With property purchase being so expensive these days it might be worthwhile to share people's approaches to bidding and tactics that might be useful.
www.daft.ie give the following advice:
You perfect home may be perfect for other people too and this can lead to bidding wars. Here are some strategies that can help you to win the war.
Bidding wars can sometimes move very quickly. Keep an eye on your phone and emails so you don't miss any updates from the agent.
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www.myhome.ie provide the following advice:
In order to buy a home you have to make a bid.
The selling agent will advise you on the asking price of a property and if there are any existing bids on it.
If a property has been on the market for a while you could be lucky and have a bid accepted either below or at the asking price.
Quite often if there is more than one offer on a house, the asking price will shoot up. At this stage you need to decide whether you want to be part of a bidding war and how high you want to go.
That house you had your eye on for €200,000 might have been well within your budget but if its asking price ends up at €50,000 above this then it might be beyond your means.
If there is bidding back and forth on a property it’s best to determine your upper limit and stick to it. That might mean you miss out on that property but there’s no point in overextending yourself as this could eat into your ability to repay your mortgage or into your budget for decorating the place afterwards.
Some tips for the bidding process are as follows:
http://www.dnggalvin (www.dnggalvin) give the following advice:
You know the scenario. The hardworking couple scrimp and save to build up their savings. They forego the holidays, the nights out and the streaming accounts to become experts on the local property market, the Central Bank’s mortgage lending rules and the support schemes available to home buyers. After securing mortgage approval and finding their dream home, in a welter of excitement they submit their first bid.
Sadly, this is often where the couple’s ardent hopes crash head on into a) the realities of the Irish property market and b) the intricacies of the bidding process as they find themselves entangled in a competitive web of bids and counter bids.
As we all know the key issue at the heart of Ireland’s housing crisis is that the supply of housing, while increasing still falls far short of what our growing population requires. According to a recent report by property website Daft, the number of second-hand homes on the market in 2023 was down 27% on the previous year. While circa 30,000 new homes were built last year, most commentators believe we need to be building up to twice this number. On the other hand, demand continues to surge fuelled by a growing population, a robust economy, and a shortage of properties to rent.
It is this imbalance which lies at the heart of bidding wars where numerous buyers vie for the limited number of properties available. So how does it work?
Of course, one of the key questions which emerges for underbidders at this juncture is how can they be sure that they are not bidding against themselves? ie that there is indeed another bidder. The key lies in working with licensed agents who adhere to a code of conduct and who have to keep a record of all offers received on a property. This record can be inspected by the Property Services Regulatory Authority (PSRA), the body charged with regulating estate agents and ensures that the bidding process is carried out in a transparent and regulated environment.
If suspicions arise about phantom bidding, buyers can contact the PSRA to file a complaint, triggering an investigation. It is crucial for buyers to recognise that the vast majority of agents operate ethically, and safeguarding the integrity of the bidding process benefits all parties involved.
GDPR is the main reason identities of bidders are not disclosed. If one submits a complaint an investigation will be initiated. While it will probably be too late to affect the sale of that particular property. If something untoward is uncovered, action will be taken against the agent, and this is really important for raising standards and maintaining best practice.
The other key question for bidders of course is how high can they go? While the advice on this can vary – and in the end will be determined by people’s different personal circumstances and approach to risk – most experts say mortgage repayments, including insurances should not exceed 25 to 28% of your gross monthly income.
While the person who submits the highest bid usually succeeds in securing the property this is not necessarily always the case. Very often bidders are involved in selling their own property and will need to complete the sale of their home before they can finalise the purchase of the property they are bidding on. And of course, potential buyers and bidders on their property will be involved in ‘chains’ of their own also. This is where cash buyers have a clear advantage and if the agent knows that the vendor would like a quick sale s/he may guide them to accept their bid, even if it is lower.
Gazumping, where a seller accepts an offer but backs out when they get a higher bid, doesn’t seem right – particularly when you are the party being gazumped – but it is not illegal. A vendor can withdraw from a sale without repercussions, and buyers who have gone ‘sale agreed’ can sometimes be devastated weeks later to discover another party has made a higher offer.
Another issue of the current system is that it potentially allows buyers to go ‘Sale Agreed’ and put down deposits on various properties, through different agents, which are fully refundable with no protection for the seller. These shortcomings need to be addressed.
Purchasing a property in Ireland is often a long process involving numerous false dawns.
That’s why understanding the intricacies of the bidding process is essential. Late last year the Taoiseach announced an expert group will examine the process of how people buy homes in Ireland and the obstacles they face. Hopefully that group will address some of the shortcomings we’ve identified here.
