advice on making bid

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positivenote

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hey all,
we have viewed a house that we really want, which is great. Thasking price is 335k but when we asked the EA what the highest bid was he said there has been one in for 336k and then another one for 337. We are in the process of seeking mortage approval but have yet to contact a broker and are in the rocess of apointing a solicitor to take care of things for us. We have already met with AIB and they said given our ifo we'd be eligible to get up to 350K and possible more. WE were moreso looking for the same amount but at a 100% mortage.Does this approval "in priciple' give us any leway for putting in a bid?
Regarding the bid should we bid 338k to let the ea know we are interested or should we bid alot higher to ensure we get the property, but run the risk of overbidding????
we really want this property and can affor to go up to about 355k......
PLEASE give any advice you all can as we have a feeling we might miss out on it.
thanks as always
 
Didnt want to post and not reply but thinking back on my 1st experiences as a FTB, I remember our motgage broker (who was great and I think only for his advice the reason why we ended up getting on the property ladder in the 1st place) always said ...yes you are mortgage approved - even if the paperwork isnt in place! If you have been told in principle that you can borrow up to 355k then it sounds like you were safe enough in saying this.

He also advised not to try and show your hand too much if you can possibly help it to the estate agent eg try not to let them know your max limit and to be fairly strict with the offer in that it is limited in a time whereby you wont be held forever with the estate agent holding you for ages while they contemplate it but at the same time to play up the advantages eg your FTB with approval in place who can move as quick or as slow as the vendors may require. This was a good tactic I found in the whole negotiating process...

As for the what should you bid question, if its only recently gone on the market then thats a hard one whether to go in with your highest bid or not. Do you have any idea what houses similar in the area have achieved recently??
 
not sur what prices have been on the recently sold houses, and i have noticed a few that have gone 'sale agreed'. Basically the occupiers want to be out by april and we dont mind the wait.
Its a bit of a problem on what to do regarding making an offer because as you know yourself when you see the house that you think is the one you would be happy in you really don't want to miss out.
Any more advice would be great, even with regard to dealing with EA and how to not be taken for granted.
cheers
 
Don't bid based on what you "can afford" to bid. Bid based on what you think the house is worth. I think this sort of approach is largely responsible for the current rapid increase in house prices - people bidding X simply cos their bank will lend them X, not because they have come to the rational conclusion that the house is worth X.

First and foremost you need to figure out what the going rate in the area is - ring the EAs of the houses that went sale agreed recently. Pretend you dont know they are sale agreed, act disappointed, and ask 'what ballpark did that go for?' - in my experience they will answer, but not if you asked for the exact price.

I tried the approach of coming in with a much higher bid to try win the property straight away a couple of times, it just doesnt work and serves to strenghten the EA's position as they can dangle it in front of the other bidders hoping they'll trump it, while you sit and wait. Best to bid in 2k increments and you'll get to roughly the same end point but its less risky.
 
Hi Positive note - good advise from previous posters to make sure that you have as much information on the house prices, and give as little information awat to the EA regarding finances, but if you are not in a chain - no house to sell to ensure the deal goes through, do let them know this. My advise on the bidding is to increase the current highest bud by 500 euro, and if the price is increased above this, use the same tactic continuosly - lets the estate agent know you are serious, but not blindly bidding to get the house at any cost, and after a stage, his commission is not increased hugely above the asking price anyway, so he does not want to put hug time and effort into running between a few parties if bids are only going up in dribs and drabs - your position with no chain will be impressed upon the sellers as a positive note. With this approach, you could end up having the highest bid, but not end up paying too much over the odds. Best of luck.
 
I'd start by equalling the current high bid, letting the EA know you're ready to buy and move in. They'll tell you straight away if this is a non runner (i.e. if the other bidder is in the same situation as you).

Under no circumstances should you start to up the bid by a significant amount as this will only serve to suggest to the seller that there is something to be gained by waiting for more bids. Your strategy should always be to suggest that bids are maxing out at the current level. If someone else wants to pay over the odds, so be it. But if you really want the house (i.e. it's your dream house) don't lose it for the sake of a few hundred euro. So show your starting hand and see what happens from there.

By the way, if you lose this house, don't worry about it unless you bid more than you thought it was worth. There are lots of great properties out there/ Personally I've been lucky in that I tend to like properties that are not particularly fashionable (at the time of the sale) and more often than not have been the only bidder!

If you look carefully at the market you can spot trends. At the moment it's almost impossible to buy a period property in the inner Dublin suburbs for a reasonable price. 10 years ago it was different, as long as you avoided red brick houses.

There are always bargains to be had if you act counter intuitively. Of course you don't want to buy something you don't like, so don't get TOO counter intuitive!
 
thanks for the advice one and all. we are going in with a bid of 2k more than what the current highest bid is and we will edge it up from there 1k at a time till we reach what we are willing to pay for it. As i've previously stated we are still to get a broker organised but have been told 'in principle' by AIB what we would be intitled to recieve from them... but we are talking to a broker today or tomorrow.
if the sellers accept our bid how much of a holding deposit would we be expected to stump up to make the EA take the property off the market? we are expecting it to be about 4k approx. This will then give us the time to get the property surveyed etc befor putting down the 10%.
is this right as im a little ignorant being a FTB.
tHANKS AGAIN.... fingers crossed:)
 
Are you buying in Dublin? My experience was that the game is played in many different ways. The advice given so far is sound in so far as ensuring you don't pay over the odds. The unknown factor is the mentality of the other bidders. In my experience we always tried to bid up 1,000 or 2,000 at a time. We were always outbid by someone who was willing to put in that 10/15k offer to try and knock the rest of the bidders out. Sometimes we were lucky enough to be in a position to then increase on that large bid by 1K at a time. Many times the same person, or someone new, would whack in a huge offer to try and, again, knock out the rest of us. Many times that final bid would take the property up to the next stamp level, thus ending the bidding.

Be warned there are some nutters out there that have a poker style of bidding and are willing to gamble huge sums to get the property they want. I'm not sure if this is down to a severe lack of understanding of what consitutes 'worth' or a huge wallet in which case 'worth' is meaningless.

On the plus side we actually secured the property we are in the process of buying at a value considerably less than the asking price.

With regards to deposits it depends on the EA, they normally ask for either a percentage or a fixed amount. When handing over the money I would ask them to class the property as sale agreed. There have been occasions that people have been guzumped at this stage in the proceedings.

Good luck it is a huge learning curve, don't lose your head and you'll be fine. Always remember there are plenty of properties out there.
 
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