Bidding Strategy

WeeCuppaCha · 15-09-2020 3:21pm #1

Hoping for some words of advice please.

I have viewed a house that ticks a lot of boxes,
which I intend to bid on. I was informed that I am the first to view. The house is being sold directly by its owner, no EAs involved. I feel it is undervalued (probably strategically) and looking at the market right now, I expect it to reach above asking. Perhaps considerably over asking looking at recent sales...

There are presently 10 other viewings lined up in the coming days. I would believe this to be true. This will, no doubt, be the first 10 of many. The stock in my area is currently woeful. Very, very little available.

So, to my query.. when do I bid and how much do I offer? My gut feeling is to follow up with a ‘thanks for the viewing and keep me posted on any bids after the weekend’ text. Or would I be better just throwing my hat in the ring and make an offer now/tomorrow? Knowing it will most likely achieve offers over asking, should I just go in strong at asking price or just sit back and let someone one kick it off?

Any or all advice welcome!

brisan · 15-09-2020 3:35pm

2 options
Wait and see
Offer asking on the grounds that the property goes sale agreed immediately and is taken off the market
If you are not in a chain or a cash buyer it puts you in a stronger position
If you are getting a mortgage not being on EWSS will also strengthen your hand
Personally I would wait and see
You will have no idea if bids are fake or genuine
Have a max price you are prepared to pay and walk away if that is exceeded
Its not a competition

Dav010 · 15-09-2020 4:11pm

brisan wrote: »

2 options
Wait and see
Offer asking on the grounds that the property goes sale agreed immediately and is taken off the market
If you are not in a chain or a cash buyer it puts you in a stronger position
If you are getting a mortgage not being on EWSS will also strengthen your hand
Personally I would wait and see
You will have no idea if bids are fake or genuine
Have a max price you are prepared to pay and walk away if that is exceeded
Its not a competition

A seller is unlikely to withdraw a property because the first viewer offers asking, but anything is possible. You probably have to bid a lot more than asking if you want the seller to cancel other viewings and withdraw it from sale.

Buying is always a competition, other bidders are the other competitors for the property, in most cases higher bids win, in some cases it is a beauty contest, you are more appealing if you are a cash buyer.

WeeCuppaCha · 15-09-2020 4:11pm

Thanks for your reply brisan.

My position is strong I think; ample AIP with good deposit and public service employee so as safe as anyone is these days. I’ve told him I’m ready to go. I guess I just want to show that I’m serious and interested without coming across too eager. Christ, it’s like dating...

So, does the follow up text sound like a good idea or does it scream amateur?

WeeCuppaCha · 15-09-2020 4:14pm

I would agree Dav010. If I were the seller I’d be holding out for as much as I could get. It’s just a game of when to bid really. Do I let others set the pace or do I get off the blocks early and show my intent to both seller and other interested parties with a strong, early bid...

cruizer101 · 15-09-2020 4:31pm

Unless the seller is in a massive rush to sell there is no reason for them to take it off the market early tbh.
Why not get the most they can, ultimately that is what they will go for. (A cash buyer or first time buyer with no chain might get some small discount but again this is only really if seller is in a rush).

I would be inclined to put a bid in to show you are serious, if you think it is going to go well over asking bid asking or a little under even.

brisan · 15-09-2020 4:33pm

WeeCuppaCha wrote: »

Thanks for your reply brisan.

My position is strong I think; ample AIP with good deposit and public service employee so as safe as anyone is these days. I’ve told him I’m ready to go. I guess I just want to show that I’m serious and interested without coming across too eager. Christ, it’s like dating...

So, does the follow up text sound like a good idea or does it scream amateur?

:D:D:D
Just be careful on the third date and wear your lucky underwear

Canyon86 · 15-09-2020 4:52pm

This is what I did with mine and it seemed to work

House was up for 205K
my limit was 195k

so i started as the first bidder at 185 (rejected)
and worked up to my limit of 195 and held there, bid accepted

During this time i was driving it home that I had approval in principle, a first time buyer no chain etc, ready to move..

good luck with it

Pink11 · 21-09-2020 8:36pm

Can I ask, would an EA lie and pretend they have bids as a tactic to incite impulse bids from an interested party? I'm just conscious we never see proof of bids. Probably part of their sales strategy?

Baby01032012 · 21-09-2020 9:36pm

Pink11 wrote: »

Can I ask, would an EA lie and pretend they have bids as a tactic to incite impulse bids from an interested party? I'm just conscious we never see proof of bids. Probably part of their sales strategy?

No because it would be in breach of their code of conduct and they would loose their psra license. With little to gain. They are required to keep a record of bids which can be reviewed by the psra auditor at any stage.

brisan · 22-09-2020 9:57am

Baby01032012 wrote: »

No because it would be in breach of their code of conduct and they would loose their psra license. With little to gain. They are required to keep a record of bids which can be reviewed by the psra auditor at any stage.

