The psychology of bidding in 5k (or other) increments

airportgirl83

I've recently inquired about a 2nd hand house with an estate agent. I was told there is currently an offer of €455k on it. I was asked if I want to bid in €5k steps? I was really surprised by his question as it's my understanding that you can bid any amount up whether it's €5k or €500. Obviously he wants to reach the asking price asap but suggesting €5k bids seems odd and puts me off from dealing with him tbh even though I have a healthy budget to bid. Any thoughts anyone?

awec

airportgirl83 wrote: »

I've recently inquired about a 2nd hand house with an estate agent. I was told there is currently an offer of €455k on it. I was asked if I want to bid in €5k steps? I was really surprised by his question as it's my understanding that you can bid any amount up whether it's €5k or €500. Obviously he wants to reach the asking price asap but suggesting €5k bids seems odd and puts me off from dealing with him tbh even though I have a healthy budget to bid. Any thoughts anyone?

Bid any amount you want but it's going to be a very long, tedious process if people increment by 500 quid at a time.

It's not just about reaching the asking price, but also about getting the bidding over and done with relatively efficiently. The estate agent is most concerned with getting the house sold as quick as possible, that's when they get their cut.

If I was a seller and there was one bidder that kept just increasing by 1k every time I'd think they were a time waster.

Bigmac1euro

Not sure how different it is down here but a friend of mine up north was bidding in 1k increments even though he had the money to go up 5 or 10k jumps, the other person eventually couldn't go any further, this was only 3 weeks ago. He may have just save himself 4k. Why would you bid in 5k increments ?

airportgirl83

I just think it's wrong suggesting €5k steps as you can bid any amount. Going by €5k might unnecessarily drive up the price, in the heat of the moment.

The_Conductor

airportgirl83 wrote: »

I just think it's wrong suggesting €5k steps as you can bid any amount. Going by €5k might unnecessarily drive up the price, in the heat of the moment.

+1
Bid in whatever manner you're comfortable with- and walk away when you decide that the property is no longer worth the price that is currently associated with it.

awec

airportgirl83 wrote: »

I just think it's wrong suggesting €5k steps as you can bid any amount. Going by €5k might unnecessarily drive up the price, in the heat of the moment.

He's only suggesting it to save your time and his.

You can bid any amount you want.

airportgirl83

awec wrote: »

airportgirl83 wrote: »

I've recently inquired about a 2nd hand house with an estate agent. I was told there is currently an offer of €455k on it. I was asked if I want to bid in €5k steps? I was really surprised by his question as it's my understanding that you can bid any amount up whether it's €5k or €500. Obviously he wants to reach the asking price asap but suggesting €5k bids seems odd and puts me off from dealing with him tbh even though I have a healthy budget to bid. Any thoughts anyone?

Bid any amount you want but it's going to be a very long, tedious process if people increment by 500 quid at a time.

It's not just about reaching the asking price, but also about getting the bidding over and done with relatively efficiently. The estate agent is most concerned with getting the house sold as quick as possible, that's when they get their cut.

If I was a seller and there was one bidder that kept just increasing by 1k every time I'd think they were a time waster.

I was a seller myself and I didn't think someone was a time waster by bidding in small amounts. Just because someone puts a high bid quickly, doesn't mean they'll end up with the house. The +1k bidder should not be underestimated.

awec

Bigmac1euro wrote: »

Not sure how different it is down here but a friend of mine up north was bidding in 1k increments even though he had the money to go up 5 or 10k jumps, the other person eventually couldn't go any further, this was only 3 weeks ago. He may have just save himself 4k. Why would you bid in 5k increments ?

Well if you are willing to go 30k over the current asking price that is potentially 30 back-and-forth bids before you're done. That's a huge waste of time for all concerned.

5k over the course of a mortgage is nothing.

I would imagine most people, when involved in bidding, want to either win the bidding or lose the bidding as quickly as possible, so they can either start to close or move on to the next house. Nobody wants to be stuck in endless back and forth because someone wants to save a whole 4k when they're already dropping nearly half a million.

awec

airportgirl83 wrote: »

I was a seller myself and I didn't think someone was a time waster by bidding in small amounts. Just because someone puts a high bid quickly, doesn't mean they'll end up with the house. The +1k bidder should not be underestimated.

