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

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Comments

  • #102
    Bigmac1euro
    Registered Users, Registered Users 2 Posts: 1,468 ✭✭✭Bigmac1euro


    IAmTheReign wrote: »
    But surely you've just shown that your strategy doesn't work? You've bid on 3 properties and failed to secure them for a price your happy with, all you've done is make the bidding process take longer for whoever eventually ended up buying the property.

    He was still in with a chance of sealing the deal though.


  • #103
    IAmTheReign
    Registered Users Posts: 339 ✭✭IAmTheReign


    Bigmac1euro wrote: »
    He was still in with a chance of sealing the deal though.

    And every time I buy a lotto ticket I'm in with a chance to be a millionaire. My point is he's not being realistic. He's bidding on properties that clearly other people are interested in so why expect to get them for less than market value? You'll be a long time waiting for a house if you're bidding 20% under asking price.


  • #104
    Bigmac1euro
    Registered Users, Registered Users 2 Posts: 1,468 ✭✭✭Bigmac1euro


    IAmTheReign wrote: »
    And every time I buy a lotto ticket I'm in with a chance to be a millionaire. My point is he's not being realistic. He's bidding on properties that clearly other people are interested in so why expect to get them for less than market value? You'll be a long time waiting for a house if you're bidding 20% under asking price.

    Well done, you compared apples with oranges.


  • #105
    [Deleted User]
    Posts: 0 ✭ [Deleted User]


    awec wrote: »
    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.


    And as a competitor bidder I would sense that you are nearing your max and increase at the same rate, comfortable that I can now outbid you
    Vs if you were ALWAYS going up in low incremental bids where I would not have a clue what your budget is


  • #106
    IAmTheReign
    Registered Users Posts: 339 ✭✭IAmTheReign


    Bigmac1euro wrote: »
    Well done, you compared apples with oranges.

    Once again you missed my point. If you're serious about a particular property you don't rely on chance. Of course there's always a chance that he'll have a bid accepted but it's extremely unlikely, as evidenced by the fact that his strategy hasn't worked.


  • #107
    JeffKenna
    Registered Users, Registered Users 2 Posts: 4,572 ✭✭✭JeffKenna


    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.

    Come back to us when that strategy is actually successful.


  • #108
    airportgirl83
    Registered Users Posts: 149 ✭✭airportgirl83


    JeffKenna wrote: »
    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.

    Come back to us when that strategy is actually successful.

    That's actually a very rude comment and I'm surprised the Moderator is not picking it up. Everyone's experience is different and this is a thread to share various opinions and ideas in a civilised way.


  • #109
    JeffKenna
    Registered Users, Registered Users 2 Posts: 4,572 ✭✭✭JeffKenna


    airportgirl83 wrote: »
    That's actually a very rude comment and I'm surprised the Moderator is not picking it up. Everyone's experience is different and this is a thread to share various opinions and ideas in a civilised way.

    You might be better off leaving the modding to the moderators. If you feel a post is uncivil then report it, no need to drag the thread off topic.

    In any case, I don't see it as rude at all. The poster posted their 'strategy' with a track record of losing out on every house they bid on.


  • #110
    airportgirl83
    Registered Users Posts: 149 ✭✭airportgirl83


    JeffKenna wrote: »
    airportgirl83 wrote: »
    That's actually a very rude comment and I'm surprised the Moderator is not picking it up. Everyone's experience is different and this is a thread to share various opinions and ideas in a civilised way.

    You might be better off leaving the modding to the moderators. If you feel a post is uncivil then report it, no need to drag the thread off topic.

    In any case, I don't see it as rude at all. The poster posted their 'strategy' with a track record of losing out on every house they bid on.

    Yes you are rude and you are a bully. I will report it. This is my thread that you are driving off the topic. Unless you have an interesting point to make GTFOH


  • #111
    JeffKenna
    Registered Users, Registered Users 2 Posts: 4,572 ✭✭✭JeffKenna


    airportgirl83 wrote: »
    Yes you are rude and you are a bully. I will report it. This is my thread that you are driving off the topic. Unless you have an interesting point to make GTFOH

    Stones and glass houses come to mind.


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  • #112
    Gumbo
    Moderators, Society & Culture Moderators Posts: 39,783 Mod ✭✭✭✭Gumbo


    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.
    airportgirl83 wrote: »
    Yes you are rude and you are a bully. I will report it. This is my thread that you are driving off the topic. Unless you have an interesting point to make GTFOH
    JeffKenna wrote: »
    Stones and glass houses come to mind.

    Mod Note

    Guys, stop it now.
    No more digs at each other.


  • #113
    Bigmac1euro
    Registered Users, Registered Users 2 Posts: 1,468 ✭✭✭Bigmac1euro


    So people, genuine question.
    What is the best bidding method ? Whats the most effective way of bidding ?


  • #114
    TheChizler
    Registered Users, Registered Users 2 Posts: 9,474 ✭✭✭TheChizler


    Bigmac1euro wrote: »
    So people, genuine question.
    What is the best bidding method ? Whats the most effective way of bidding ?
    Offer the most money :pac:

    Genuinely I believe that's the only thing you can know for sure. Everyone else is going to only go as far as their limit, so offer smallish increments so you don't overshoot their limit and unnecessarily spend.


