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Strategy for bidding below asking price

whatawaster

Hi,

We are currently looking at a detached property, built in the 1950's, and in need of lots of renovation and redecoration (new kitchen, new floors, new windows and doors at the very least). It is priced at 400k. Our budget is 450k but that includes any works we can do to the property.

The property has been on the market for over 2 months. No offers.

We really love the house, it has a very large (but overgrown) south facing garden. Could see ourselves here forever, etc.

We want to make a bid and we are not prepared to pay the asking price. Just wondering, in today's market, how low is too low, while still being taken seriously?

Was thinking 10% below asking, so €360k. We have some flexibility to go higher than this, but thinking of this as a starting point.

Any advice would be appreciated.

Thanks

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pinksoir

https://www.boards.ie/discussion/comment/119971441#Comment_119971441

Yes.

Claw Hammer

https://www.boards.ie/discussion/comment/119970220#Comment_119970220

You should be able to work out yourself what the house is worth before calling the agent. If it looks too good to be true, it probably is. The object is to obtain the maximum possible price. If it involves a few disgruntled buyers, so be it. It i9s better than selling below the maximum from the point of view of the agent and the owner.

JohnnyChimpo

https://www.boards.ie/discussion/comment/119970220#Comment_119970220

maybe, it depends, I bought my house 2.5 years ago for 10% under the asking.

herbalplants

https://www.boards.ie/discussion/comment/119970220#Comment_119970220

You are correct.

pinksoir

https://www.boards.ie/discussion/comment/119970120#Comment_119970120

Ah I know. But it just strikes me as a waste of time. For example, I have a budget of 500k and see a house listed at 480k. I view the house, like it and decide to ring up with an offer. I offer the asking price. Then the estate agent says, "well actually the sellers want 540k for it". My budget won't ever be able to stretch to that so I'm never going to offer close to it so walk away. It wastes my time and the agent's time answering calls and having to tell potential buyers that the 'real' asking price is different/much higher to the listed price.

I'm sure during silly season over the last couple of years it worked by getting desperate people invested in the idea of the house and then springing the real price on them. But when the house has been sitting there for months unsold, it seems a bit silly. Especially when the real asking is entirely unrealistic in the current climate. I'm sure there's an element of " Mary down the road got xxx for her house so we want that" without taking into account the varying conditions of houses and costs of renovation etc.

I mean, generally when you're selling something you set the price higher than you expect to get, with the expectation that you'll negotiate down to a price where both parties come out feeling like they won.

Honestly, I get why it happens but it doesn't any make it less annoying as a buyer! It's more like a POA than a genuine listing.

But anyway, it all worked out for the OP, so happy days!

Claw Hammer

https://www.boards.ie/discussion/comment/119952731#Comment_119952731

All goods are sold on the basis of buyer and seller trying to psyche each other out. Hoses are no different.

pinksoir

https://www.boards.ie/discussion/comment/119968020#Comment_119968020

Nice one!

yermanhimself

You should have started at £350 K to get it at £360K

o1s1n

https://www.boards.ie/discussion/comment/119968020#Comment_119968020

Congrats! Delighted to hear it worked out for you

blarb

https://www.boards.ie/discussion/comment/119968020#Comment_119968020

Delighted to hear that, best of luck with it, hope all goes well!

whatawaster

Quick update - EA came back to us and told us the Vendor would accept at €370k. We had a think about it and a couple of hours later upped our bid to €370k, so now we will be sale agreed once we pay the booking deposit.

Happy days.

Doc07

Bid as low as you want and do not be embarrassed. For example I wouldn’t see any problem with chancing 300€. I bought an old house that needed ‘some’ work. It’s very difficult to appreciate how much you might need to invest in upgrading an old house. I placed significant underbids on 2 places while house hunting and the EA didn’t dismiss them outright. Also got into stupid bidding war on a completely overvalued house ( in good location) but thankfully bailed out.

Also don’t be afraid to be very assertive with EA and while I would always be respectful , by default having a ‘don’t trust them’ is a reasonable advice IMO

[Deleted User]

https://www.boards.ie/discussion/comment/119967332#Comment_119967332

What are you suggesting? It reads like you are unhappy with buyers bidding for properties and want to prevent it.

RichardAnd

https://www.boards.ie/discussion/comment/119967168#Comment_119967168

Your last sentence is not at all what I suggested.

[Deleted User]

https://www.boards.ie/discussion/comment/119966929#Comment_119966929

No there shouldn’t, the market should set the price for a house, no one is forcing bidders to bid, and it should be up to the seller which bid they wish to accept, which is usually the highest. Why should there be regulation over how much a vendor sells their assets for?

RichardAnd

https://www.boards.ie/discussion/comment/119954104#Comment_119954104

I think that it's important not to conflate an auction with the bidding wars that we see today. In an auction, a bid is binding. In a bidding war, an offer is often just a number, and many agents don't even bother asking for proof of funding before accepting an offer.

Also, there are other factors that come into play in a bidding war. For example, if two people want a house, they will keep bidding out of a desire to not let the other person win. On my mother's road, a house sold for 630k last year when every other house on the road is valued (and selling for) around 500-550k. Many sales also fall through once the buyer sobers up and realises that he/she has well overpaid for the property. This happened recently to a house across the road that was "sold" by that paragon of integrity Auctionera. It went 100k over the asking, and it's now back on the market with another agent.

In short, bidding wars are deleterious in many ways. There should be regulation to prevent them.

blarb

We put a bid on a house 20k under asking. They sat on it for a couple of weeks, no response either way. We had followed up with the EA after a week and was told "thank you for your offer" or something similar but no acceptance or rejection - it was frustrating.