No, but it means someone will end up winning the bidding faster.

I mean, if it were me, I'd have the max I'm willing to pay, and go up in bigger increments to start with and then slow down as I approach my max. I would see this as a good compromise between getting a price I'm happy with versus not taking forever on bidding.

Bigmac1euro

awec wrote: »

Well if you are willing to go 30k over the current asking price that is potentially 30 back-and-forth bids before you're done. That's a huge waste of time for all concerned.

5k over the course of a mortgage is nothing.

I would imagine most people, when involved in bidding, want to either win the bidding or lose the bidding as quickly as possible, so they can either start to close or move on to the next house. Nobody wants to be stuck in endless back and forth because someone wants to save a whole 4k when they're already dropping nearly half a million.

Closer to 200,000 for the guy i was talking about, if your willing to go 30k over, bidding 10k at a time is just ridiculous, its the biggest purchase of most peoples lives. No wonder everything is over priced if bidding in this way is most popular. I couldn't care who I'm annoying or how long it takes. When I cant bid any more then I wont. Just my opinion on it everyone is different. If I bid on a house and someone goes 10k above me, if I can afford it ill go another 2k. I wont throw an extra 8k for the sake of getting things wrapped up fast.

airportgirl83

awec wrote: »

Bigmac1euro wrote: »

Not sure how different it is down here but a friend of mine up north was bidding in 1k increments even though he had the money to go up 5 or 10k jumps, the other person eventually couldn't go any further, this was only 3 weeks ago. He may have just save himself 4k. Why would you bid in 5k increments ?

Well if you are willing to go 30k over the current asking price that is potentially 30 back-and-forth bids before you're done. That's a huge waste of time for all concerned.

5k over the course of a mortgage is nothing.

I would imagine most people, when involved in bidding, want to either win the bidding or lose the bidding as quickly as possible, so they can either start to close or move on to the next house. Nobody wants to be stuck in endless back and forth because someone wants to save a whole 4k when they're already dropping nearly half a million.

I guess everyone's circumstances are different. I'm ok waiting to see how things play out as there is always another house out there but someone who is a hurry might want to as you suggested move on to another property as quickly as possible.

airportgirl83

Bigmac1euro wrote: »

awec wrote: »

Well if you are willing to go 30k over the current asking price that is potentially 30 back-and-forth bids before you're done. That's a huge waste of time for all concerned.

5k over the course of a mortgage is nothing.

I would imagine most people, when involved in bidding, want to either win the bidding or lose the bidding as quickly as possible, so they can either start to close or move on to the next house. Nobody wants to be stuck in endless back and forth because someone wants to save a whole 4k when they're already dropping nearly half a million.

Closer to 200,000 for the guy i was talking about, if your willing to go 30k over, bidding 10k at a time is just ridiculous, its the biggest purchase of most peoples lives. No wonder everything is over priced if bidding in this way is most popular. I couldn't care who I'm annoying or how long it takes. When I cant bid any more then I wont. Just my opinion on it everyone is different. If I bid on a house and someone goes 10k above me, if I can afford it ill go another 2k. I wont throw an extra 8k for the sake of getting things wrapped up fast.

That's my view anyway. Well I asked the agent why he wants me to bid in 5k steps. I don't think I'll hear back from him...

JayWasTaken

awec wrote: »

That's a huge waste of time for all concerned.

5k over the course of a mortgage is nothing.

No its still 5K. For what amounts to maybe an hour or two on the phone to an estate agent over the course of a few weeks. Saving 5K by spending a few extra minutes on the phone, you'd have to be mental not to.

awec

JayWasTaken wrote: »

No its still 5K. For what amounts to maybe an hour or two on the phone to an estate agent over the course of a few weeks. Saving 5K by spending a few extra minutes on the phone, you'd have to be mental not to.

It's 5k over the course of 25/30 years.

Have you calculated the difference the mortgage payment would be on paying 455 vs paying 460? It must be like 20 quid a month or something? Less than 1% increase on your monthly payment.

Like if I was willing to go 30k over, I'd probably bid first 5k. Absolute worst case, I have overpaid by 4k, which is absolutely feck all when I'm already paying 460,000. If the counter bid comes back at 465,000, then I'll go 470,000, again worst case is 4k overpaid. I'd slow down when I come nearer to my limit, maybe reduce to 3k, then 2k, then 1k.

