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Bidding on a House

Johnnymac706

Hi folks. I am currently bidding on a house. At first there were 3 of us, now 2 left. I was just wondering, how do you know that there is actually someone else bidding? Do you just have to trust the auctioneer's word? I have a funny feeling, completely unfounded as it is, that there is no other bidder. Is there a way to find out for sure?

Thank you kind folk.

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brokenbad

That's the problem with the Auctioneering industry - poor regulation, no oversight and little transparency.

I trust Auctioneers in the same way i would trust a second hand car salesman.

It says a lot when any Joe Soap can set up his own auctioneering business.

EchoEmber

https://www.boards.ie/discussion/comment/121349953#Comment_121349953

I swear this was 100% how it happened, the EA called me the day he knew I would be going sale agreed and spent the first 5 minute trying to see if I would add another 3K to my offer and after I told him No, then said well I told the vendor these people are genuine and lived in the area when they grew up, hence want to move back etc..

But I will agree it was the vendor that would have wanted more, multiple times the EA told me just last year houses in the estate were going well above asking price. To which I told him, 10 years ago houses will have been going 120K ~ 150k below asking price. Times change, we went sale agree right around the time Tech Giants were laying off people globally. It was a gamble on both sites!

Just to add the EA we dealt with was one of the most nicest one I have meet on our home buying journey.

RichardAnd

https://www.boards.ie/discussion/comment/121350674#Comment_121350674

Or maybe he's just especially Machiavellian in that he can come across as extremely pleasant. Meanwhile, here he is celebrating another house sold 100k over the asking:

Claw Hammer

https://www.boards.ie/discussion/comment/121349953#Comment_121349953

EAs like to get the best price. They will want the neighbour to come to them. Every sale must make another sale or they are out of business. An agent who lets propeoerty go cheap soon doesn't get any to sell.

herbalplants

https://www.boards.ie/discussion/comment/121350779#Comment_121350779

I so agree with your comment. It is not about the extra 45 quid in their pocket but their ego and other potential customers.

EchoEmber

https://www.boards.ie/discussion/comment/121350774#Comment_121350774

Again just saying my experience. Not sure what your situation is, but we spent over a year and a half looking for a house with multiple EA. This guy was nice and a bit decent I thought. But at the end of the day, he is no different to any other sale person.

Former Former Former

https://www.boards.ie/discussion/comment/121350779#Comment_121350779

An estate agent taking three months to get a house to sale agreed stage would be an even worse look. No way he's going to do that deliberately.

This was 100% the vendor being obstinate and holding out for the asking price. Nothing more.

Fred Cryton

https://www.boards.ie/discussion/2058321832/bidding-on-a-house

Yeah you do have to trust them unfortunately. The only thing in your favour is that if they were lying about a bid, and then you said oh that's too much i drop out, then they are left with nothing for their client. So if the auctioneer is going to do that they better be sure it works.

I'd say its more likely they use fake bids at the start to get the ball rolling, rather than towards the end.

Fred Cryton

https://www.boards.ie/discussion/comment/121351294#Comment_121351294

To add to this...their fee is usually 1% so 1% of €500k is €5k, while 1% of €520k is €5,200.

So for the sake of 200 quid extra they are unlikely to risk the whole house of cards tumbling down by lying to you and then you pulling out and going elsewhere. Not saying it doesn't happen but probably more the rogue 10% of agents rather than across the Board. As i said getting the ball rolling with fake bids is more likely as at end of day the agent only cares they sell the place and bank the cash, rather than the final price.

EchoEmber

As a person who recently bought, I am going to add my opinion.

But I believe a lot of EA are terrible sales people and a lot of them have forgotten how to sell! For the last few years, a house sells itself an EA just had to put his/her feet up and see the offers come in.

As long as there is scarcity and the market is stable an EA agent doesn't have to worry about "house of cards tumbling down" as there will always be someone to buy the property. Sure in my case I still have my doubts someone put an offer of €5K more than mine, which went away 3 weeks later, but I still bought the house at the end as I liked it.

Icemancometh

Offering my experience. A house was up for months with no bids. We bid well under asking and out of nowhere other bidders started making offers too. Price went higher than we liked and we dropped out. House went sale agreed and then sold to one of the new bidders and they're living there now.

