Full & Final Bids or 'Sealed Bids'

Conrad83

I have been bidding on a property for approx 9 weeks, for approx 7 weeks there was only 2 of us bidding and now the EA & vendor have requested our full and final bids or 'sealed bids' as they have called them.

At the point the EA suggested going down the route of sealed bids the other bidder had just bid above me (or so the EA says) and when the EA advised him that the next step may be a request for sealed bids he apparently withdrew his bid (which was only €500) and said he will wait and see how things pan out, so now as it stands my bid is the highest.

My question is is there any drawbacks to proceeding at this stage and pushing on with full and final bids? It seems to have scared the other party off and just wondering am I missing something, of course the EA could have invented the last bid for all I know as there was a period of a week and a half afer Christmas where the other bidder was nowehere to be found and not returning any of the EA calls (he has done this a few times in the bidding process, game playing perhaps).

Another thing to note is that only now has the EA asked me for proof of mortgage approval even though I have been bidding so long, do EA's not usually request proof in the early stages rather than the final stages?

JohnFalstaff

Sounds like a nightmare to be honest. If your bid is the highest what point is there in going in with another full and final bid - would you not just be bidding against yourself?

Tell the EA that your current offer is your final offer and that after a week you will withdraw the bid and move on.

There is also the chance that if the other bidder actually exists, their mortgage wasn't fully approved and they had to withdraw - hence the EA only now asking you for proof of mortgage approval. If the EA is insisting on proof have the bank draw up a letter that indicates mortgage approval for the amount you have already bid, not a higher amount.
Good luck!

kippy

Conrad83 wrote: »

I have been bidding on a property for approx 9 weeks, for approx 7 weeks there was only 2 of us bidding and now the EA & vendor have requested our full and final bids or 'sealed bids' as they have called them.

At the point the EA suggested going down the route of sealed bids the other bidder had just bid above me (or so the EA says) and when the EA advised him that the next step may be a request for sealed bids he apparently withdrew his bid (which was only €500) and said he will wait and see how things pan out, so now as it stands my bid is the highest.

My question is is there any drawbacks to proceeding at this stage and pushing on with full and final bids? It seems to have scared the other party off and just wondering am I missing something, of course the EA could have invented the last bid for all I know as there was a period of a week and a half afer Christmas where the other bidder was nowehere to be found and not returning any of the EA calls (he has done this a few times in the bidding process, game playing perhaps).

Another thing to note is that only now has the EA asked me for proof of mortgage approval even though I have been bidding so long, do EA's not usually request proof in the early stages rather than the final stages?

The EA should have asked for proof of AIP before he accepted a bid from either party - what's the point otherwise?

I'd agree with JohnFalStaff the remainder of the advice.

Conrad83

JohnFalstaff wrote: »

Sounds like a nightmare to be honest. If your bid is the highest what point is there in going in with another full and final bid - would you not just be bidding against yourself?

Tell the EA that your current offer is your final offer and that after a week you will withdraw the bid and move on.

There is also the chance that if the other bidder actually exists, their mortgage wasn't fully approved and they had to withdraw - hence the EA only now asking you for proof of mortgage approval. If the EA is insisting on proof have the bank draw up a letter that indicates mortgage approval for the amount you have already bid, not a higher amount.
Good luck!

It has been a nightmare from start to finish but I am hoping it will all be worth it, if not well I will have learnt something I guess!

Well the EA doesn't know that my last bid was actually my final bid and that I have no more to bid! It is so hard to trust them and I am not sure if I believe his story about the other bidder making a bid above mine last week and then withdrawing when he thought it may go to full and final bids, he had only bid €500 above me, not as if he had bid €5k.

In regards to the bank letter I am mortgage approved for about 80% and the remainder is cash savings so I will tell the EA that it's part cash and part mortgage approval.

Conrad83

kippy wrote: »

The EA should have asked for proof of AIP before he accepted a bid from either party - what's the point otherwise?

I'd agree with JohnFalStaff the remainder of the advice.