If you are so uptight about getting the absolute minimum possible you will drive yourself insane. There will always be someone who got a bit of a better deal than you. Pay a price you're happy to pay and move on with your life.

awec

airportgirl83 wrote: »

That's my view anyway. Well I asked the agent why he wants me to bid in 5k steps. I don't think I'll hear back from him...

I don't even understand why you're asking him.

Bid whatever you want, you don't need his permission. He's just suggesting 5k to get the ball rolling, if you're happy to go slower then just go slower, it's your decision, not his.

airportgirl83

awec wrote: »

JayWasTaken wrote: »

No its still 5K. For what amounts to maybe an hour or two on the phone to an estate agent over the course of a few weeks. Saving 5K by spending a few extra minutes on the phone, you'd have to be mental not to.

It's 5k over the course of 25/30 years.

Have you calculated the difference the mortgage payment would be on paying 455 vs paying 460? It must be like 20 quid a month or something? Less than 1% increase on your monthly payment.

Like if I was willing to go 30k over, I'd probably bid first 5k. Absolute worst case, I have overpaid by 4k, which is absolutely feck all when I'm already paying 460,000. If the counter bid comes back at 465,000, then I'll go 470,000, again worst case is 4k overpaid. I'd slow down when I come nearer to my limit, maybe reduce to 3k, then 2k, then 1k.

If you are so uptight about getting the absolute minimum possible you will drive yourself insane. There will always be someone who got a bit of a better deal than you. Pay a price you're happy to pay and move on with your life.

In the course of 25/30 years €5k would not matter hugely. But it does when you have Solicitor and other fees to pay or make improvements to the property. It might matter more in the short term rather than ling term imo anyway.

awec

The other thing to consider, how close do you think the current bid is to what the end result will be?

I can see a lot of merit in small increases if you are coming in late to the bidding and the price is near the realistic final price.

If you know for sure that it's going to go up another 30 or 40 grand then I don't see why you'd bother increasing 1k.

airportgirl83

awec wrote: »

airportgirl83 wrote: »

That's my view anyway. Well I asked the agent why he wants me to bid in 5k steps. I don't think I'll hear back from him...

I don't even understand why you're asking him.

Bid whatever you want, you don't need his permission. He's just suggesting 5k to get the ball rolling, if you're happy to go slower then just go slower, it's your decision, not his.

I'm asking him as I don't like what he's suggesting, just to be ackward. Someone who is bidding for a very first time, not experienced, might actually think that this is the way to bid going by the way he phrased it in his email. His exact wording was: do you want to bid in €5k steps.

grogi

awec wrote: »

It's 5k over the course of 25/30 years.

Have you calculated the difference the mortgage payment would be on paying 455 vs paying 460? It must be like 20 quid a month or something? Less than 1% increase on your monthly payment.

Like if I was willing to go 30k over, I'd probably bid first 5k. Absolute worst case, I have overpaid by 4k, which is absolutely feck all when I'm already paying 460,000. If the counter bid comes back at 465,000, then I'll go 470,000, again worst case is 4k overpaid. I'd slow down when I come nearer to my limit, maybe reduce to 3k, then 2k, then 1k.

If you are so uptight about getting the absolute minimum possible you will drive yourself insane. There will always be someone who got a bit of a better deal than you. Pay a price you're happy to pay and move on with your life.

Classic penny wise, pound stupid.

€4k is €4k - it won't remember where you save that €4k - on a car or on a house.

awec

grogi wrote: »

Classic penny wise, pound stupid.

€4k is €4k - it won't remember where you save that €4k - on a car or on a house.

€4k is €4k but you have to take into account how much it is relative to what you are paying.

Saving €4k on a house that costs €460 is like saving €180 on a €20k car. Relatively it is peanuts, less than a single percent.

So while nobody is advocating that you should just throw your money at the bids, if someone said to me I could finish the bidding today and save myself further back and forth, and potentially "overpay" by less than a single percentage point, which again affects the morgage payment by less than 1% per month, I'd be quite happy to.

Mickiemcfist

awec wrote: »

€4k is €4k but you have to take into account how much it is relative to what you are paying.

