# Bidding for a house



## firsttimebuy (30 Mar 2006)

I am currently bidding for a second hand house that I really want but everytime I put in a bid with the estate agent he comes back nearly straight away to say there is another bid against me for €1,000 more. I have increased my bid twice now but I don’t want the price of the house to spiral out of control. Is there anything I should be doing or any questions I should be asking? I don’t have any experience in this so any advice would be very helpful.


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## deem (30 Mar 2006)

Have you offered the asking price of the house?

should say FTB myself, but thats what comes to mind.  sorry not really much help


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## Petal (30 Mar 2006)

Nothing really you can do other than hope that the other one gives in first. Just decide on the max you're willing to pay and you think the house is worth and let it go if it goes beyond.
Sometimes it depends on whether you're close to SD cut-off points - a lot of people don't want to go beyond, so sometimes this is where it stops.


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## Dunners (30 Mar 2006)

It is very hard to know whether the estate agent is calling your bluff or not... and if it's a house that you've really fallen in love with, it's easy to say to yourself that you're not going to lose it for the sake of 1 or 2 grand....

however, you really do need to set yourself a maximum limit, based on what you can afford (remember to consider stamp duty, furnishings etc in your costings), and also what you believe the house is genuinely worth.

best of luck!


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## Newbie! (8 Apr 2006)

Just in response to this, I've noticed of late that alot of the 2nd hand properties we are looking at are guiding somewhere between €330 - €360k. Alot of the bidding occurs _very_ quickly after the fist viewing and it tends to stop at the €380k mark alot as most people are unwilling to enter into the 6% stamp bracket.

So my predicament, I have just seen a house today that I am hoping to bid on first thing monday morning..as a FTB I have a max spend of €380k as well. The house was guiding €360 and whilst I do think it will go well above the €380 mark, I at least want to get in there and bid. So the question, do I just jump in and bid my max. of €380K or do I bid the asking price first and run the risk of someone hitting the 380k mark before I even have the phone down? 

unbelievably fast market now and I want to have my say in it!

Any ideas?


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## Petal (8 Apr 2006)

Hi newbie, I've come across this a couple of times that buyers even put in a tentative offer before they had seen the house with a view to confirm it at the first viewing. I went and saw a house and put down the 381K straight away and I was in the lead for a good while but eventually someone came in with a  higher offer and I lost out. The place I ended up buying I ended up in the 6% bracket, but as you've said a lot of people don't want to go there, so the first one that gets their offer in at the cut-off has some advantage at least.  Ring up mon morning and see what they say. Quite often they receive offers on the same day of the first viewing, so if they have already some in on mon morning, you could ask how many parties have put in offers, and based on all that you could decide to go in full whack... In the end it's your decision, but I've done it myself and it almost worked...


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## Newbie! (9 Apr 2006)

Thanks Petal,
The 6% stamp is just not an option which can put you in such a bad position...it's all aobut competing at this point.

Calling the EA in the morning so will post here again as to what happened. Fingers crossed!


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## 3CC (9 Apr 2006)

Am I wrong in thinking that you can always pull out of a purchase even if you have made the highest bid and it is accepted. If this is so, why not keep bidding without worrying too much and when your price has been accepted, then take some time to decide whether to go ahead or not. A bit like reverse gazumping!


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## Newbie! (9 Apr 2006)

I'm assuming the same dmkelly..not really for the purposes of bidding to high levels but I assume that you dont bother calling a surveyor out unless you are really serious about the property....obviously you can pull out then at that point if you want? I'd imagine it goes to the next highest bidder then? Anu insight into this would be good though...


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## ninsaga (9 Apr 2006)

dmkelly.......do not do to others what you would not like done to you..... this is totally unfair on other bidders.. if you have no real intent on buying, then all you are doing is driving up the cost & potentially driving others out of their dream home.

I have been a recipient of that particular tactic and it is not pleasant


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## Murt10 (9 Apr 2006)

When we bought our house way back when, we agreed a price of 64,000 with the EA. Once you went over 60,000 at the time, you went into a higher stamp duty rate.  We  actually paid 59,500 for our house and agreed to pay 4,500 for the  contents.  We made a considerable saving by doing this. the  seller didn't care as he still received  64,000.

Has this loophole been closed off? 

Murt


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## Newbie! (10 Apr 2006)

Thanks Murt10,

I didn't think of that to be honest but would hold the thought alright if/when it gets necesary. i think this particular property is going to go way above our means but perhaps the next one we find.......

thanks...


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## Newbie! (10 Apr 2006)

Just to update this thread, I called the EA this morning at 9:05 and was told that there was already a bid on of €381k. when I asked when it was made, I was told at the viewing on Saturday. I distinctly asked the EA on Sat, what was the procedure on making a bid and he told me I would have to wait until Mon morning to make a bid.......so how did he accept a bid from someone else?

Is this normal that verbal bids are made during viewing times?


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## annR (10 Apr 2006)

I wonder what the EA will have to say about that, I'd be furious.  It seems to be a race to bid 381k first, so if you can afford it, just go to 381k.  Play every card you have - ask if the other party are in a chain and what the situation of the vendor is.  They may be looking for a quick sale rather than being delayed by the chain thing.