  • #115
    JeffKenna
    Registered Users, Registered Users 2 Posts: 4,572 ✭✭✭JeffKenna


    TheChizler wrote: »
    Offer the most money :pac:

    Genuinely I believe that's the only thing you can know for sure. Everyone else is going to only go as far as their limit, so offer smallish increments so you don't overshoot their limit and unnecessarily spend.

    That's a very big assumption though that everyone bidding has a set limit and will stick to it. Bidding smaller amounts leaves more room for the bidders that don't to keep bidding the price up as it's *only* 2k each time.

    You also have to factor in the risk that the slower one bids the more time it takes, giving more time for other potential bidders to enter.


  • #116
    Balanadan
    Site Banned Posts: 725 ✭✭✭Balanadan


    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.

    Some people are miserable. If I was bidding against someone who just limped €1k at a time, I'd jump it €5k until they were out of the picture.


  • #117
    the_syco
    Registered Users, Registered Users 2 Posts: 37,305 ✭✭✭✭the_syco


    Bigmac1euro wrote: »
    So people, genuine question.
    What is the best bidding method ? Whats the most effective way of bidding ?
    IMO, if the current price is 50k less than your max and you really want the house, up the bid by 20-25k. The shock may turn off the other bidder. Smaller increments may mean you'll arrive at 25k a few weeks down the road, with both of you still biding for the house.


  • #118
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Bigmac1euro wrote: »
    So people, genuine question.
    What is the best bidding method ?

    There isn't one.

    What works for one is just as likely not to work for another. Each scenario/buyer/seller/agent have their own expectations, methods, prejudices, opinions, personalities, timelines, priorities.

    Some strategies may see you paying more in some scenarios, less in others. Some might frighten off other bidders, others will come back strong.


  • #119
    Rew
    Moderators, Sports Moderators Posts: 8,679 Mod ✭✭✭✭Rew


    the_syco wrote: »
    IMO, if the current price is 50k less than your max and you really want the house, up the bid by 20-25k. The shock may turn off the other bidder. Smaller increments may mean you'll arrive at 25k a few weeks down the road, with both of you still biding for the house.

    We did this and got the place 50k under what it had previous SA for (and fallen through). We made 2 bids and the other bidders lost their stomach for it.

    If the current bit is 450 and you bid 15k they are going to have to come up at least 16k or more which usually requires thinking about more then coming up 1-5k.

    Neighbours have their place up for 200k more then our sale price so cant wait to see how that pans out.


  • #120
    Bigmac1euro
    Registered Users, Registered Users 2 Posts: 1,468 ✭✭✭Bigmac1euro


    Balanadan wrote: »
    Some people are miserable. If I was bidding against someone who just limped €1k at a time, I'd jump it €5k until they were out of the picture.

    Haha! But it totally depends on someone’s circumstances now maybe that’s your way of doing things, I really don’t see how it makes someone miserable though. Again, a classic example of one of the many reasons houses are costing so much. A fool and his money and all that!


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  • #121
    TheChizler
    Registered Users, Registered Users 2 Posts: 9,474 ✭✭✭TheChizler


    JeffKenna wrote: »
    That's a very big assumption though that everyone bidding has a set limit and will stick to it. Bidding smaller amounts leaves more room for the bidders that don't to keep bidding the price up as it's *only* 2k each time.

    You also have to factor in the risk that the slower one bids the more time it takes, giving more time for other potential bidders to enter.
    The alternative is that you're essentially betting that the other person is undisciplined, hasn't valued the house seriously themselves, puts more stock into the increase on the previous bid rather than the total, and is bidding emotionally. Not someone I want to be taking risks against. Either way they'll either come up against a self imposed limit, or they run out of cash.

    Fair point about other bidders coming in, but the other side of it is that a slow bid gives everyone a chance to calm down and reassess, instead of bidding frantically trying to beat the last person.


  • #122
    mcsean2163
    Registered Users, Registered Users 2 Posts: 1,839 ✭✭✭mcsean2163


    Just wondering if it's better to bid by 4% over bidder or a lower percentage for homes in the 800k bracket?


  • #123
    Claw Hammer
    Registered Users, Registered Users 2 Posts: 6,295 ✭✭✭Claw Hammer


    mcsean2163 wrote: »
    Just wondering if it's better to bid by 4% over bidder or a lower percentage for homes in the 800k bracket?

    Forget that nonsense. You need to work out what the house is worth to you and what the current level of bidding is and then develop a bidding strategy. Every bidding process is different. Some owners hold out for too much, others take a lower price for a cash bid. It is better not to be seen to be a messer. Stick to reasonable increments in round figures.


  • #124
    Alkers
    Registered Users, Registered Users 2 Posts: 6,868 ✭✭✭Alkers


    mcsean2163 wrote: »
    Just wondering if it's better to bid by 4% over bidder or a lower percentage for homes in the 800k bracket?

    How many other bidders is there? If it's you and one other bring on the mind games, otherwise just place one bid and wait until the price goes above your budget or there's only you and one other party left


  • #125
    mcsean2163
    Registered Users, Registered Users 2 Posts: 1,839 ✭✭✭mcsean2163


    Alkers wrote: »
    How many other bidders is there? If it's you and one other bring on the mind games, otherwise just place one bid and wait until the price goes above your budget or there's only you and one other party left

    There's apparently one other party.


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