Saving €4k on a house that costs €460 is like saving €180 on a €20k car. Relatively it is peanuts, less than a single percent.

How much time does it take you to earn 4k? That stays the same whether you're buying houses or hoovers. Additionally, 4k over 30 years is closer to 8k. It's actually cheaper to overpay by 4k on a car than it is to overpay by 4k on a house.

awec

Mickiemcfist wrote: »

How much time does it take you to earn 4k? That stays the same whether you're buying houses or hoovers. Additionally, 4k over 30 years is closer to 8k. It's actually cheaper to overpay by 4k on a car than it is to overpay by 4k on a house.

Well, that is a good point. 4k is different to different people.

But for someone who is capable of paying ~500k on a house, 4k is not an enormous sum of money. It's 2 months mortgage payment.

The_Conductor

awec wrote: »

Well, that is a good point. 4k is different to different people.

But for someone who is capable of paying ~500k on a house, 4k is not an enormous sum of money. It's 2 months mortgage payment.

It may be the difference between furnishing your living room/bedroom and buying kitchen appliances- or not.

Most people over-stretch themselves financially when buying property- to the extent they have to severely curtail expenditure even on things like furnishing their new property. Its part of human nature.......

awec

The_Conductor wrote: »

It may be the difference between furnishing your living room/bedroom and buying kitchen appliances- or not.

Most people over-stretch themselves financially when buying property- to the extent they have to severely curtail expenditure even on things like furnishing their new property. Its part of human nature.......

If you're talking about paying an extra 4k in cash up front, sure. That would be worth saving for sure, especially since kitting out a new house is more expensive than pretty much everyone thinks.

But 4k extra on the mortgage? As I said, the difference is like 20 quid a month. If that is the difference between you furnishing or not furnishing your new gaff then you have bigger financial issues at play.

tigger123

The_Conductor wrote: »

It may be the difference between furnishing your living room/bedroom and buying kitchen appliances- or not.

Most people over-stretch themselves financially when buying property- to the extent they have to severely curtail expenditure even on things like furnishing their new property. Its part of human nature.......

Would it really be though? It's not 4k in your hand right now, it's 4k that you borrow over the course of 30 years. You don't have access to that money unless you pay for it as part of the house purchase.

Likewise, no institution is going to lend you 4k over the course of 30 years for a suite of furniture.

terrydel

awec wrote: »

Well, that is a good point. 4k is different to different people.

But for someone who is capable of paying ~500k on a house, 4k is not an enormous sum of money. It's 2 months mortgage payment.

Thats half the problem in this country tho, loads of people are technically capable of paying these prices and do so largely becuase theyve no choice as thats the market and if you need a home you have to pay it, but this attitude of 'ah sure its just another 4k on top of 400k' just exacerbates the whole madness we live in.
And in any case, 4k is a nice sum whether you are poor or well off, in terms of what you could do to a house to make it nicer once youve bought it. That flippant attitude towards significant sums of money really annoys me and is so Celtic Tiger for me, sorry.

Edit - points above apply more specifically if the money is coming from savings and not added to the mortgage, but it still stands that being so blase about adding to borrowings that over 30 years can cost a lot of money, is symptomatic of the culture that has us in this mess.

beauf

I don't get the 4k. Its 4k plus interest. Then most of what you buy won't last the length of the mortgage. So you'll have to replace it.
You won't furnish a house with 4k anyway. Not with quality stuff that will last. or survive kids.

tigger123

terrydel wrote: »

Thats half the problem in this country tho, loads of people are technically capable of paying these prices and do so largely becuase theyve no choice as thats the market and if you need a home you have to pay it, but this attitude of 'ah sure its just another 4k on top of 400k' just exacerbates the whole madness we live in.
And in any case, 4k is a nice some whether you are poor or well of, in terms of what you could do to a house to make it nicer once youve bought it. That flippant attitude towards significant sums of money really annoys me and is so Celtic Tiger for me, sorry.

Edit - points above apply more specifically if the money is coming from savings and not added to the mortgage, but it still stands that being so blase about adding to borrowings that over 30 years can cost a lot of money, is symptomatic of the culture that has us in this mess.

