# €575 asking price -what 1st bid to offer?



## summersun (9 Nov 2007)

wondering how low I should go with a firm first bid, house needs overhaul, very grubby from rental, I have nothing to sell, ready to go, tempted to use the 'its a bit beyond my budget but...' on market for plus 6 months like every other house in that area, 2 similar at 550 -on busier roads-... nearby, OR should i view and make no bid and wait and see if auctioneer gets in touch to offer lower???


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## dieter1 (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

I was in a similar situation and went sale agreed this week on a place.  I got a 24.7% reduction on original price, we bid 100k under what they were looking for and it worked.


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## MrMan (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

View it and if you like it you are in a very strong position. There are very few ready with cash at that price range so you need to use that to your advantage. Now is a good time to buy with some uncertainty still in the market and depending on your area you could get yourself a bargain. Its on the market a long time and I would say that if they haven't at least gone through the effort of making it presentable for sale, they won't get any offers close to their asking.  I would probably open at €500k. This will make them sit up and take notice and your arguments should follow the route of similar property for sale at €550k, needs alot of work, high stamp duty, uncertain market etc etc.


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## summersun (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

thanks, I will start at 500k and include those arguments, I know by the estate, location and setting of the house that I would buy it, decor is changeable and would sooner apply a few buckets of magnolia than pay for recent floral wallpaper decor....


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## camel (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

dieter1, that 24.7% reduction was some achievement, even in the current market. Any particular negotiating tips or tricks? How did you play it?


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## Guest121 (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Savage news report on RTE at the mo.

Goodbody's predict an 8% slump in housing market next year.

http://www.rte.ie/business/2007/1109/economy.html


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## dereko1969 (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

is the report above not typical of one coming from a stockbrokers practise? i'm not saying he's wrong, but traditionally the stockbrokers take a pessimistic property approach (because they want you to buy shares instead) whereas the banks (who are lending for purchases) take a more positive viewpoint. he who pays the piper etc..


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## markowitzman (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> This is big news and a brave position to take.


No it is not in my view. These types of reports are two a penny and invariably not worth the paper they are written when produced by stockbrokers. This is akin to Blodget recommending tech at atmospheric/no p/es in 2000 in an effort to shake out property investors into equities.


> Goodbodies is going to have to downgrade almost all the best selling domestic stock (Bank of Ireland, Kingspan etc.).


This would be big news though albeit most unlikely in view of vested interest!


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## dieter1 (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



camel said:


> dieter1, that 24.7% reduction was some achievement, even in the current market. Any particular negotiating tips or tricks? How did you play it?



vendors had bought already, we had sold our first place, I think that the place was a little overvalued initially, we got a great deal.  We could move quickly, they feared they could never sell the place.


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## Conshine (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

This site gives a good idea on the current trends - supposedly updated every 2 weeks, but sometimes less frequently:

http://www.irishpropertywatch.com/


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## webtax (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



Camry said:


> I can hear the equity sales desk at Goodbodies screaming from here.



probably screaming SELL! SELL! SELL! to their clients, to be followed by BUY! BUY! BUY! in the not too distant future: commission on the double so they won't do too badly out of it!


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## markowitzman (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

or more probably screaming at retail clients to SELL! SELL! to the folks in  the institutions who are waiting to BUY!


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## Thomas22 (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



summersun said:


> thanks, I will start at 500k and include those arguments, I know by the estate, location and setting of the house that I would buy it, decor is changeable and would sooner apply a few buckets of magnolia than pay for recent floral wallpaper decor....



You should start well below 500k. I think 450k should be your starting point
What have you got to lose by going too low? If it is on the market 6 months it's highly unlikely you are going to miss out!


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## camel (9 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Good luck anyway summersun.
I'm facing into a similar situation and intend in the next few weeks (have a couple of properties in mind) to offer way below asking price , we'll see what happens. I'll report back .


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## Steve D (10 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Ask some friends of yours to go along and view the property and get one friend to put in an offer of say €450K, then a couple of days later get another friend to offer say, €440K. This will lower the vendors expectations and they may will think that they will have to make a substantial price reduction to shift it. Then you go in a couple of days later with an offer of €475K. The vendor may then view your offer as reasonable in comparison to the other low offers and is more likely to accept it that if you went straight in with an offer of €475K.


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## webtax (10 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

how things have changed from the phantom bidders upping the prices of houses not too long ago!


