10% above asking price with no offers - is this a common strategy?

buyer123

I wonder if it is a common investor's strategy to bid 10% above the asking price when the only other offer was 10% below the price?

Is that how someone hating bidding wars may try to prevent them from happening?

On the other hand, there were no other offers even close to the asking price in first place, so why offering to pay 10% more?

Fol20

Bidding wars can get quite emotional so if you bid a good bit more that current bid. people take think twice at putting in an offer vs bitting 1/2k increments

Parchment

Could be a misguided "knockout" bid, hoping the sellers will just accept.

It would make more sense to just go straight in at the asking price but....people are strange.

Also who told you this? estate agent?

Samuel T. Cogley

I went in with an overbid on my place. I think the closest offer was about 10K under and I went 15K over, it was accepted the next day.

I'm not suggesting it's the strategy for everyone but the house was absolutely perfect for our needs, exactly where we wanted it and somewhat of a one-off. I'm a great believer in set a limit and only go to that limit. I went to that limit from the outset as the other possibility was a bidding war in 1 or 2K increments, potentially to over my limit - which had happened just a few days prior with a house going to best and finals, and I declined to play that game. So I best and finaled on anther, nicer, house from the outset.

There is no right answer to how to bid on a property, every situation is different.

Samuel T. Cogley

Parchment wrote: »

Could be a misguided "knockout" bid, hoping the sellers will just accept.

It would make more sense to just go straight in at the asking price but....people are strange.

Also who told you this? estate agent?

Asking prices are set to get people in, to bid against each other. They are generally lower than the seller expects to get.

Casa2

buyer123 wrote: »

I wonder if it is a common investor's strategy to bid 10% above the asking price when the only other offer was 10% below the price?

Is that how someone hating bidding wars may try to prevent them from happening?

On the other hand, there were no other offers even close to the asking price in first place, so why offering to pay 10% more?

We bid 6% more than asking price as I knew the value of the property on that particular area. We knew also our limit so we put everything on the table. Offer accept next day. We are trying to buy a house/apartment for almost a year so enough was enough in our case. Would I prefer to pay less? Yes but did I want to start a bidding war again? No I was sick and tired already of speculations and rising prices so that was the best solution in our case.

Parchment

Casa2 wrote: »

We bid 6% more than asking price as I knew the value of the property on that particular area. We knew also our limit so we put everything on the table. Offer accept next day. We are trying to buy a house/apartment for almost a year so enough was enough in our case. Would I prefer to pay less? Yes but did I want to start a bidding war again? No I was sick and tired already of speculations and rising prices so that was the best solution in our case.

This was pretty much our case - we were sick of bidding wars, wanted the house so went in with a knockout bid that we could afford and left it at that.

We were withered from the whole process - we had been looking for 1.5 years with no success. We needed a change of tactic and it worked.

Samuel T. Cogley

OP I apologise if this turns your thread into a flaming of me but I've tended to find if you're upfront with the EA, here's my limit etc. they're fairly upfront with you. Once one starts engaging in all the cloak and dagger nonsense that seems to be regally advocated, I'm not surprised if some of them engage back. Now I'm not suggesting one is naive and doesn't recognise that the EA is a slippery sod and working entirely for the vendor's interest but if your near your limit on the house, as I'd imagine most people are when looking, then there's something to be said for trying to play that as an advantage.

It's completely different when you've plenty of money and are trying to get the best deal, generally though at that stage you've either a huge am,ount of knowledge on what you're doing. For example investing in an area you believe to be undervalued or you're downsizing/moving closer to relatives and price isn't such an issue for you.

It's different again when one is looking at an area that's much lower than their mortgage approval - I've no advice to offer there having never been involved in that sort of purchase, I do wonder exactly how many buyers approved for say €500K are looking at houses in the €300K bracket? If it was a significant number we might not be back in this mess, but I digress into the realms of financial prudence.

Lumen

Samuel T. Cogley wrote: »

I've tended to find if you're upfront with the EA, here's my limit etc. they're fairly upfront with you.

Yeah, well when I've spoken to EAs informally about that their attitude is "buyers often say that's their limit but it rarely is".

EAs are professional liars to some degree or another. They'll drag you down to their level and beat you with experience.

My advice would be: ask as little as possible, say as little as possible.

Ayuntamiento

We put in our first offer at over the asking price on the understanding that this was the price it would take to go sale agreed that same day. It worked for us and we'll be moving in soon!
I wouldn't have made the bid if the estate agent hadn't agreed to take it off the market that same day though.

Also I would NEVER tell the Estate Agent that you've reached your limit. That allows them to go back to the second bidder and tell them that they will get the house if they can afford to go even 1k over your bid.
The whole point of the knock-out bid is to try and put the idea in the other bidder's head that you have more money than them and that it's pointless for them to keep bidding against you.
Of course most of this bidding psychology is bs and the most effective way to get a property is to only look at those that are asking at least 50k under your max budget.

buyer123

So it looks like the apartment with that offer of 10% above the asking price is having again open viewing this week. Is that the norm?

buyer123

Also who told you this? estate agent?

Yes, estate agent. And it is on view again this week, a week since that offer was received. Reasons to have doubts?

Samuel T. Cogley

buyer123 wrote: »

So it looks like the apartment with that offer of 10% above the asking price is having again open viewing this week. Is that the norm?

Yep, looking to get more.

buyer123

Yep, looking to get more.

Aren't they risking to lose this bidder if waiting too long, and not getting other offers that high? There have been already at least 2 viewings.