I'd disagree. It's symptomatic of a serious lack of supply in this country of housing stock. People are being driven to this because its so difficult to purchase a home.

People don't want to be doing it, it's market forces (and ineffectual/non-existent Government policy).

grogi

awec wrote: »

If you're talking about paying an extra 4k in cash up front, sure. That would be worth saving for sure, especially since kitting out a new house is more expensive than pretty much everyone thinks.

But 4k extra on the mortgage? As I said, the difference is like 20 quid a month. If that is the difference between you furnishing or not furnishing your new gaff then you have bigger financial issues at play.

For the 4k so easily forgettable, will cost you €20 every month. For 30 years. That's a free pub visit a month for effectively the rest of your life...

woodchuck

4k is 4k. Even if it's spread out over a number of decades and amounts to 20 quid a month, I'd much rather have someone hand me 20euro a month than not! Especially after spending a crazy amount on bricks and mortar, I'd take whatever little I could get.

20euro a month would cover any of the following for me:
- An early bird meal deal
- 2 cinema tickets
- 20 1euro kindle books on amazon
- Take away
- A couple of cocktails
- Tickets to many small theatre productions

The things I would do with an extra 20euro a month :P

awec

terrydel wrote: »

Thats half the problem in this country tho, loads of people are technically capable of paying these prices and do so largely becuase theyve no choice as thats the market and if you need a home you have to pay it, but this attitude of 'ah sure its just another 4k on top of 400k' just exacerbates the whole madness we live in.
And in any case, 4k is a nice some whether you are poor or well of, in terms of what you could do to a house to make it nicer once youve bought it. That flippant attitude towards significant sums of money really annoys me and is so Celtic Tiger for me, sorry.

Edit - points above apply more specifically if the money is coming from savings and not added to the mortgage, but it still stands that being so blase about adding to borrowings that over 30 years can cost a lot of money, is symptomatic of the culture that has us in this mess.

I think these are lazy, generalising statements that make no sense at all.

Do you really think Irish people are any different to anyone else when it comes to buying things?

awec

woodchuck wrote: »

4k is 4k. Even if it's spread out over a number of decades and amounts to 20 quid a month, I'd much rather have someone hand me 20euro a month than not! Especially after spending a crazy amount on bricks and mortar, I'd take whatever little I could get.

20euro a month would cover any of the following for me:
- An early bird meal deal
- 2 cinema tickets
- 20 1euro kindle books on amazon
- Take away
- A couple of cocktails
- Tickets to many small theatre productions

The things I would do with an extra 20euro a month :P

But nobody is handing you 20 quid a month?

People list these things that you can do with 20 quid a month, as if the difference between having this 20 quid and not is a life of solitude indoors or a life of luxury.

Anyone who is able to pay 2 grand a month on a mortgage is not going to notice 20 quid. It is going to make absolutely zero difference to their lifestyle. They are not going to stop going to the pub, they are not going to stop going to the cinema, they are not going to stop buying stuff. For someone to be approved for that level of mortgage, their income would have to be such that 20 quid is an insignificant amount of money.

If 20 quid was enough to affect your lifestyle you would never be approved for a mortgage in the first place, so the whole discussion is moot.

The_Conductor

awec wrote: »

I think these are lazy, generalising statements that make no sense at all.

Do you really think Irish people are any different to anyone else when it comes to buying things?

Most people do not borrow to furnish their homes though- they do so from savings. If they are maxing out on their borrow potential- and eating into limited savings for furnishings etc- you can see how this happens.

Also- its never been normal for banks to lend towards furnishing your property- so its not really fair to try and use the analogy of a 30 year mortgage and how 5k doesn't really make a lot of difference one way or the other.

Simply- it may be a deal breaker for some people- while it may be comfortably manageable for others- there isn't a one size fits all.

Just because you can potentially borrow an extra 5k (or indeed multiples of 5k for subsequent bids)- doesn't necessarily mean it makes good financial sense to do so- it might work for you- it might not work for others.

Its not black and white- and its not fair that something that means little hardship to one person can be a deal breaker for someone else- but that's the way of the world.

terrydel

tigger123 wrote: »

I'd disagree. It's symptomatic of a serious lack of supply in this country of housing stock. People are being driven to this because its so difficult to purchase a home.