Do you honestly believe an EA would not tell a purchaser about a fake bid
Fake bids happen all the time .
In an auction room its called bidding against the wall
Have you ever or do you know anybody who has seen a list of bids on a property.
I dont and I have asked to see it and been fobbed off
Hence one particular EA used to hate the sight of me or my brothers at a viewing

Dav010 · 22-09-2020 10:43am

brisan wrote: »

Do you honestly believe an EA would not tell a purchaser about a fake bid
Fake bids happen all the time .
In an auction room its called bidding against the wall
Have you ever or do you know anybody who has seen a list of bids on a property.
I dont and I have asked to see it and been fobbed off
Hence one particular EA used to hate the sight of me or my brothers at a viewing

You are the latest in a long list of people who have posted about fake bids, no doubt you have some evidence to back this up. If not, what you posted is no more than speculation.

awec · 22-09-2020 11:07am

People mess around with this stuff way too much and overthink it.

If you like it and are happy to pay asking, then bid asking. If there are counterbids, and you are happy to pay more, then bid higher. The "too eager" stuff is nonsense, nobody can force you to bid, you pick a number in your head that's your max, and the goal is to get to either sale agreed or to go beyond your max and drop out as quickly as possible.

There is all sorts of hocus pocus posted on here, only bid if they'll remove it from the market (won't happen unless your seller is an idiot), don't bid too quickly, don't bid if it's a wet Tuesday morning, bid but tell them they have 24 hours etc etc etc. It's a slow enough process without people trying to make it a game.

WeeCuppaCha · 22-09-2020 11:40am

[quote="awec;114693799It's a slow enough process without people trying to make it a game.[/quote]

Bids are currently at 6% over asking, 4 bidders, myself included. Vendor now talking about going to sealed bids. It’s starting to sound like a game to me right about now.

Dav010 · 22-09-2020 11:45am

WeeCuppaCha wrote: »

It’s starting to sound like a game to me right about now.

Why?

If 4 people are bidding, 6% over asking isn’t a lot. If you feel it is a game, drop out, you’ll know soon enough if it goes sale agreed.

WeeCuppaCha · 22-09-2020 11:51am

Is it not obvious?

It has now become a game in that I now need to put a strategic head on. When you are bidding against transparent offers, you can rise in increments until you reach an offer both you and vendor are happy with.

In a sealed bids situation you are forced to play your best (and final) hand. Oh and throw a few random odd numbers in to the end in case other bidders come up with the same figure, whereby your €253 will just pip them at the post.

Of course it’s a game.

awec · 22-09-2020 12:31pm

WeeCuppaCha wrote: »

Bids are currently at 6% over asking, 4 bidders, myself included. Vendor now talking about going to sealed bids. It’s starting to sound like a game to me right about now.

Just bid the max you are happy to pay for it. Then you’ll either get it, or you won’t.

If you change your mind later you can back out before sending deposit in the worst case. Sale agreed is not binding. It would be fairly dickish and you’ll look like a bit of a tit but it’s still an option.

WeeCuppaCha · 22-09-2020 12:38pm

awec wrote: »

Just bid the max you are happy to pay for it. Then you’ll either get it, or you won’t.

If you change your mind later you can back out before sending deposit in the worst case. Sale agreed is not binding. It would be fairly dickish and you’ll look like a bit of a tit but it’s still an option.

Yeah, that’s where I’m at right now. It’s trying to put a value on it; comparing what it’s worth looking at other sales and what it’s worth to me as a home and meeting somewhere in the middle.

awec · 22-09-2020 12:42pm

WeeCuppaCha wrote: »

Yeah, that’s where I’m at right now. It’s trying to put a value on it; comparing what it’s worth looking at other sales and what it’s worth to me as a home and meeting somewhere in the middle.

Yep, it’s a hard call. Every house will have a different value to each buyer.

The benefit of sealed bids is it will be over quickly, so you can either move on with the sale or move on finding another house. No drawn out process.

scamalert · 22-09-2020 12:47pm

WeeCuppaCha wrote: »

Yeah, that’s where I’m at right now. It’s trying to put a value on it; comparing what it’s worth looking at other sales and what it’s worth to me as a home and meeting somewhere in the middle.

if its not new build also account for all the renovations needed. i seen recently few properties that simply were asking unrealistic amounts out in the country sort of, but then accounting for simple stuff like doing garden, kitchen etc some eletrical/heating and painting easily would be up to 20-40k extra to bring it to modern standards.

people that expect to play bidding games nowadays usually fall short as quite common to see same property few months later back on sale, and then you get ah the buyer fell off etc.

so agree bid what you see its worth, if someone comes back to you with asking you to bid again etc, stick to your offer and keep looking.
mind games and competition crap just adds to issues later on.

brisan · 22-09-2020 12:48pm

awec wrote: »

Yep, it’s a hard call. Every house will have a different value to each buyer.

The benefit of sealed bids is it will be over quickly, so you can either move on with the sale or move on finding another house. No drawn out process.

Exactly
i paid slightly less than it was worth for my first 3 homes but at least 70k over what it was worth for our present and final home
However it was worth it to us and thats all that matters
To the OP
Have a max price and stick to it
Buying a home is more heart than head (BUT LISTEN TO YOUR HEAD ),buying an investment property is all head

listermint · 22-09-2020 12:54pm

WeeCuppaCha wrote: »

Yeah, that’s where I’m at right now. It’s trying to put a value on it; comparing what it’s worth looking at other sales and what it’s worth to me as a home and meeting somewhere in the middle.