I think sometimes someone making a bid sharpens the mind of people who had been considering the property.

Johnnymac706

Wow, a lot of responses to this, didn't expect that.

Please tell me if this is stupid...I was thinking of getting a friend involved in early bidding (starting under the asking) and just see what the EA says to him/her. See if they are being told the same thing as ourselves. Then, get them to pull out and see what the EA says to us. Perhaps they will be happy at first that there are two bidders and stick with the truth, perhaps when one pulls out they will choose not to inform us and if the EA doesn't inform us then we will know that we are the only bidders (which is possible with this property).

Would this be stupid?

RichardAnd

https://www.boards.ie/discussion/comment/121357838#Comment_121357838

Interesting. What I'd like to know is whether the EA says the same thing to both parties. It's all a bit guileful, but then EAs are hardly paragons of integrity.

JCN12

https://www.boards.ie/discussion/comment/121357838#Comment_121357838

They will usually ask for approval in principle evidence or proof of funds. Though if your friend has either, could be an intriguing outcome.

[Deleted User]

https://www.boards.ie/discussion/comment/121357838#Comment_121357838

Let me see, you are thinking of getting a friend, who isn’t interested in the property, to place a bid for it, because you are not sure if the auctioneer is being truthful, and you want to know is that stupid?

Yes Johnny, it is stupid.

RichardAnd

https://www.boards.ie/discussion/comment/121358049#Comment_121358049

Very often they don't bother. Online bidding platforms usually do, but what qualifies as proof is fast and loose. I gave Auctionera an AIP document with the loan amount blocked out. They approved it, and I was free to drive up the price on every house on the site :D.

Just an FYI to everyone here. Never, ever tell an EA what your budget is.

Former Former Former

https://www.boards.ie/discussion/comment/121357838#Comment_121357838

In the initial post you said you were in the closing stages of a bidding war. It now seems you're back at the start of the process.

If you lost out on the first house, doesn't that likely indicate there was indeed another bidder?

Oscar_Madison

https://www.boards.ie/discussion/comment/121349617#Comment_121349617

I helped someone buy an apartment property around 2015- prices had yet to take off and bidders weren’t in such big supply as they are now- I made an offer of something like 8k under asking price -while the apartment needed updating location was spot on for various reasons so we really wanted this property- no other bidders- a few days later EA phoned asking if we could go up 3k to a roundy number - I “protested” strongly given the fact no other bidders but I was acutely aware that time wasn’t on our side and give it another month or so, there may well be others in a bidding war- I said I wanted sale agreed if I went up 3k- bid accepted and now proud owners of a property that’s since gone up 62% in value.

Sometimes swallowing your pride is the best way if you know the property is for you- had another bidder entered the “race” I would have had to pay a lot more than 3k to buy that property and there was every likelihood they would, given time.

Im not saying this is the best or only way to go but even had I left it 6 more months to buy a property, prices had risen nearly 20% by then so it made total sense

Oscar_Madison

https://www.boards.ie/discussion/comment/121354209#Comment_121354209

It totally does- especially as you see the price creeping up towards your maximum - I was outbid on a house years ago- best thing that ever happened as we decided it wasn’t for us, especially as we started to have concerns around the aspect position of the house (very dark north facing back garden - we were convinced at the time it was west facing for whatever reason but can’t remember how we made that mistake) - as it happened the bidder dropped out and we were offered the house for our asking price - we politely refused 😀

RichardAnd

https://www.boards.ie/discussion/comment/121361574#Comment_121361574

It's FOMO, pure and simple.

Oscar_Madison

https://www.boards.ie/discussion/comment/121363056#Comment_121363056

That’s something house buyers, especially new ones, really need to become conscious of - and remember the saying, what’s for ya won’t pass ya by.

Id say a lot of house purchases were made due to FOMO

RichardAnd

https://www.boards.ie/discussion/comment/121363160#Comment_121363160

FOMO is a very powerful force that drives just about every market. Humans as a whole aren't that rational, and the emotional drive to "not miss out" can be extremely powerful. For example, how many people bought things like Bitcoin without really know what it is?