But by understanding the process, working with licensed agents, staying informed, and utilising regulatory bodies when needed, buyers can navigate the process with greater confidence and hopefully turn the dream of homeownership into a reality without unnecessary heartache.
www.daft.ie give the following advice:
Here's how to win a bidding war
You've searched for months, have secured a mortgage from a bank and now you've found your dream home. What can go wrong? Well, there is one thing standing between you and your home: other buyers.You perfect home may be perfect for other people too and this can lead to bidding wars. Here are some strategies that can help you to win the war.
Have your documents ready
To start bidding the estate agent may ask for your mortgage approval document. This is given by your lender and it details some of your personal information, the confirmation that the lender has approved your mortgage and it specifies the amount you will be borrowing.Make the biggest offer
This may sound obvious but many people who offer the highest amount win the properties... but not always. Always keep your maximum budget in mind and don't offer more than you can afford. Bidding wars are stressful and can be very emotional, so make sure you know your limit and when it's time to walk away.Write a personal letter
Many sellers feel sad about leaving their home and want to pass it to someone who can also make great memories there. Writing a personal letter can show how you will use the home and what an asset you are to the community. We suggest writing some details about yourself, why you love the property, why you want to live in the area and mention why your offer may not be the highest.And finally, be available
Bidding wars can sometimes move very quickly. Keep an eye on your phone and emails so you don't miss any updates from the agent.
============================================================================================
www.myhome.ie provide the following advice:
The bidding process & tips
In order to buy a home you have to make a bid.
The selling agent will advise you on the asking price of a property and if there are any existing bids on it.
If a property has been on the market for a while you could be lucky and have a bid accepted either below or at the asking price.
Quite often if there is more than one offer on a house, the asking price will shoot up. At this stage you need to decide whether you want to be part of a bidding war and how high you want to go.
That house you had your eye on for €200,000 might have been well within your budget but if its asking price ends up at €50,000 above this then it might be beyond your means.
If there is bidding back and forth on a property it’s best to determine your upper limit and stick to it. That might mean you miss out on that property but there’s no point in overextending yourself as this could eat into your ability to repay your mortgage or into your budget for decorating the place afterwards.
Some tips for the bidding process are as follows:
- Never bid on a property while you are at the property, always walk away, you can show interest and say you’ll be in touch, but offers there and then serve you no purpose other than to scream out “I’m eager and inexperienced!”
- Try to slow down any counterbidding process. Sometimes, unfortunately, you’ll have to face down other bidders, don’t ever make more than one counterbid in a day. Whipping up a storm is an estate agent speciality, don’t get caught up in it. Say whatever you need to in order to delay, but try not to get into a “fast bid” situation, you’ll always pay top dollar by letting that happen and if you lose it just bids up the clearing price of other properties in the area which may be your “plan B”.
- If you counterbid pretend it’s like a punch, if you are going to bother throwing one at all then make sure your intended target gets knocked out. Going up in €1,000 sums creates a dynamic that can often end above where things would have settled if you had gone up by €5,000 in the first place.
- Know your upper limit, getting over-extended on a purchase is a mistake, know when to accept you have lost.
- Look at lots of property, the more you do the more you realise there are lots of great places for sale. There is a huge risk of getting too focused on “the one”. If that happens you risk becoming the buyer equivalent of Jennifer Jason Leigh in Single White Female and any estate agent worth their salt will make you pay for that . . . dearly.
- If you ever suspect the estate agent or seller isn’t being totally upfront, walk away if you can. Don’t do deals with people you don’t trust unless there is no alternative (which is rarely the case).
- Put timelines on any conditions and stick to them, if you make an offer that is only good for 48 hours and requires a “yes” or “no” answer, then stick to that timeline.
- Seasonality can be a factor. The market is quieter in December and January so if you can hold off until then to place an offer then it could work in your favour.
- With a trend for prices to go above asking prices don’t bother with places that are right on the cusp of what you can afford, although this doesn’t apply everywhere. In a falling market you can afford to wait, it makes sense to do so, you can make demands that would never wash in a regular market. Now that prices are not falling, tactics need to change. The strategy remains the same, be the winning bidder, but the long game doesn’t work in that situation. So aim to get in and close fast or maybe consider being a long term renter, that’s a perfectly good lifestyle choice too
http://www.dnggalvin (www.dnggalvin) give the following advice:
Bidding on a house – what buyers need to know
Table of Contents
- Understanding the bidding war
- Online bidding on a house
- The Gazumping gap
- Sale Agreed not binding
- Ready to navigate the property market confidently?
You know the scenario. The hardworking couple scrimp and save to build up their savings. They forego the holidays, the nights out and the streaming accounts to become experts on the local property market, the Central Bank’s mortgage lending rules and the support schemes available to home buyers. After securing mortgage approval and finding their dream home, in a welter of excitement they submit their first bid.