People don't want to be doing it, it's market forces (and ineffectual/non-existent Government policy).

Fair points and totally agree re. government policy, which amounts to nothing more than massively enrich a small minority at the expense of the majority.
Sure theyve basically engineered a private rental sector owned by powerful, wealthy, profit driven entities that can lean on tenants and society far, far more than a disjointed collection of small landlords, whove been driven out of the market to let the super rich come in and hoover up.
Building homes (social or otherwise) at a fast rate doesnt suit their agenda. So it wont and isnt happening. But people vote for them in their droves. Its depressing.

awec

The_Conductor wrote: »

Most people do not borrow to furnish their homes though- they do so from savings. If they are maxing out on their borrow potential- and eating into limited savings for furnishings etc- you can see how this happens.

Also- its never been normal for banks to lend towards furnishing your property- so its not really fair to try and use the analogy of a 30 year mortgage and how 5k doesn't really make a lot of difference one way or the other.

Simply- it may be a deal breaker for some people- while it may be comfortably manageable for others- there isn't a one size fits all.

Just because you can potentially borrow an extra 5k (or indeed multiples of 5k for subsequent bids)- doesn't necessarily mean it makes good financial sense to do so- it might work for you- it might not work for others.

Its not black and white- and its not fair that something that means little hardship to one person can be a deal breaker for someone else- but that's the way of the world.

But I didn't say this. I have not argued for anyone to just throw more money at things whether they can afford it or now.

The current bid is 455. Let's say for example the poster knows the current bid is not going to be accepted, and that the house more than likely going to sell for at least 480, given other houses that have sold in the same area. Let's say the poster can afford to pay up to 490, and has decided this is the max they are willing to go to for this particular property.

My point all along has been to increase your bids by 1k (i.e. to come in with a bid of 456), when you know you can afford a lot more, and you know the price is going to go up a lot more anyway, is nothing but a waste of time.

So long as the bid is beneath what the seller will realistically accept, it doesn't matter if you go up in increments of 1k or 10k, the only difference is how long it takes to get there. The vendor hasn't accepted 455, a bid of 456 is not going to make them reconsider anything.

woodchuck

awec wrote: »

But nobody is handing you 20 quid a month?

People list these things that you can do with 20 quid a month, as if the difference between having this 20 quid and not is a life of solitude indoors or a life of luxury.

Anyone who is able to pay 2 grand a month on a mortgage is not going to notice 20 quid. It is going to make absolutely zero difference to their lifestyle. They are not going to stop going to the pub, they are not going to stop going to the cinema, they are not going to stop buying stuff. For someone to be approved for that level of mortgage, their income would have to be such that 20 quid is an insignificant amount of money.

If 20 quid was enough to affect your lifestyle you would never be approved for a mortgage in the first place, so the whole discussion is moot.

Whether you let the 20euro a month sit in your bank account completely unnoticed or spend it on a box of donuts doesn't really matter. The point is, I'd rather HAVE the extra 20euro than not! 20euro a month quickly becomes 240euro after a year; not a bad weekend away!

Is it going to make a big difference to your lifestyle? Of course not. But it's still nice to have. Plenty of people stretch themselves thin buying a house and then even thinner if kids come along. I don't know anyone who would turn down an extra 20euro a month if it was an option!

awec

woodchuck wrote: »

Whether you let the 20euro a month sit in your bank account completely unnoticed or spend it on a box of donuts doesn't really matter. The point is, I'd rather HAVE the extra 20euro than not! 20euro a month quickly becomes 240euro after a year; not a bad weekend away!

Is it going to make a big difference to your lifestyle? Of course not. But it's still nice to have. Plenty of people stretch themselves thin buying a house and then even thinner if kids come along. I don't know anyone who would turn down an extra 20euro a month if it was an option!

Of course not, but that's not really relevant here?

You're making it out like it's a choice between throwing 20 quid in the bin or having someone hand you 20 quid. It's 20 quid a month in exchange for securing a property. It's not 20 quid for nothing.

And I don't know why we are talking about people stretching themselves thin still. Again, 20 quid is an insignificant sum of money on a 2 grand a month mortgage. Going from 2000 a month to 2020 a month is not "stretching" by any imagination.

aloooof

One further point to add to this discussion is how long has it taken you to find a property that you've deemed suitable to bid on? If you think bidding 5k may get it over the line, then it could save you months of additional rent while waiting and looking for another suitable alternative.

