there is to it really.

As you're already close to your budget just go up in 1k increments.

stickman22

Thanks, we were just surprised that it jumped up from 210 to 227k, we are thinking maybe the offers made at 227 may not be mortgaged approved either & that it might just be hiking up the asking price? When do we make an offer, do we bide our time for a couple of days & let the bidding die down or do we put the offer in tomorrow morning?

Atlantic Dawn

How long is the house for sale? If it's on the market months the odds that 2 bids came in while you were viewing would be similar to me winning the Euro Millions and The Lotto next week.

stickman22

It went on the market Wednesday, viewings Friday & Saturday

Water John

The asking or value price may have been low to attract wider interest. Strange if 2 bid the same offer. It would normally go up by 5,2 or 1K on each bid.
How did it get to that in 2 days. EA would need to give a plausible story.
If you are bidding and believe his/her story your bid should be 228K considering your limit.

stickman22

It had been showing on Friday, when we went to view the EA said current offer 214k, when we were leaving she said 2 other couples who were also viewing had bid & offer stood at 224, I rang her mobile that evening to express an interest & she said the offer was now 227, similar properties in the area would usually go for beteen 215-220k...

Sleeper12

Usually with several bids the estate agent suggests final bids in an envelope by a certain date.

stickman22

Ok, so we have time to put in an offer so. Also the bank said we can look at properties max value 236k (that is including deposit) we would also have an additional 20k savings left after that but we really don't want to have to dig into them. What is the best way to proceed now, should we bid or hold off a few days?

Water John

Haven't come across that, Sleeper. Towards the end of bidding usually only 2/3 bidders in it. The EA would then close it out between them, over 2 days.
Maybe since their is very little in the commission on a few K some EA's do that. Not in my area and i would see it as poor form and not fulfilling their job.
Thought bank would only say the max loan they would give you, based on your income. don't think your own extra funds has any thing to do with them.

davo10

Sleeper12 wrote: »

Usually with several bids the estate agent suggests final bids in an envelope by a certain date.

Not 2 days after the house went on the market.

ThisRegard

stickman22 wrote: »

Thanks, we were just surprised that it jumped up from 210 to 227k, we are thinking maybe the offers made at 227 may not be mortgaged approved either & that it might just be hiking up the asking price? When do we make an offer, do we bide our time for a couple of days & let the bidding die down or do we put the offer in tomorrow morning?

The estate agent would likely not take into account the bids for which there's no evidence of funds or mortgage approval.

davo10

stickman22 wrote: »

Ok, so we have time to put in an offer so. Also the bank said we can look at properties max value 236k (that is including deposit) we would also have an additional 20k savings left after that but we really don't want to have to dig into them. What is the best way to proceed now, should we bid or hold off a few days?

Write this one off op, 2 offers were placed at viewing 2 days after it went on the market, top bid is only a few k under your max, this one is not for you. Keep looking.

stickman22

Davo we would have an additional 20k in savings which we could dig into, we really don't want to though...

athtrasna

stickman22 wrote: »

Davo we would have an additional 20k in savings which we could dig into, we really don't want to though...

Do you want the house?

stickman22

Ath trasna yes we want it, originally it was an area we wouldn't have considered but the areas where we want are way out of our budget, it is the best we can get without having to downsize to a 2 bed so yes we want it & want to bid smartly but we havn't a clue as how to proceed safely & not getting into a bidding war...

Walter2016

As above, write it off. 10% jump in value is not warranted.

There will be others - just as good and possibly better.

Remember this is the biggest purchase of your life and you need to separate feelings from reality.

Think what type of holidays and extras 20k would get you!

Walter2016

Also check www.propertypriceregister.ie and find out what has sold in the same area and the precise price.

It can also give an idea of how many properties in the area comes onto the market.

Water John

Agree with Athrasna, you bid what the house is worth to you. Yes, I know you'd like to get the house and keep your 20K but that may not be the choice.

GeorgeOrwell

I think it's best to let this one go and look at other places.

Remember:
1. Stamp duty is an additional 1% of the price you pay
2. There'll be legal fees

You're immediately looking at paying an additional €5,000 (ish) on top of the price you pay.

Then there are moving costs and the inevitable repairs and unexpected purchases.

So, be careful about going to your absolute maximum.

Sleepy

If you're prepared to pay 236k for the house, I'd bid that as a first and final offer. A 9k increment may put off the other buyers if they're near the top of their approval at that level and it's a specific enough figure that it telegraphs the "final" part of that statement.. It may not be enough, but I'd say it's your best chance of scaring them off and avoiding a bidding war. Entering the fray with a 1k increment is unlikely to work when your max budget is so close to the current price imo.