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## sam h (10 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Times definately changing....called an EA a few days ago to make a basic query on a property and without even asking for a better price he started to tell me he was sure he could get me a better deal!


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## MrMan (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> how things have changed from the phantom bidders upping the prices of houses not too long ago!



True and no-one seems to take any notice of the fact that the vendor is/could be going through emotional hell throughout this process. 

If you follow Steve D's advice you will prob make the vendor believe there is great interest in your house rather than make them change their expectation. The valuation from the house wasn't plucked from the sky. For people that think that going in €100k+ lower than asking to think that their offer will be viewed as anything other than someone chancing their arm are seriously mistaken.


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## MrMan (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> It is that strange attitude that needs to change in this country before you can start contemplating a normally functioning property market.



Some say strange others would call it realistic. What would you desribe as a normally functioning market?


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## Guest121 (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



MrMan said:


> Some say strange others would call it realistic. What would you desribe as a normally functioning market?


 
I know it's a difficult question to answer but what's a realistic final selling price on a unit priced at 575 in your opinion?


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## DerKaiser (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

No harm in making the offer, just don't limit yourself to one property if you are going down the low balling road!  I'm aware of asking prices that have changed that much over six months.


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## MrMan (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> I know it's a difficult question to answer but what's a realistic final selling price on a unit priced at 575 in your opinion?



It's all relative to location really, but going on the facts provided by the OP, I would say c.520/530k. The house has been on the market 6 months, there is local cheaper competition which to me looks like they are asking for a low price to shift their houses. If they don't move its harder for the vendor in question to sell theirs. All three may end up dropping their price again in 2/3 months if they are all still on the market. Alot of ifs and buts and I'm using all negative scenarios. 



> I'm aware of asking prices that have changed that much over six months.



Is 22% not alot, even in uncertain times especially for a house in this price range?


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## camel (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

MrMan,
I assume what Camry meant by a 'normally functioning property market' is one driven by supply and demand and not underpinned by speculation. Jumps of 20+% per annum is not a normally functioning market and was fuelled by speculation. I think that this is accepted. Drops of a similar amount therefore would be tantamount to a return to relative equilibrium.

I've been house hunting over the past few months and I haven't seen any panic. But what I have seen is houses remaining on the market for ages, in fact, most of the places I've looked at over the past 6 months are still for sale. Therefore, over time if vendors need to sell in order to fund a new purchase then they may be willing to accept an unusually low offer. If they bought say 4+ years ago then there a still sitting on a profit of maybe 10+% per year even if they take a hit on the asking price. That's all we're really talking about here.

Time will tell.


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## Guest121 (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



MrMan said:


> It's all relative to location really, but going on the facts provided by the OP, I would say c.520/530k. The house has been on the market 6 months, there is local cheaper competition which to me looks like they are asking for a low price to shift their houses. If they don't move its harder for the vendor in question to sell theirs. All three may end up dropping their price again in 2/3 months if they are all still on the market. Alot of ifs and buts and I'm using all negative scenarios.
> 
> 
> 
> Is 22% not alot, even in uncertain times especially for a house in this price range?


 
What about a place that's just come on the market at 575? If you were to get a quick sale on that do you reckon it would sell for about 530/535 cos of the way the market is going?


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## Bronte (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Camry - very funny post.  There's no such place and there never will be.


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## pc7 (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

summersun did you put an offer in? if so what for and how was it met?


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## MrMan (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> I assume what Camry meant by a 'normally functioning property market' is one driven by supply and demand and not underpinned by speculation. Jumps of 20+% per annum is not a normally functioning market and was fuelled by speculation. I think that this is accepted. Drops of a similar amount therefore would be tantamount to a return to relative equilibrium.


The jumps of 20%+ per annum were not out of speculation, how can that be true? Surely the levels of housing built in the last 10-15 years would indicate that the market was trying to meet demand, so in essence a supply and demand scenario was in play. I don't see how anyone can back up the reason for such a vibrant market in the last decade was based purely on positive speculation.



> A market where people don't think property prices don't fall


I don't think anyone believes this, it is there to be seen that prices go both ways its the generalisation that is dangerous.



> A market where people don't believe "rent is dead money"


There is an argument there to support both sides.



> A market where people think that they should not have to fork over a non-refundable "booking deposit" to a developer for a non-existant asset, wait two years or more at the developer's whim to deliver and then discover that the finished product is not what was displayed or described on the "plans".


I wouldn't recommend that anyone hand over a non-refundable booking deposit and it is the norm IMO.