Wexforllion

Has anyone got official figures of County wide property prices movement for the months of 2019?

airportgirl83

awec wrote: »

The_Conductor wrote: »

Most people do not borrow to furnish their homes though- they do so from savings. If they are maxing out on their borrow potential- and eating into limited savings for furnishings etc- you can see how this happens.

Also- its never been normal for banks to lend towards furnishing your property- so its not really fair to try and use the analogy of a 30 year mortgage and how 5k doesn't really make a lot of difference one way or the other.

Simply- it may be a deal breaker for some people- while it may be comfortably manageable for others- there isn't a one size fits all.

Just because you can potentially borrow an extra 5k (or indeed multiples of 5k for subsequent bids)- doesn't necessarily mean it makes good financial sense to do so- it might work for you- it might not work for others.

Its not black and white- and its not fair that something that means little hardship to one person can be a deal breaker for someone else- but that's the way of the world.

But I didn't say this. I have not argued for anyone to just throw more money at things whether they can afford it or now.

The current bid is 455. Let's say for example the poster knows the current bid is not going to be accepted, and that the house more than likely going to sell for at least 480, given other houses that have sold in the same area. Let's say the poster can afford to pay up to 490, and has decided this is the max they are willing to go to for this particular property.

My point all along has been to increase your bids by 1k (i.e. to come in with a bid of 456), when you know you can afford a lot more, and you know the price is going to go up a lot more anyway, is nothing but a waste of time.

So long as the bid is beneath what the seller will realistically accept, it doesn't matter if you go up in increments of 1k or 10k, the only difference is how long it takes to get there. The vendor hasn't accepted 455, a bid of 456 is not going to make them reconsider anything.

You see in the area I'm looking at houses struggle to get asking price atm hence for that particular house I would bid by small amounts. Also, I'm not in a hurry so can wait how the seller's expectation of the price vs reality plays out.

Also, it's not just one €4k or €5k we're discussing here. If I decide to bid €5k other party might respond with €5k back so suddenly you're up €10k etc. both sides are driving the price up by a large combined amount.

airportgirl83

aloooof wrote: »

One further point to add to this discussion is how long has it taken you to find a property that you've deemed suitable to bid on? If you think bidding 5k may get it over the line, then it could save you months of additional rent while waiting and looking for another suitable alternative.

That is a valid point imo but you will never know if it will bring you over the line or not so your original €5k might end up being €10, 20k extra, not sure if I explain this well.

Sheeps

airportgirl83 wrote: »

You see in the area I'm looking at houses struggle to get asking price atm hence for that particular house I would bid by small amounts. Also, I'm not in a hurry so can wait how the seller's expectation of the price vs reality plays out.

Also, it's not just one €4k or €5k we're discussing here. If I decide to bid €5k other party might respond with €5k back so suddenly you're up €10k etc. both sides are driving the price up by a large combined amount.

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

airportgirl83

Sheeps wrote: »

airportgirl83 wrote: »

You see in the area I'm looking at houses struggle to get asking price atm hence for that particular house I would bid by small amounts. Also, I'm not in a hurry so can wait how the seller's expectation of the price vs reality plays out.

Also, it's not just one €4k or €5k we're discussing here. If I decide to bid €5k other party might respond with €5k back so suddenly you're up €10k etc. both sides are driving the price up by a large combined amount.

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

Interesting point, thanks for sharing

VonLuck

I can understand someone bidding in 5k increments. You're more likely to scare off potential bidders if they see it jump by 5k. If you go in 1k increments, the rival bidder may see it as "just €1000 more" almost indefinitely, even though you could end up bidding the same amount in both scenarios.

airportgirl83

Actually when I went to see the house, I asked a lot of questions, always do. I showed a clear interest I guess. Estate agent said to me: would you like to register a bid? I asked him what does he mean exactly - I understood the words he was saying but wasn't sure if he actually once me to place a bid, it was my first viewing after all. He said you can register a bid of e.g. €450k to keep you updated on the price. What would an estate agent do that? As a seller myself in the past, I would never accept a bid from someone who viewed a house once. Is it to show that there is an interest?