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## Newbie! (10 Apr 2006)

Sorry Ann, what do you mean a "chain"? I am really annoyed. It's all a leaning curve right now and it doesn't help when there's a different story for every house, vendor and EA!


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## budapest (10 Apr 2006)

A chain is when the other bidder has a house to sell as well, which may delay the purchase.  If he's in one and you're not, then you are at an advantage.  It's probably unlikely if the house is around the 381k mark but worth asking.


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## Shakespeare (10 Apr 2006)

Murt10 et al.....

I


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## Shakespeare (10 Apr 2006)

Murt10 et al.....

I have to post on this stamp duty issue mentioned above. The breaking up of the purchase price to avoid paying a higher stamp duty rate IS ILLEGAL. It is not allowed, it is NOT a loophole. The figure on which stamp duty is based is the total consideration for the property. Stamp duty is calculated on the value excluding any value assigned to contents but the FULL all inclusive price is used when determining the RATE of stamp duty payable.
It is a recipe for disaster if you bid on this basis above a level which you can actually afford.

Apologies if this sounded like a rant but it's a real bug bear of mine these notions and schemes that get bandied around.

S


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## ninsaga (10 Apr 2006)

On the contrary Shakespeare.. thanks for clarifying.

ninsaga


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## Sarah W (10 Apr 2006)

If you aren't sure the EA is being completely honest about bids on a house a useful trick is to get a new 'interested party' (a friend or colleague) to ring them and ask what the current bid is on it - the agent is more likely (IMHO) to tell the truth to a potential new buyer than to someone he/she knows is very keen to buy and therefore may be tempted to overbid.

Sarah

www.rea.ie


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## Newbie! (10 Apr 2006)

I did do that this morning and the EA told them that the house had now gone to €385k. i'm sure that doing that actuallly told me anything. It was a house that would easily have gotten that sort of bid quickly...this one just wasn't meant to be!


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## kaiserpiggy (10 Apr 2006)

Just wanted to reply with some positive thoughts for you... have been going through the same thing myself for the last 1year+ and it was always hard to know what way to bid (emotions often get in the way!)

We were outbid time and time and time again using so many different tactics that we eventually came to the conclusion that all other bidders will go as high as they can / are willing to pay, no matter how tactical you think your bids are. 

I got a lot of good advice on here - stick to your upper limit, bid with your head and not your heart, be focussed & confident and the right house WILL come along for you in the end. Hey I am proof, we just got Sale Agreed on the best house of the whole lot we bidded on, and it was relatively easy, only a few quid over the asking price.

And keep looking on AAM, priceless advice.. (fingers crossed I don't get gazumped!)


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## 3CC (10 Apr 2006)

ninsaga said:
			
		

> dmkelly.......do not do to others what you would not like done to you..... this is totally unfair on other bidders.. if you have no real intent on buying, then all you are doing is driving up the cost & potentially driving others out of their dream home.
> 
> I have been a recipient of that particular tactic and it is not pleasant


 
I guess you are right ninsaga, it's just a bit tempting when builders and EA's often seem to have no scruples. 

I notice your sympathy did not extend to the above two groups who would be equally unfairly treated by my proposed methods!


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## Newbie! (11 Apr 2006)

Thanks for the postivism kaiserpiggy

We have found a house guiding €345k and currently have a bid in at €355k. We have an upper limit of €381k and will go to that if necessary but I just wonder at what point are you actually bidding more than the house is worth. I mean in the greater scheme of things, I would continue to rent as opposed to paying way over the odds for a house which I will possibly not get the same return on?


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## Howitzer (11 Apr 2006)

Game Theory describes this scenario pretty well. It's whats known as 'The Winner's Curse'.


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## Mouldy (11 Apr 2006)

We (Myself and the missus) are about to close on a house. We are FTBs and my conclusions about the bidding process are that once you have an upper limit defined, be prepared to pay it. If you get a good property for less then thats a bonus.

Do not go above your upper limit. In most cases you will not be able to do this anyway (hence the term upper limit!) 

IMHO, the upper limit should be based on what you can repay, not what you can borrow, stress tested to at least a 1% increase in rates above the current ECB rate. 

And remember, in Dublin in particular, there is a large element of luck involved. No matter how much money you have, there are plenty of people out there with more and they can outbid you without batting an eyelid. The day you get sale agreed is the day that your bid was accepted due to no one else bidding on that particular house. Maybe it wasn't suitable, maybe they didn't know about it, maybe you're an FTB and the vendor is in a chain. To this end, perseverence and research are the key. Good luck.


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## Tarquin (12 Apr 2006)

From


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## Newbie! (13 Apr 2006)

I appreciate all the positive comments but it's very hard to keep the chin up. I'm not sure if anyone else has noticed but people are actually jumping to the €381k mark on houses before the first viewing...I dont particularly want to go into the 6% bracket but it does look like it might be inevitable at this point!