However, not to throw the baby out with the bathwater, one must eventually take a leap if they wish to get anywhere. Waiting constantly for the "right house" is probably unwise. I passed up opportunities to buy because they were less than ideal in years gone by, and with hindsight, that was a mistake. It's all about finding the balance between risk and potential reward. My advice to anyone trying to buy a house is that if you afford the payments, if the location is right and if you have a repayment plan, then buy it.

rob316

https://www.boards.ie/discussion/comment/121349617#Comment_121349617

Fair play, great poker face. 5k extra I would of said sure lets do it, but you really held tough despite the risk.

Whetherfleet

I'm of the belief there needs to be a radical overhaul of the buying and selling process. Of course, it won't happen as it doesn't benefit sellers/EA's but there's a massive problem in the market of today, which I will explain below.

A person is in the market to buy a house. A big problem is that they can bid on multiple properties at the same time. Of course, they can only buy one so the other bids are redundant for them. However, they help drive up prices.

Imagine there are 3 properties. There are 3 bidders. Each property can have the 3 bidders bidding against themselves when in fact theoretically (I know it's not the way it works in real life) if the 3 bidders placed one bid on each house, the prices wouldn't be pushed as high.

What I would do, is have a central database of properties for sale. Each bidder has a unique bidder code. When you bid, you enter an expiry date for the bid. You can only bid for one property at a time. These details can be entered into the central database by the EA.

Because currently, you could be in a bidding war with someone else, say you started at 300k and then you and another bidder went up through 5 bids each to 360k. Then the other bidder actually buys somewhere else, but your 360k bid still stands despite the other person who made you bid from 300k up to 360k no longer being interested.

AlanG

I believe i have been a victim of this several times but you needto understand that the EA works for the vendor and their job is to get the highest price they can. The vendor pays for this service. Your job is to get it as far below the top bid you would have been willing to go to. If you accept that you will be a lot less frustrated.

Just set your top bid and dont go above it. Be happy if you get it below that and happy if you dont overpay.

If you want to you can pay an EA to bid for you and give up 1% or so the same way the vendor does.

spaceHopper

I would get a friend to ring up or email and enquire about the house. Don't get them to bid, there could be a 3rd bidder you don't know of and all of a sudden you've proved to yourself that the EA is making up bids that actually do exist.

Keep it simple, bid what you can afford.

One thing you could do is pick an area where there are alot of new builds happening. Second hand homes in those areas that might need work are hard to sell as it's hard to gauge the final cost v buying a new build.

Former Former Former

https://www.boards.ie/discussion/comment/121363160#Comment_121363160

remember the saying, what’s for ya won’t pass ya by.

FOMO is probably very real, but on the other hand, sitting back and just waiting for things to happen because "there's an old saying..." probably isn't a great approach to major life decisions either.

Set a budget, decide on the essentials for your house hunt, and go from there. That's the only sensible approach.

Trying to get inside the mind of the estate agent is absolutely pointless.

Whetherfleet

https://www.boards.ie/discussion/comment/121366148#Comment_121366148

New properties push prices of 2nd hands up imo.

A 2nd hand up for 200k, suddenly a new build just up the road costs 400k. Well now seller will claim someone buying new will pay 400k while you will get to live in the same area for 260k

RichardAnd

https://www.boards.ie/discussion/comment/121366094#Comment_121366094

I'm in agreement with this. I don't know how things could be overhauled, but something needs to be done. Having people take on more debt is deleterious in the long term.

That said, as I've mentioned earlier in the thread, the problem is not totally the creation of EAs. Greedy sellers are just as much to blame as anything else. I think that the wider issue is just the general decline of social consciousness and the rise of hyper-individualism. I'm no communist, but I recognise that the pursuit of the maximum profit, consequences be damned, has led us up the path of ruin, and not just when it comes to housing.

Really, until the outlook of a majority of people changes, things will not improve. I would have thought that 2008 was the wake up call that was needed to get us out of this infinite growth nightmare, but seemingly it was not.

Oscar_Madison

https://www.boards.ie/discussion/comment/121366217#Comment_121366217

I never said “wait for things to happen”- I don’t think you appreciate what that saying means- anyway off topic