Would think the same myself but he hasn't once asked me if I am mortgage approved, unless he knows he has a buyer in the other bidder, I could guess all day long!

ted1

If the other bidder is a messer and avoiding calls etc, there's a high probability any sale that is agreed will fall through. If i was selling I'd have no time for messers and wouldn't entertain them

listermint

ted1 wrote: »

If the other bidder is a messer and avoiding calls etc, there's a high probability any sale that is agreed will fall through. If i was selling I'd have no time for messers and wouldn't entertain them

Could be the owner pressing for more tbf. EA can't move without their say so.

Conrad83

listermint wrote: »

Could be the owner pressing for more tbf. EA can't move without their say so.

This is possible but the EA did tell me €30k ago that the seller was happy with the price, it just continued on between the 2 of us for so long as we were making €500 bids and it is only now at market value. The EA had put it on thr market at a ridiculously low price in the first place.

Zulu

Consider entering your "sealed bid" as the very first one you made pre the other bidder.
If they've been scared off, you've just made a saving.
If they are still in the game, and already know your current bid (which is your maximum) they can only outbid you, so you're sunk eitherway.

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tayto lover

Did another bidder exist at all?
Have you already been bidding against yourself?

Conrad83

Zulu wrote: »

Consider entering your "sealed bid" as the very first one you made pre the other bidder.
If they've been scared off, you've just made a saving.
If they are still in the game, and already know your current bid (which is your maximum) they can only outbid you, so you're sunk eitherway.

This is what I plan on doing, my final bid was my final bid I just didn't have the opportunity to tell the EA this before it went to sealed bids.

It could also be possible that the other guy is gone and didn't make another bid like the EA said he did and he is just trying to squeeze more out of me!

listermint

tayto lover wrote: »

Did another bidder exist at all?
Have you already been bidding against yourself?

This could also be the case.

Conrad83

tayto lover wrote: »

Did another bidder exist at all?
Have you already been bidding against yourself?

How will I ever find this out? The other bidder made a bid just before Christmas, I then went back with another bid 48 hours later, all the bids have been made in 1/2 days. Then I heard nothing for over a week after Christmas, EA not returning my calls/emails etc, when I finally spoke with him he advised the other bidder was 'away', then next time I spoke with him 9 days after my last bid he had just 30 mins previously received a bid from other bidder €500 above mine.

I do suspect that the other bidder made their last bid before Christmas and nothing has been heard since and that is why only now it is going to full and final, sounds shady but how can you ever know in these situations? As it has been just myself and this other bidder since mid November I would think/hope the EA hasn't been inventing bids this long!!!

tayto lover

Conrad83 wrote: »

How will I ever find this out? The other bidder made a bid just before Christmas, I then went back with another bid 48 hours later, all the bids have been made in 1/2 days. Then I heard nothing for over a week after Christmas, EA not returning my calls/emails etc, when I finally spoke with him he advised the other bidder was 'away', then next time I spoke with him 9 days after my last bid he had just 30 mins previously received a bid from other bidder €500 above mine.

I do suspect that the other bidder made their last bid before Christmas and nothing has been heard since and that is why only now it is going to full and final, sounds shady but how can you ever know in these situations? As it has been just myself and this other bidder since mid November I would think/hope the EA hasn't been inventing bids this long!!!

I don't know how you'd prove if the EA was doing shady dealings BUT it wouldn't surprise me in the least. I wouldn't trust them as far as i'd throw them.

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listermint

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They are legally required to record each bid now - but I dont know how you could access that information.

Yes that part always alluded me.

tayto lover

listermint wrote: »

Yes that part always alluded me.

How does a bidder know if a second bidder exists at all?
Surely he is entitled to know some details so that he is clear in his mind that he is not bidding against himself. He has to have some protection.

What's to stop an AE claiming that he has a telephone bid from a Mr.John Smith in London, who may not exist at all?

I would like to see the regulations around the subject.

Askthe EA

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listermint wrote: »

Yes that part always alluded me.

tayto lover wrote: »

How does a bidder know if a second bidder exists at all?
Surely he is entitled to know some details so that he is clear in his mind that he is not bidding against himself. He has to have some protection.