Make sure the house is actually worth that much to you though!

maximum12

Sleepy wrote: »

If you're prepared to pay 236k for the house, I'd bid that as a first and final offer. A 9k increment may put off the other buyers if they're near the top of their approval at that level and it's a specific enough figure that it telegraphs the "final" part of that statement.. It may not be enough, but I'd say it's your best chance of scaring them off and avoiding a bidding war. Entering the fray with a 1k increment is unlikely to work when your max budget is so close to the current price imo.

Make sure the house is actually worth that much to you though!

Never say final offer. All you're doing is sharing information and reducing your options.

Sleepy

But they'd be sharing the right information if it's the maximum they're prepared to pay.

riclad

Say you are willing to pay 236k ,and can afford to pay that .
Theres no harm in saying ,this is my final offer .
it may be accepted , you have nothing to lose .
if someone bids 240k ,well at least you tried .

SarahMollie

People way over think bidding. Theres no amount of thinking about it thats going to guarantee you success if it turns out that someone who also wants it happens to have a bigger budget.

You can bid or not bid. If you bid and don't get it, then are you really any worse off? At least then you know you've tried. To state the obvious, if you don't bid then you definitely won't get it. I don't understand the logic of posters here telling you to leave it without even trying. You can keep viewing other houses until you know more anyway so you won't loose out.

If you want to be tactical, the only thing that stands out to me as a possible tactic is to go in at €236k in a kind of "going for broke" approach. Theory behind this aproach is that its a big jump is a serious statement of intent (which the vendor and EA will like) and also hopefully a suckerpunch to the other bidders. I know when I was looking someone did this to me and it stopped me in my tracks.

I get that you don't want to spend more than you need to but by the sounds of things, a house thats attracting lots of bids in just a few days is probably worth it. Also, if you try and save yourself a few €k by trying to be cute with small bids, and end up losing out on the house, will that cost you more in rent etc in the long run?

riclad

are You borrowing 210k ?
The seller might look at bidders in terms of how much you are borrowing.
vs joe bloggs who may offer 225k but is not borrowing any money.
or is just borrowing 80k.

Paddytheman

riclad wrote: »

are You borrowing 210k ?
The seller might look at bidders in terms of how much you are borrowing.
vs joe bloggs who may offer 225k but is not borrowing any money.
or is just borrowing 80k.

How does what your borrowing affect the buyers decision if your offering to pay them X amount? Seen this mentioned before but dont understand..

GeorgeOrwell

Paddytheman wrote: »

How does what your borrowing affect the buyers decision if your offering to pay them X amount? Seen this mentioned before but dont understand..

Someone who is borrowing a greater percentage of the price of the house might be considered by the vendor to be a bigger risk.

Say the house is on the market for €300k.

Person A has €290,000 in the bank from the sale of their current home. They can transfer all of it into your bank account tomorrow.

Person B has €50,000 in the bank and mortgage approval up to €250,000.

Many vendors would go with person A even though they are giving you a smaller amount of money - there's much less risk of something going wrong and making the sale fall through. A cash buyer will almost always beat a buyer with a mortgage.

riclad

Banks make mistakes ,they lose documents etc which can delay a sale going through.

stickman22

I think the posters who said to let this house go are right, our mortgage application is still going through & the house has risen to 239 which is above what we are willing to pay, our max is 237... hopefully something else suitable comes onto the market that we can afford..

Alkers

If there are multiple other bidders, our approach was always to bid +1,000 and then to cal the estate agent every few days for an update. If the bidding went above what we were willing to pay, we would pull out. If other bidders dropped out and there was only us and another party or two, only then would be actually put another bid on. The agent will call everyone who's put in an offer on the house before going sale agreed.

Water John

You are correct. By bidding +1K, you are being very sticky and other bidders come to the conclusion that they cannot shake you off and don't know your limit.

whiskeyman

Water John wrote: »

You are correct. By bidding +1K, you are being very sticky and other bidders come to the conclusion that they cannot shake you off and don't know your limit.

But sometimes I feel that you may draw the other bidders to push themselves as they don't want to lose the house for 1k or so, thus making a tight bidding war that could go on and on.
Psychologically, would it not be best to 'blow them out' by going in high?

At the end of the day, it's going to come down to whoever has the max limit anyway, isn't it? It's just a case of who and when they'll bow out sooner.

GeorgeOrwell

whiskeyman wrote: »

Psychologically, would it not be best to 'blow them out' by going in high?

Go €1k above the next €10k threshold. Eg. if the current bid is €316k and is going up by €1k increments, blow them out the water by offering €321k and telling the agent it is your final offer - your rival bidders might have an absolute max of €320 and it would signal your determination to get the house.

Be careful, however. You can always walk away from a house if the bidding becomes silly.

NEVER get into a bidding war which goes beyond your maximum. There will always be other houses.

whiskeyman

GeorgeOrwell wrote: »

and telling the agent it is your final offer.

Is that ever wise though?
Even if it's genuinely your last offer, what if they push their limit to just go +1k on yours?
Would the EA tell the other bidders 'look, another 1k above that will get it for you' to others?