Well whatever you do use your head. Don't spend 70k over regardless of if it's forever home or not.

Sensible hat means that you may want to change loan providers in future move mortgages whatever that the LTV is reasonable and you could even have equity in the house .

If you overpay by extremes all these things are harder. And selling it if you have to for whatever reason .change jobs . circumstances .. it will be very bitter pill.

Pay what you think it's worth with a strong eye on actual worth

Casati · 22-09-2020 12:55pm

We are now in a recession. Unless the house has been priced way below what others similar houses have sold for you’d be mad to bid asking. Hold your nerve and keep in touch with the estate agent asking him if any bids are received.

It’s v odd but some folks that are in a good positioning financially (like yourself) are still behaving as if it’s boom time but a huge section of the workforce are out of work and we as a country are running massive deficit. Medium term economic prospects don’t look good with Brexit too

Use your power position and be the last one to blink

WeeCuppaCha · 22-09-2020 1:05pm

Many thanks all, all sound advice, which I’m taking on board. If not this house, there will be others no doubt.

I’m letting my heart have a say obviously, but it’s not the only voice in the room. There’s also the voice that encouraged me to save like a demon for 2 years that won’t let me just blow the lot on a whim.

It’ll be an interesting week or two.

brisan · 22-09-2020 1:07pm

WeeCuppaCha wrote: »

Many thanks all, all sound advice, which I’m taking on board. If not this house, there will be others no doubt.

I’m letting my heart have a say obviously, but it’s not the only voice in the room. There’s also the voice that encouraged me to save like a demon for 2 years that won’t let me just blow the lot on a whim.

It’ll be an interesting week or two.

Thats the way to go

Dav010 · 22-09-2020 1:08pm

Casati wrote: »

We are now in a recession. Unless the house has been priced way below what others similar houses have sold for you’d be mad to bid asking. Hold your nerve and keep in touch with the estate agent asking him if any bids are received.

It’s v odd but some folks that are in a good positioning financially (like yourself) are still behaving as if it’s boom time but a huge section of the workforce are out of work and we as a country are running massive deficit. Medium term economic prospects don’t look good with Brexit too

Use your power position and be the last one to blink

When it reaches the sealed bid stage and there are still 4 bidders, it’s hard to see how your strategy applies. The best the op can do at this point is bid what he/she thinks is the right bid for them, then hope for the best.

Browney7 · 22-09-2020 1:20pm

When the vendor is selling directly like here, presumably there are no protections from fake/phantom bids? It's not like the vendor can be struck off a register or has to keep a written record of bids so a bit more Caveat Emptor at play here.

Best of luck OP, presumably if you're successful you will have an opportunity to complete a survey afterwards and seek to renegotiate price if your survey finds structural deficiencies.

WeeCuppaCha · 22-09-2020 1:22pm

Browney7 wrote: »

When the vendor is selling directly like here, presumably there are no protections from fake/phantom bids? It's not like the vendor can be struck off a register or has to keep a written record of bids so a bit more Caveat Emptor at play here.

Best of luck OP, presumably if you're successful you will have an opportunity to complete a survey afterwards and seek to renegotiate price if your survey finds structural deficiencies.

Yes, that would be my understanding. I will not be signing anything without proper due diligence and appropriate surveys.

Misguided1 · 22-09-2020 1:41pm

we were in a similar position where they wanted sealed bids. Against my better judgement we put in a bid. Over what we felt it was worth but not by much. Went for way more than market value. It needed a lot of work and 5 years later, not as much as a lick of paint on the house. I suspect the buyers went all in and didn't leave much money for renovations. A few weeks later a similar property came up which we bought. Same location, similar condition.

My advice is be prepared to walk away. Someone will get excited and push their offer above what its worth. Something else will come along. Sealed bids are a cruel but opportunistic way of getting an over-inflated bid. They can also fall through....
Good luck

awec · 22-09-2020 1:47pm

Misguided1 wrote: »

we were in a similar position where they wanted sealed bids. Against my better judgement we put in a bid. Over what we felt it was worth but not by much. Went for way more than market value. It needed a lot of work and 5 years later, not as much as a lick of paint on the house. I suspect the buyers went all in and didn't leave much money for renovations. A few weeks later a similar property came up which we bought. Same location, similar condition.

My advice is be prepared to walk away. Someone will get excited and push their offer above what its worth. Something else will come along. Sealed bids are a cruel but opportunistic way of getting an over-inflated bid. They can also fall through....
Good luck

Sealed bids are an excellent system once you are sensible and don't lose the run of yourself. It's a much more efficient method of buying and selling, far better than the back and forth process we do as standard.

Misguided1 · 22-09-2020 1:52pm

Depends on your perspective I guess. A standard bidding process can settle at a reasonable level where people at least see a level of transparency. In sealed bids - there is no transparency and the buyer is likely to pay more than they would have in a regular bidding process. References to paying 70K+ more than market/asking in earlier posts are a good example of this.

Bidding Strategy

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