What's to stop an AE claiming that he has a telephone bid from a Mr.John Smith in London, who may not exist at all?

I would like to see the regulations around the subject.

Every bid must be recorded by both soft copy and hard copy and kept for (6 years, I think). You are not entitled to see them but if you have concerns you may contact the PSRA who can demand to see the files and can contact the bidders to confirm their validity. The PSRA have recently begun spot checking EAs throughout the country for compliance.

Look, Ive said it here before and I'll say it again. There are very, very few EAs who will risk their license and by extension career by creating phantom bidders. It just doesn't happen in the 3 EA I have worked in and certainly not in a reputable office. A small guy on his own might be tempted I guess.

Look at it like this.... If a property is selling for 200k the fee is likely to be between €2k and €3k (1 - 1.5%). That fee goes to the office and depending on his salary agreements the agent will see a percentage of this only.

Am I going to risk my career to create a phantom bidder? Lets look at it and see. Lets say the sales fee is 1.5%. I make 20% commission and create a phantom bidder of €20K above the legitimate bid. 1.5% of €20k = €300. 20% of this is €60 Thats €60 before tax.

No, no I am not going to risk my career for €35

Conrad83

Askthe EA wrote: »

Every bid must be recorded by both soft copy and hard copy and kept for (6 years, I think). You are not entitled to see them but if you have concerns you may contact the PSRA who can demand to see the files and can contact the bidders to confirm their validity. The PSRA have recently begun spot checking EAs throughout the country for compliance.

Look, Ive said it here before and I'll say it again. There are very, very few EAs who will risk their license and by extension career by creating phantom bidders. It just doesn't happen in the 3 EA I have worked in and certainly not in a reputable office. A small guy on his own might be tempted I guess.

Look at it like this.... If a property is selling for 200k the fee is likely to be between €2k and €3k (1 - 1.5%). That fee goes to the office and depending on his salary agreements the agent will see a percentage of this only.

Am I going to risk my career to create a phantom bidder? Lets look at it and see. Lets say the sales fee is 1.5%. I make 20% commission and create a phantom bidder of €20K above the legitimate bid. 1.5% of €20k = €300. 20% of this is €60 Thats €60 before tax.

No, no I am not going to risk my career for €35

Thanks for that, seems pointless when you say it like that that an EA would invent bids although I do believe the most recent bid in my case may have been invented as I find it odd how the other party would 'withdraw' his latest bid of €500 (higher than mine) to 'wait and see how things would pan out and if bidding would continue or it was final bids were going to be requested'. Not sure why someone who was bidding on a property with 1 other person for almost 2 months would withdraw his bid at this stage, yet the EA tells me he is still in it, I suspect the EA is saying this to me to squeeze more money out of me or maybe as a previous poster said the other party doesn't or can't provide evidence of funds, all speculation but only time will tell I'm sure.

Askthe EA

Conrad83 wrote: »

Thanks for that, seems pointless when you say it like that that an EA would invent bids although I do believe the most recent bid in my case may have been invented as I find it odd how the other party would 'withdraw' his latest bid of €500 (higher than mine) to 'wait and see how things would pan out and if bidding would continue or it was final bids were going to be requested'. Not sure why someone who was bidding on a property with 1 other person for almost 2 months would withdraw his bid at this stage, yet the EA tells me he is still in it, I suspect the EA is saying this to me to squeeze more money out of me or maybe as a previous poster said the other party doesn't or can't provide evidence of funds, all speculation but only time will tell I'm sure.

Who knows. People are weird. ;-) Also, of course the EA could be acting the maggot.

April 73

It's not always done to get a couple of quid extra on the commission.
I think it's sometimes part of getting people to bid up to a price at which the seller will commit to selling.
The EA sometimes has a job to do to persuade reluctant sellers who want a certain price to commit to the sale.
The EA doesn't get paid at all without matching a willing buyer to a willing seller at a mutually agreeable price.

athtrasna

Back in the last boom we were in a similar situation. It was then I realised (at 200k over the asking price) that this vendor was out for every last cent and would be the type to take every light bulb with her. So we pulled out.