I guess I'm just sick of trying to understand the best strategy to bid.
Some have said 'go up in +1ks'.
Others say 'bid your max, and leave at that'.

I've been in 3 bidding wars where things 'got silly', but at the end of the day, there's 3 new home owners probably settling in, and I'm still stuck looking... with property prices where I'm looking going up nearly 10% PA.
There may be other houses, but there seems to be too many other bidders!

SarahMollie

whiskeyman wrote: »

Is that ever wise though?
Even if it's genuinely your last offer, what if they push their limit to just go +1k on yours?
Would the EA tell the other bidders 'look, another 1k above that will get it for you' to others?

I guess I'm just sick of trying to understand the best strategy to bid.
Some have said 'go up in +1ks'.
Others say 'bid your max, and leave at that'.

I've been in 3 bidding wars where things 'got silly', but at the end of the day, there's 3 new home owners probably settling in, and I'm still stuck looking... with property prices where I'm looking going up nearly 10% PA.

Exactly - if someone wants it more than you and has more money than you, then you can't avoid a bidding war or ensure that you'll get the property.

Personally having bid on more properties already that I wished to ever bid on in a lifetime, heres my two cents. Tactically, I think going up by €1k is weak and only invites other bidders to keep upping their offers as psychologically its a small amount each time.

Going for the knock out punch may or may not work, but if you really want a property, its worth a try. Pushing up by €5-10k in a single jump is a serious statement of intent. It would likely put off some less seasoned bidders. And if the house is worth that amount to you, then what harm. As Whiskeyman hints at above, theres a cost to waiting around anyway, with prices rising and continuing to pay rent etc.

If you end up losing this way, then you always would have lost, so you're no worse off.

asteroids over berlin

When we were bidding, we were up against 4 people, we increased bids by 10k, first time didn't work, 2nd time it did, whether people were at their limit we do not know, did we pay more that we had to, don't know but we got the house within our budget etc. Waiting around for 1k bids just draws out the process and may add a good month,if not more onto the final outcome. I am all for blowing people out of the water!

Alkers

asteroids over berlin wrote: »

When we were bidding, we were up against 4 people, we increased bids by 10k, first time didn't work, 2nd time it did, whether people were at their limit we do not know, did we pay more that we had to, don't know but we got the house within our budget etc. Waiting around for 1k bids just draws out the process and may add a good month,if not more onto the final outcome. I am all for blowing people out of the water!

But if there are multiple bidders, the effect of a 10k bid are massively diluted. At least with two bidders, the other party will see the massive increase.

Suaimhneach

What happened?

stickman22

Sale agreed on 241, however we have had some luck with the banks, went to one institiution who offered us 3.5 times our salary plus our deposit meant we would have just enough for a house in a new development in our area, we put a booking deposit down, we love the estate & the area & do not want to enter any bidding wars/paying over & above for a house that not necessarily be worth it out of desperation.
We are waiting to get our letter of offer, mortgage approval with underwriters at the moment but the mortgage advisor told us put down the deposit on newbuild & promised us she would get us the max amount, not sure exactly how much power she has but the house won't be ready for another 7 months so we have time to get more cash together. We didn't want to use all our deposit but this home is A3 & all others we looked at were D/E so we figured we would be spending alot on diy anyway so we may as well get the home we want & love & do it our way from the start... Fingers crossed we get the approval now (the deposit is fully refundable)

MHickman

Had a similar experience attempting to buy recently with the OH in South Dublin. We're going to rent for another while as the stress was getting too much. Delighted thinks worked out for you in the end.

ted1

asteroids over berlin wrote: »

When we were bidding, we were up against 4 people, we increased bids by 10k,


Waiting around for 1k bids just draws out the process and may add a good month,if not more onto the final outcome. I am all for blowing people out of the water!

Do you make more than 30k a month?
10k +PRSI+USC+PAYE+mortgage interest , etc
I can never understand the need to blow other people out of the water, especially if it's to your own detriment

Water John

Delighted for you, Stickman. With A3, your heating bill will be very low.

stickman22

Thanks guys, we were deflated & friends had a similar experience with a house 50s E rated house that went finished 35k over the asking price, we just didn't want to have our vision skewed & place more value on a house than it was worth.
We are praying we get the amount required as it is the very max the bank can give us but then we should qualify for this first time buyers grant as it is a new build under 350k so that will give us a bit of extra capital... As I said we decided to take an all or nothing approach but we figured we will be saving so much in utilites etc it will be worth it.
This thread has been a great support.

mickdw

Now all you have to worry about is the developer trying to give your deposit back in 6 months time for some made up reason when the real reason is that he can resell the house for 40k more.

stickman22

Yikes don't say that!! It's going to be a big development & phases are being released slowly, however your are right in what you say technically as the exact same house in the previous phase were all on the market for 20k less & I can imagine the phase following ours will be another 20k more than hours...