> A market where people believe that an estate agent, acting on behalf of the vendor, rather than treating you with undiscuised disdain, should be bending over backwards to please you - the person stumping up the money- the buyer


The estate agent is there to provide a service for their client, the vendor. They should also extend their professionalism to the buyer, but not bend over backwards to please them. The buyer is there to purchase the property and it is the estate agents obligation to negotiate the best possible deal for their client. If purchasers wished to have this service available to them they should also enlist the services of an agent to act on their behalf.



> A market where people can tell the difference between marketing or industry spiel and well formed opinion


Are you confusing a market with peoples ability to be able to read between the lines?



> A market where people don't believe that something is "cheap" because "it doesn't cost as much as it does here", or it "doesn't cost as much as it did last year"



Is this not the case for most products whether it be a PS3 or a washing machine? It's all relative

I don't see how your list points towards a normally functioning market, markets are not run by a strict set of rules.


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## MrMan (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> What about a place that's just come on the market at 575? If you were to get a quick sale on that do you reckon it would sell for about 530/535 cos of the way the market is going?



I guess it would be a tempting offer, but that would depend on the vendors circumstances. If where offered on the OP's house of choice I would imagine it would just about clinch the deal, but you never can tell, some vendors will not buckle at all.


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## DerKaiser (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Camry, your ideas intrigue me.  I wish to subscribe to your newsletter!
Seriously though, bloody good post!


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## camel (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



MrMan said:


> The jumps of 20%+ per annum were not out of speculation, how can that be true? Surely the levels of housing built in the last 10-15 years would indicate that the market was trying to meet demand, so in essence a supply and demand scenario was in play. I don't see how anyone can back up the reason for such a vibrant market in the last decade was based purely on positive speculation.


 
Please tell me you don't believe that over the past 10-15 years everyone who bought houses is the steroetypical 2 parent 2.4 kids family unit who intend to stay in the house for 20+ years.

Specualtion exists in the property market (and exists just as much in a downward trending market as contrarians try for bargains). I'm not saying it's all speculation. The economy has been good, and inflation relatively high, which will of course push prices up. But there is no doubt people have bought properties with little or no attention paid to :

possibility of price fall
possibility (due to price fall) of staying in the house for a longer duration than anticipated (particularly commuter towns) as they cannot trade up.
rental yield
What I'm saying is lots of us ordinary punters, armed with no better knowledge of fundamentals of the property market other than 'it's going up'!, have become amateur investors recently. I think the credit crunch shake out will have an effect across the board, but I don't have a crystal ball and I won't speculate on how much.


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## MrMan (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*



> Please tell me you don't believe that over the past 10-15 years everyone who bought houses is the steroetypical 2 parent 2.4 kids family unit who intend to stay in the house for 20+ years.



Of course there was speculation and a heavy dose of investment, but there was also a great demand. I don't think that you can generalise the astuteness of amateur investors though as many have proved to be very prudent.



> But there is no doubt people have bought properties with little or no attention paid to :
> possibility of price fall
> possibility (due to price fall) of staying in the house for a longer duration than anticipated (particularly commuter towns) as they cannot trade up.
> rental yield



I guess this could be said about any investment that has a feel good factor, be it eircom shares, property etc. There is always a risk in investment, but I feel alot (most) of the posts lately have a very negative twist and it looks like those same fundamentals you speak of are being used now as in 'it's going down'.


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## camel (12 Nov 2007)

*Re: 575 asking price -what 1st bid to offer?*

Of course plenty are prudent investors.
But I firmly believe most of us (including myself) were not prudent at all, but just jumped on the bandwagon and happened to see a price increase.
I have to say, if I was putting 300K into shares I'd do alot more analysis than I did when I bought my house 4 years back

By the way, I'm one of those commuter belt buyers I mentioned earlier. I bought in Meath (because I thought it was the thing to do). The commute was horrendouns (7am -> 8pm) so I rented the house out and rent now myself also in Dublin closer to work. I wasn't financially intelligent then but I'm better now. 

What I'm saying is alot of people will have done well from the property boom by default. The fact that it's correcting itself a little is not unexpected. There's also no need to panic, most people, excepting those who bought last year, should be sitting on nice profits.


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## Brendan Burgess (6 Dec 2007)

*Re: 575 asking price -what 1st bid to offer?*



dieter1 said:


> I was in a similar situation and went sale agreed this week on a place.  I got a 24.7% reduction on original price, we bid 100k under what they were looking for and it worked.