Found out afterwards that the EA never told the other party, they bid 70K over our previous bid, with no other bidder. So €69,999.99 more than they needed to. Pretty sure they're still in negative equity if they haven't lost the house by now.

the_syco

Conrad83 wrote: »

This is possible but the EA did tell me €30k ago that the seller was happy with the price, it just continued on between the 2 of us for so long as we were making €500 bids and it is only now at market value. The EA had put it on thr market at a ridiculously low price in the first place.

€30k ago in €500 increments? I doubt the other guy exists, and the EA is doing a fabulous job of squeezing every euro out of you until you can't go any higher (and thus the other guy magically pulled out when you wouldn't).

Conrad83

the_syco wrote: »

€30k ago in €500 increments? I doubt the other guy exists, and the EA is doing a fabulous job of squeezing every euro out of you until you can't go any higher (and thus the other guy magically pulled out when you wouldn't).

The other guy is apparently still in it according to the EA. So hard to know what to do, so much at stake! Sorry typo, €20k ago the seller was happy with the price.

Considering now calling his bluff and offering 5k or so less than my last bid (current highest) this is a big gamble of course and would depend on when the other guy really did pull out, if he has at all!

Conrad83

Conrad83 wrote: »

This is possible but the EA did tell me €30k ago that the seller was happy with the price, it just continued on between the 2 of us for so long as we were making €500 bids and it is only now at market value. The EA had put it on thr market at a ridiculously low price in the first place.

If you have been going for seven weeks at 500 Eur increments, its no wonder the EA and vendor have moved to sealed bids. If the increments had been in 5k you would have been at this stage in 10 days or less and heading to close the deal.

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Askthe EA

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It is not disingenuous. It doesnt matter what the property sale price is. The EA only gets a percentage of a percentage. Using the (accurate) figures I gave it doesnt matter if the property is 100k or 1mill the EAs cut of €20k is still €60 before tax (@1.5%).

Using your figures, would an EA risk his career for 3.5K a year? I doubt it, I certainly wouldnt. Also, on high value properties such as million plus houses, the fees tend to be lower again (.75% - 1%) therefore a 20K bump is now only worth €30 - €40 before tax.

In relation to your point about underbidders not being contactable, their name, address,email and telephone number must be recorded. I agree with you that the transparency isnt there but unless we go to a public auction style system it never will be.

Your point regarding a minimum acceptable price is valid however but, from my opinion and experience working in 3 separate EAs I have NEVER seen it happen. Not saying it doesnt, but its not as likely as people think.

Ultimately, an EA does not reach into your pocket and take your money. If you are not willing or uncomfortable to proceed at whatever level you are at, walk away.

Conrad83

Askthe EA wrote: »

Every bid must be recorded by both soft copy and hard copy and kept for (6 years, I think). You are not entitled to see them but if you have concerns you may contact the PSRA who can demand to see the files and can contact the bidders to confirm their validity. The PSRA have recently begun spot checking EAs throughout the country for compliance.

Look, Ive said it here before and I'll say it again. There are very, very few EAs who will risk their license and by extension career by creating phantom bidders. It just doesn't happen in the 3 EA I have worked in and certainly not in a reputable office. A small guy on his own might be tempted I guess.

Look at it like this.... If a property is selling for 200k the fee is likely to be between €2k and €3k (1 - 1.5%). That fee goes to the office and depending on his salary agreements the agent will see a percentage of this only.

Am I going to risk my career to create a phantom bidder? Lets look at it and see. Lets say the sales fee is 1.5%. I make 20% commission and create a phantom bidder of €20K above the legitimate bid. 1.5% of €20k = €300. 20% of this is €60 Thats €60 before tax.

No, no I am not going to risk my career for €35

Does anyone know how long it takes the PSRA to investigate a complaint? And should I advise the EA at this stage that I am taking the matter further? He may see this as a threat or sour grapes but he can't penalise me as I have been acting in good faith whereas I suspect he hasn't and there have been a lot of red flags through the process, I have evertithing documented and in writing should I go down the road of making a complaint.