We left it there another week and still no update when we phoned the EA. There were no higher bids. It had been on the market about a month when we put our offer on it with on other offer 20k under ours.

Tbh we really wanted it, we think it'll be our forever home. The EA had mentioned while we were viewing/enquiring that the vendors want their asking price. We in the meantime were going sale agreed on our own house, and after 2.5 weeks of no response, we decided to up our offer 20k to asking price and asked them to respond within a week. They accepted the next business day.

So we basically bid against ourselves, and sure we could have hung on to see what else happened, but we decided we didn't want to risk losing it, and we are in the process of buying it now.

Klopp

OP, sit tight and wait for the call from the EA, give them until Friday and follow up only asking if any update on your current offer. If the EA says the bid was rejected, tell them you think about a new bid and need the weekend to think it over and call again either Tuesday or Wednesday with a new and final offer but remember, you have a budget, and you need to stick to it.

Markcheese

In a way you've nothing to lose ,

As it is , asking price plus realistic refurb costs is out of your budget ,

So pick a price that'd make it work - and offer it with a time deadline - but be prepared to walk If you don't get it ..

Markcheese

Basically what 3 data said above,

I'm surprised the estate agent hasn't gotten back to you ,

If you think your up for it, basically make a "final offer " with a time deadline .. as in - if it's sale agreed by Monday ( or whenever ) then this is what we'll offer , if not we're out ..

[Deleted User]

https://www.boards.ie/discussion/comment/119966265#Comment_119966265

If what I am stating is obvious, what’s your issue? You are dragging the thread away from the topic.

You don’t think bidding strategy is affected when the buyer tells you that they won’t accept your bid, and what they will accept?

kaymin

https://www.boards.ie/discussion/comment/119966205#Comment_119966205

My vendor has effectively said the same thing - they are holding out for asking, meaning they will accept a bid of the ask. You're stating the obvious when stating that you get the outcome of your decisions - which could be overpaying or underpaying or walking away. It doesn't add anything to the discussion.

3DataModem

My advice is to tell the agent your 360k bid will be withdrawn after a week as you are still looking at properties.

I find that viewing a similar place with the same agent can work wonders.

The sellers are cacking themselves right now, as buyers of fixer-uppers are getting nervous. Banks aren't lending without renovation estimates, and contractors are not providing estimates they will stand over forever.

[Deleted User]

https://www.boards.ie/discussion/comment/119966198#Comment_119966198

Your game is not yet the same, your vendor hasn’t come to you yet and said they will accept a bid of €10k below asking, you haven’t yet said you are willing to pay it, but you are stubborn and want to take a chance in holding out. Your strategy could work, but if your game follows the same line as the other poster’s, I’ll say the same to you, you got what your strategy deserved:

Obviously if the poster missed out on the house he “loved” and is “gutted” even though he was willing to pay the price, but wouldn’t due to stubbornness, he is now looking back thinking he did something wrong, he didn’t take the opportunity that presented itself. I dont know if he bought since, if he hasn’t , depending on if he is renting, that’s an extra year of rent, higher house prices and higher mortgage rates.

kaymin

https://www.boards.ie/discussion/comment/119966182#Comment_119966182

I'm still in the game if another bidder comes into the fray. And that's all it is, a game of poker. The bidder did nothing wrong despite what you claim with your choice of words.

[Deleted User]

https://www.boards.ie/discussion/comment/119966178#Comment_119966178

That’s the thing, circumstances didn’t work against him, he was offered the house 10k below asking, he was willing to pay it, but stubbornness meant he wouldn’t, until it was too late and the opportunity was missed. Prices have been surging in Dublin for years, and you have no basis for thinking he would have got the house for 30k below asking having already been told that the bid would not be accepted. This isn’t a case of bad luck.

You could get your house at 30k below, or miss out on the house you love, whichever it is, you deserve what you get, it’s your decision.

kaymin

https://www.boards.ie/discussion/comment/119966131#Comment_119966131

Yeah we all read the previous posts. To say he got what he deserved suggests he did something wrong which he didn't. Circumstances worked against him - if the vendors mother hadn't died he probably would have got the house at the amount he bid. Prices have surged in the past year which benefited the sellers - they could have gone the other way also.

Separately, I'm the highest bidder on a house at 30k under asking but the vendors are holding out for the asking even if it means waiting til Spring. I won't be bidding against myself.

[Deleted User]

https://www.boards.ie/discussion/comment/119965615#Comment_119965615

Meh, when you take the risk, there can be good or bad consequences, it’s no biggy to say you deserve what you get when you take that risk, it’s your decision.

The buyer was willing to sell below asking, the poster was willing to pay it but decided to in his own words be “stubborn”, even though the seller told him they would not sell at the lower offer. In the end the seller got 25k more than what it was offered at to the poster and he was “gutted” to miss out on a house he loved. All’s fair in love and house buying, but considering the difficulty in buying a home in Dublin, and the fact that the poster didn’t say he couldn’t afford it/didn’t think the house was worth it, his “strategy” cost him the house he loved.

Jmc25

https://www.boards.ie/discussion/comment/119963421#Comment_119963421

Quite harsh. The poster took a risk and it didn't work out for them. Happens to most people many many times over the course of their lives.

whatawaster

Bid went in Friday and heard nothing back yet. I’m hoping against hope that the sellers are strongly considering the offer and will ultimately accept.

more realistically, the EA probably just forgot to ring us with the rejection.

What's the best play - play it cool and wait for the EA to come back to me, or follow up and ask for an update?