Dieter's story was featured in today's Irish Times with mention of askaboutmoney. 

Well done.

Brendan


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## Pantone (7 Dec 2007)

*Re: €575 asking price -what 1st bid to offer?*

I read the article yesterday in the Times.  I thought it was great!  Gave me more confidence too with regard to putting in offers on houses (I'm a FTB) - especially on properties that seem very overvalued in the current market and have not reduced their asking price even though they have been on the market for several months.  I think generally that there is much better value for money out there now, although some estate agents are refusing to acknowledge the change and will not budge on price.   But it was great to hear Dieterl's sucess story nonetheless. It gave me hope.  Well done!


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## Pantone (7 Dec 2007)

*Re: €575 asking price -what 1st bid to offer?*

Thanks for the advice MrMan - it's greatly appreciated. I need all the help I can get!  

It's not that we just assumed that the price should be 100k under given the market and hearing of other people's storys, but there were certain things missing from the property that made the price seem too high - particularly in comparison with similar or bigger sized houses in the general area.  Upon commenting about this to the estate agent, they informed us that they had a great reputation of securing high prices for property in that area and that they wanted to ensure the same in this case for their client.  So that's why I assume it's the estate agent that is holding up the high price and refusing to budge and not necessarily the seller. It's like they are basing the price on what they got for houses in the same street this time last year and are refusing to take into account the current change in climate.  The price has remained the same for several months now and as far as I am aware, no offers have been made and the vendor has now moved out and into their new house.


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## Brendan Burgess (7 Dec 2007)

*Re: €575 asking price -what 1st bid to offer?*

Pantone said:



> So that's why I assume it's the estate agent that is holding up the high price and refusing to budge and not necessarily the seller.


 
I haven't heard anyone suggesting this before.  The estate agents are trying to make sales. They are doing their best to encourgage their clients to reduce the price.


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## mercman (7 Dec 2007)

*Re: €575 asking price -what 1st bid to offer?*

Estate Agents will not allow their clients to reduce the prices and advertise the fact. We all are dealing with entities that are selling something they don't even own, and they work on Commission - so the higher the price the more they earn. Most resi EAs are not qualified about property. They know more about colour schemes than Planning Permission or Snag Lists. 

The newspapers have made a killing over the past 10 years thanks to the property advertisements been directed by the Estate Agents. The EAs charge one price for newspaper advertising and pay a much lesser figure to the papers. It is an industry that stinks. I am in the Property business and detest Residential Agents with a passion. I could write a book on occurences which have happened to me.


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## summersun (8 Dec 2007)

*Re: €575 asking price -what 1st bid to offer?*

Update: I offerred 60k under asking and after holding out for many, many days, and much brow beating from a senior auctioneer, sale agreed at 50k under asking on Friday, (in October an estate agent sold another property at 50k under asking that I was also interested in - without referring back to me- as he appeared to want to bounce me toward another property on his books....incredible)the houses that reduce price substantially, behind the scenes, are selling


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## mercman (9 Dec 2007)

*Re: €575 asking price -what 1st bid to offer?*

Congratulations. When the deal is signed you should advise the Agent who wouldn't refer your previous offer that you intend to report him.


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## MrMan (10 Dec 2007)

> Estate Agents will not allow their clients to reduce the prices and advertise the fact


Interesting fact, I didn't realise we wielded such power.



> We all are dealing with entities that are selling something they don't even own, and they work on Commission - so the higher the price the more they earn



The flipside is also argued, 'why would they look for an extra €10,000 when it only represents an extra €100 to the agent', seems Estate agents are on a hiding to nothing in this argument.



> Most resi EAs are not qualified about property. They know more about colour schemes than Planning Permission or Snag Lists.



Another interesting fact, backed up by what?, your obviously balanced views on the subject.



> The EAs charge one price for newspaper advertising and pay a much lesser figure to the papers.


Generalised and correct I'm sure in some cases, but not in all.



> I am in the Property business and detest Residential Agents with a passion



You'd never have guessed!



> When the deal is signed you should advise the Agent who wouldn't refer your previous offer that you intend to report him.



For what, appearing to want to 'bounce' him towards another property?


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## Quest (10 Dec 2007)

A house can only be valued at what some one is willing to pay for it, property values have been way over inflated over past few years, so why not go in a E100k below asking, if no one is willing to pay any more??


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