Sadly, this is often where the couple’s ardent hopes crash head on into a) the realities of the Irish property market and b) the intricacies of the bidding process as they find themselves entangled in a competitive web of bids and counter bids.
As we all know the key issue at the heart of Ireland’s housing crisis is that the supply of housing, while increasing still falls far short of what our growing population requires. According to a recent report by property website Daft, the number of second-hand homes on the market in 2023 was down 27% on the previous year. While circa 30,000 new homes were built last year, most commentators believe we need to be building up to twice this number. On the other hand, demand continues to surge fuelled by a growing population, a robust economy, and a shortage of properties to rent.
It is this imbalance which lies at the heart of bidding wars where numerous buyers vie for the limited number of properties available. So how does it work?
Understanding the bidding war
Before you submit a bid on a property in Ireland you are typically required to provide proof of funds to the agent managing the sales process. This is aimed at preventing phantom bidding and ensuring that all parties who have expressed an interest are genuine and have access to the required level of funding. The agent, whose job it is to secure the highest price for the vendor, then engages with the underbidder, and this usually leads to counter offers which in turn spark a bidding contest amongst interested parties.Of course, one of the key questions which emerges for underbidders at this juncture is how can they be sure that they are not bidding against themselves? ie that there is indeed another bidder. The key lies in working with licensed agents who adhere to a code of conduct and who have to keep a record of all offers received on a property. This record can be inspected by the Property Services Regulatory Authority (PSRA), the body charged with regulating estate agents and ensures that the bidding process is carried out in a transparent and regulated environment.
If suspicions arise about phantom bidding, buyers can contact the PSRA to file a complaint, triggering an investigation. It is crucial for buyers to recognise that the vast majority of agents operate ethically, and safeguarding the integrity of the bidding process benefits all parties involved.
GDPR is the main reason identities of bidders are not disclosed. If one submits a complaint an investigation will be initiated. While it will probably be too late to affect the sale of that particular property. If something untoward is uncovered, action will be taken against the agent, and this is really important for raising standards and maintaining best practice.
The other key question for bidders of course is how high can they go? While the advice on this can vary – and in the end will be determined by people’s different personal circumstances and approach to risk – most experts say mortgage repayments, including insurances should not exceed 25 to 28% of your gross monthly income.
While the person who submits the highest bid usually succeeds in securing the property this is not necessarily always the case. Very often bidders are involved in selling their own property and will need to complete the sale of their home before they can finalise the purchase of the property they are bidding on. And of course, potential buyers and bidders on their property will be involved in ‘chains’ of their own also. This is where cash buyers have a clear advantage and if the agent knows that the vendor would like a quick sale s/he may guide them to accept their bid, even if it is lower.
Online bidding on a house
One fairly recent development in property sales is the advent of online bidding. While advocates point to its transparency and efficiency, some issues do arise. While participants are assigned unique bidding numbers and can observe live bids, the crucial details defining a bidder’s strength—whether they are a cash buyer or have a property to sell—remain obscured. This information gap introduces an element of uncertainty into the decision-making process, challenging the very transparency online bidding seeks to achieve. As the industry continues to adopt new technologies, finding a balance between efficiency and the disclosure of critical bidder information will be a prime consideration.The Gazumping gap
While regulation of the property market and the profession has increased in recent years – a very welcome development – some gaps do remain. And one of the critical ones is the non-binding nature of ‘sale agreed’ status which in turn can lead to gazumping.Gazumping, where a seller accepts an offer but backs out when they get a higher bid, doesn’t seem right – particularly when you are the party being gazumped – but it is not illegal. A vendor can withdraw from a sale without repercussions, and buyers who have gone ‘sale agreed’ can sometimes be devastated weeks later to discover another party has made a higher offer.
Sale Agreed not binding
Home hunters should know that ‘sale agreed’ means little, other than that the owner has accepted their offer subject to a signed contract. There is no legally binding aspect to ‘sale agreed’ until both the buyer and the vendor exchange signed contracts.Another issue of the current system is that it potentially allows buyers to go ‘Sale Agreed’ and put down deposits on various properties, through different agents, which are fully refundable with no protection for the seller. These shortcomings need to be addressed.
Purchasing a property in Ireland is often a long process involving numerous false dawns.
That’s why understanding the intricacies of the bidding process is essential. Late last year the Taoiseach announced an expert group will examine the process of how people buy homes in Ireland and the obstacles they face. Hopefully that group will address some of the shortcomings we’ve identified here.
But by understanding the process, working with licensed agents, staying informed, and utilising regulatory bodies when needed, buyers can navigate the process with greater confidence and hopefully turn the dream of homeownership into a reality without unnecessary heartache.