Askthe EA

Conrad83 wrote: »

Does anyone know how long it takes the PSRA to investigate a complaint? And should I advise the EA at this stage that I am taking the matter further? He may see this as a threat or sour grapes but he can't penalise me as I have been acting in good faith whereas I suspect he hasn't and there have been a lot of red flags through the process, I have evertithing documented and in writing should I go down the road of making a complaint.

Not a clue. Ive never been complained! Give the PSRA a call and see what they say.

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Askthe EA

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Again lets look at it. Say a €100k phantom bid @ 1.5% €100,000 / 100 *1.5 = €1500 / 20% = €300 before tax = €180 approx Am I going to risk my career for €180? No.

As I pointed out above, on million plus houses the fee is generally smaller but we'll go for the higher 1%. €100,000/100*1= €1000 / 20% = €200 before tax €130 approx. No again.

For it to be worth the risk, you'd need to be doing it wholesale and your career wont last long. Look, Im not going to convince you to change your mind so we'll leave it at that.

On your second point, I'll take that as a compliment thanks! ;-)

antoinolachtnai

What exactly has the EA done wrong (a) to his client and (b) to you. Really, unless he has done something to cause his client loss, I don't see that there will be much they can or will want to do. It is up to you obviously. But I just don't know what benefit this will be.

Estate agents do operate under tremendous pressure. They have a lot of pressure to make sales, and they are under a mix of pressure, uncooperativeness, indecision and lethargy from their clients, the vendors. Also, prospective purchasers are very unpredictable and do odd things all the time. This in itself isn't something you can really complain about.

I think what could have happened was that the other prospective purchaser got upset when he heard about the sealed bids idea and decided that he would walk away. To your mind and my mind this is an odd thing to have done, but people do funny things when they are making the biggest purchase of their lives.

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Conrad83

antoinolachtnai wrote: »

What exactly has the EA done wrong (a) to his client and (b) to you. Really, unless he has done something to cause his client loss, I don't see that there will be much they can or will want to do. It is up to you obviously. But I just don't know what benefit this will be.

Estate agents do operate under tremendous pressure. They have a lot of pressure to make sales, and they are under a mix of pressure, uncooperativeness, indecision and lethargy from their clients, the vendors. Also, prospective purchasers are very unpredictable and do odd things all the time. This in itself isn't something you can really complain about.

I think what could have happened was that the other prospective purchaser got upset when he heard about the sealed bids idea and decided that he would walk away. To your mind and my mind this is an odd thing to have done, but people do funny things when they are making the biggest purchase of their lives.

Yes the other bidder could have walked away but should the EA not have told me this rather than telling me he was still in it in a view to squeeze more money out of me? If the other person walked away surely there wouldn't be a request for sealed bids and the property just goes to the next bidder (me)? Why would someone be upset by it going to sealed bids. Surely we both want this over with as it has dragged on so long.

What the EA has done wrong is possibly lie about the a bid, which I suspect, and if he has lied about one bid how many others have been lied about? Thus driving up the price of the property.

ted1

[Deleted User] wrote: »

If you have been going for seven weeks at 500 Eur increments, its no wonder the EA and vendor have moved to sealed bids. If the increments had been in 5k you would have been at this stage in 10 days or less and heading to close the deal.

I got my house from a 500 increment. A 5k bid would have resulted in me over paying by 4.5k.

pwurple

I got our current house by going up in 5k increments, the other bidder was going in 500 euro increments, after 2 of those, the EA told the 500 euro bidder to make a decent bid or shag off (in different words). We were still under asking price, but the vendor wanted it wrapped up fast as it was a marriage breakdown, and they wanted to go their separate ways sharpish.

ted1

So quite possibly you over paid by 4.5K

Moomintroll99

They do sell some houses this way in Australia where I'm from, although I've never bought anything that way. Also in Scotland it is often done this way I think. Generally a feature of super hot markets - is the market on the boil where you are?