We have a bid of €388k currently on a house which has to date had 2 viewings. I know it's up to the EA's discretion but normally how many viewings will there be?


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## sun_sparks (13 Apr 2006)

The EA can have as many as they want - it all depends on how quickly the vendors want to sell.

When we were buying we were top bid for 3 weeks!!!! Very frustrating, and it's harder when you are top bid after the first viewing. We also ended up upping our bid out of sheer impatience (which I don't regret, mind, because I think the sellers were holding out for a particular price).


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## *Isabel* (25 Apr 2006)

Second what Sarah said about getting another party interested. We're currently bidding for a site. Our offer of 287 was already well above the asking price of 250 and EA called the hubbie to let him know there was another offer of 290 on it, so I rang myself as an independent party and was told the highest offer at the moment is 288... have the sneaky feeling we've been bidding against ourselves, mind you, it only came on the market last week so it's early days. I reckon they're expecting for it to reach the 300 mark and will keep playing the game till they get it....

Do EA have any respect for the value of money and the need of housing? boils my blood!!!

Isa.


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## golden mean (25 Apr 2006)

Just another thing to take into account: if you are going up in increments of 1K it can sometimes be worth a try to jump up in a bigger increment because (a) it might scare off another bidder and (b) it can ensure that the other party will be the one who has to go over 380 first, not you. 

Also, as one who has experienced selling a home, I too started out with the idea that EAs put in phantom bids etc but, once I had seen it from the other side I realised that most of them don't have that much imagination. They are basically out to earn their commission for as little work as possible and don't forget that a few grand on the price makes little or no difference to what they earn, but might delay it into the next accounting period and make their results look bad! 

As a buyer (admittedly two years ago) I got the distinct impression that some EAs did not want to show homes to us as a potential new bidder because they knew the vendor was about to agree to the current highest offer and they wanted to close the deal. (Being a FTB is a big advantage to you in this context because you can potentially close faster and they will get their commission faster- remember they want what is best for THEM, not for the vendor (and certainly not for you!))

(Usual apologies to any EAs reading- sure you are the exception to my cynical observations...)


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## Newbie! (26 Apr 2006)

I feel the need to reply to this for other people in the same boat..

I mentioned before that I felt everyone was racing towards the €381 marker straight after the first viewing and it meant that many houses were out of our range before we had even finished looking at the garden!

Anyway, as much as it bugged me that people were doing this, we felt it was the only way to stay in the race so when we lat viewed a house (1st viewing admittedly), it was guiding €360 and we went straight in with a bid of €381k. The second viewing is tomorrow so please god, no one else will come in above that. It does appear to be the only way to stay in the competition!


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## delgirl (15 May 2006)

golden mean said:
			
		

> Also, as one who has experienced selling a home, I too started out with the idea that EAs put in phantom bids etc but, once I had seen it from the other side I realised that most of them don't have that much imagination. They are basically out to earn their commission for as little work as possible and don't forget that a few grand on the price makes little or no difference to what they earn, but might delay it into the next accounting period and make their results look bad!
> 
> ...remember they want what is best for THEM, not for the vendor.


 
I'm beginning to believe this is true. We are currently selling for the first time in Ireland and are not sure that the EA is acting in our best interests.

House on market for €275,000, within a week two interested parties had gone up to €295,000 and €296,000. We accepted the lower offer as they had loan approval and the higher bidder was in a chain and had only just gone sale agreed. The EA took the property off the market, i.e. off myhome.ie and told people calling that the property was sale agreed, but didn't get a deposit from the buyer. The buyer pulled out a week later and when the other bidder was contacted, he dropped his offer back to €275,000.

I got a friend to call the EA today with an enquiry about the house and they got the whole long convoluted story that there were two bidders, the price was up to €295,000, one pulled out and the price is back at €275,000 again. I think this is very unprofessional / negative of the EA to tell potential new buyers that it had been sale agreed and the sale fell through - why didn't they just say that it's new to the market and there is a current bid of €275,000?

Is it also normal practice to take a house completely off the market when just a verbal offer has been received? Surely this wouldn't be wise if a deposit hadn't been paid?

We've gone with a large nationwide EA and are astounded at the way in which the sale is being handled - although, never having sold in Ireland before - perhaps this is the norm?


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## Witchfinder (15 May 2006)

delgirl said:
			
		

> Is it also normal practice to take a house completely off the market when just a verbal offer has been received? Surely this wouldn't be wise if a deposit hadn't been paid?



I wouldn't have thought so. A house isn't 'sale agreed' until the deposit has been paid. I take it they didn't alter the 'For Sale' sign at that stage?



> We've gone with a large nationwide EA and are astounded at the way in which the sale is being handled - although, never having sold in Ireland before - perhaps this is the norm?



If it's the large, nationwide EA I'm thinking of, I wouldn't be surprised. From my experience there's a particular one which seems to be far worse than any of the others, although obviously that's not the kind of thing that can be proven (so no names!).


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## bambino (15 May 2006)

Before placing another bid it's very easy to ask for proof of the other bidder. If the estate agent is honest they'll have no problem doing this.


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