Bigmac1euro

airportgirl83 wrote: »

Actually when I went to see the house, I asked a lot of questions, always do. I showed a clear interest I guess. Estate agent said to me: would you like to register a bid? I asked him what does he mean exactly - I understood the words he was saying but wasn't sure if he actually once me to place a bid, it was my first viewing after all. He said you can register a bid of e.g. €450k to keep you updated on the price. What would an estate agent do that? As a seller myself in the past, I would never accept a bid from someone who viewed a house once. Is it to show that there is an interest?

Get the ball rolling I assume. And also the more “bidders” the better I suppose even if they aren’t serious. Remember 90% of properties your looking at are probably over valued and asking price is out there. If he reaches the asking quickly the sellers are going to love it as is his commission. I’ll always start at 30k or more below asking.

awec

airportgirl83 wrote: »

You see in the area I'm looking at houses struggle to get asking price atm hence for that particular house I would bid by small amounts. Also, I'm not in a hurry so can wait how the seller's expectation of the price vs reality plays out.

Also, it's not just one €4k or €5k we're discussing here. If I decide to bid €5k other party might respond with €5k back so suddenly you're up €10k etc. both sides are driving the price up by a large combined amount.

If you think the current bid is very close to what you feel it will go for then I agree with small increases.

awec

airportgirl83 wrote: »

Actually when I went to see the house, I asked a lot of questions, always do. I showed a clear interest I guess. Estate agent said to me: would you like to register a bid? I asked him what does he mean exactly - I understood the words he was saying but wasn't sure if he actually once me to place a bid, it was my first viewing after all. He said you can register a bid of e.g. €450k to keep you updated on the price. What would an estate agent do that? As a seller myself in the past, I would never accept a bid from someone who viewed a house once. Is it to show that there is an interest?

A bid is non-binding. EA is just trying to get the back rolling.

Your bid wouldn’t be accepted. They’ll just know you’re interested.

kippy

Sheeps wrote: »

My strategy is always to get in early on a house with a bid, and bid about 15-20% under the asking price. That way when other bidders come in they double guess themselves and might also be persuaded to bid under, which in turn sends a message back to the estate agent that says "fuck you" and another message to the property owners that says "maybe you've overestimated how much your house is worth". I've been in 3 bidding wars now where the increments were by a grand each time before i eventually pulled out.

Its always hard to know the best strategy as you rarely have any idea of the situation of the other bidders and/or seller.

Of course the figures mentioned are pretty large but at the end of the day once you can afford the repayments and have set a max price in your head you should bid to that amount particularly if the house ticks all the boxes.
Trying to annoy the estate agent and or seller is never a good tactic though. Ultimately you wanted the three houses and got none. Maybe that will work out for you in the long run. Maybe it won't.

airportgirl83

awec wrote: »

airportgirl83 wrote: »

Actually when I went to see the house, I asked a lot of questions, always do. I showed a clear interest I guess. Estate agent said to me: would you like to register a bid? I asked him what does he mean exactly - I understood the words he was saying but wasn't sure if he actually once me to place a bid, it was my first viewing after all. He said you can register a bid of e.g. €450k to keep you updated on the price. What would an estate agent do that? As a seller myself in the past, I would never accept a bid from someone who viewed a house once. Is it to show that there is an interest?

A bid is non-binding. EA is just trying to get the back rolling.

Your bid wouldn’t be accepted. They’ll just know you’re interested.[/quoted
I know bid is non-binding but no point making it if you're not serious about purchasing a property. I just thought it was an odd thing to ask someone when they are viewing a house for the 1st time but maybe that's what estate agents do these days.

Sheeps

kippy wrote: »

Its always hard to know the best strategy as you rarely have any idea of the situation of the other bidders and/or seller.

Of course the figures mentioned are pretty large but at the end of the day once you can afford the repayments and have set a max price in your head you should bid to that amount particularly if the house ticks all the boxes.
Trying to annoy the estate agent and or seller is never a good tactic though. Ultimately you wanted the three houses and got none. Maybe that will work out for you in the long run. Maybe it won't.

That was last year, and i set my own price limits on those houses because I wasn't happy with them. All of them sold for under the asking price, but you're right. I've never bought a house this way.