I think it's massively to the advantage of the vendor because the buyer makes their best offer. Even an auction is just the 'next best' offer than someone else is prepared to pay - if you're happy to go to x + 20 but the next auction or private sale bidder only offers x + 5 then you can get it for x + 6, but the vendor has thus missed out on the x + 20 you would have paid via sealed bid. So I can see the attraction for vendors definitely.

I reckon if you're at all dodgy about it just put in a bid that's a fraction higher than your current one, maybe 50 euro, and leave it at that. The advantage of participating is that at least it's sorted once and for all, you can stop playing increment tennis, and if the other bidder is real enough to beat you then you can walk away in the knowledge you offered a decent price and it wasn't to be.

Houses are like people: some of them just ain't worth the hassle.

antoinolachtnai

Conrad83 wrote: »

Yes the other bidder could have walked away but should the EA not have told me this rather than telling me he was still in it in a view to squeeze more money out of me? If the other person walked away surely there wouldn't be a request for sealed bids and the property just goes to the next bidder (me)? Why would someone be upset by it going to sealed bids. Surely we both want this over with as it has dragged on so long.

What the EA has done wrong is possibly lie about the a bid, which I suspect, and if he has lied about one bid how many others have been lied about? Thus driving up the price of the property.

But I thought he did tell you that the other person has walked away, or something?

The estate agent is entitled to ask you for a bid and to ask that it be your final bid. The 'sealed bid' is an assurance to you that there can't be an inside bidder.

I do not see that he is required to tell you that other people have fallen out of the race.

The vendor is not at any prospect of being at a loss at all as far as I can see. I can see the process is unpleasant, but I can't see that the agent has done anything particularly bad.

Conrad83

antoinolachtnai wrote: »

But I thought he did tell you that the other person has walked away, or something?

The estate agent is entitled to ask you for a bid and to ask that it be your final bid. The 'sealed bid' is an assurance to you that there can't be an inside bidder.

I do not see that he is required to tell you that other people have fallen out of the race.

The vendor is not at any prospect of being at a loss at all as far as I can see. I can see the process is unpleasant, but I can't see that the agent has done anything particularly bad.

No he told me that the other party had withdrawn their last bid of €500 when they found out it might be going to sealed bids but they were still in it cos they wanted to wait and see how things panned out. When I first started bidding 5h343

If it is just 2 parties bidding for 2 months and one pulls out does telling me that the other person is still in it and it's going to full and final bids not look like he is trying to squeeze more money out of me? Leading me to believe another party exists when they don't? That's how it appears to me anyway, especially when he had heard nothing from the other party for over a week before his last withdrawn bid. When I started bidding I asked how many were bidding I was told 5 then next time I asked I was told 2. Who knows really! All guessing with them as I wouldn't trust them as far as I could throw them.

antoinolachtnai

It must be a very frustrating process for you. I don't fully understand what you are telling me about the bids and where you started and so on. It might be better not to go into specifics anyway.

In broad general terms, he is perfectly entitled (and maybe even contractually bound) to squeeze money out of you. That is his job. He is not an honest broker, he is the seller's agent. It is not his fault if bidders fall out. Bidders do strange things. They change their minds, or they go ahead with a different property which they are interested in. Vendors also do strange things. Not trusting estate agents is very common, and it really is true that you can't believe anything an estate agent tells you. But that's not necessarily because a particular agent is dishonest.

Conrad83

Conrad83 wrote: »

No he told me that the other party had withdrawn their last bid of €500 when they found out it might be going to sealed bids but they were still in it cos they wanted to wait and see how things panned out

The whole point of a "sealed bid" is that the other competitors do not know what you are bidding.

So firstly they ask for sealed bids, the other competitor drops out, no need now for sealed bids!

If they're now back in, either they participate in the sealed bid or you just make your full and final offer and see what happens, i.e. normal bid.

Whatever about phantom bids, this business of asking one party to proceed with a sealed bid is at best absurd, at worst a (totally legal) ruse to push your bid up a bit more.