Making a bid. Best practises and what to avoid.
Note of warning, my first attempts at bidding are fairly cringe worthy. I learned as I went what mistakes to avoid, which might help you when you bid on a property yourself.
I researched how to make a bid only after my many (MANY) mistakes, and I was pleased to see that this super useful article, among others, listed all the things I *shouldn't* have done: Making a bid - The Irish Times.
1. Prices tend to go above asking prices - don’t bother with places that which price is close to what you can afford.
Currently, the tend when buying a house in Ireland is that the prices will go above the asking price, thanks to offers coming from multiple bidders. It’s very similar to an auction, the estate agents do their best to drive the price up and attract as many bidders as possible… the only difference with an auction is that the estate agents pretend it isn’t and you need to send in your offers by email.
2. Bid Fast and Bid Low. A first bid below the asking price is advised as to kill momentum before things have even started - the other bidders will see it and be more reluctant, and double guess, their own bids. If you go straight in with €10,000 above the asking price, you'll only excite the other bidders and lead them to believe the house is worth more.
The first house we made a bid on was a property in Dunsink Green, Finglas. 154 square meters, 4 bedrooms, 2 bathrooms and an extension which we could convert to a studio apartment.
You can tell we were very excited about this property, it had so much potential! We also visited the area multiple times and it seemed fine (more on THAT
The asking price was €175,000. We offered that right away. (2^ MISTAKE)
The estate agent, from GUNNE, was very nice, and he organized a viewing just for us so that my boyfriend could view the house after we had made the offer. However, by that time there were already 2 other bidders and the counteroffer had risen to €191,000.
3. If you counter bid, pretend it’s a like a punch: make sure you knock out the other bidders. Increments by €1,000 create a 'frenzy' bidding, with the price rising above where things would have settled if you had gone up by €5,000 in the first place.
In the following days there was a frenzy of bidding..
4. Try to slow down any counterbidding process. No more than one counterbid in a day - avoid a 'fast bid' situation (estate agents like to whip up a bidding storm). Also, keep in mind that if you lose, it just raises the price other properties in the area, which may be your “plan B”.
5. Know your upper limit - know when to accept you have lost, there'll be other houses and it's not worthy getting over-extended.
We would receive an email from the GUNNE estate agent, and we would reply right away with our counter bid, two or three times a day. In a couple of days the price had skyrocketed to €206,000. (4^ and 5^ MISTAKE)
When the agent came back with another counter offer to €209,000, we finally opened our eyes to what we were doing. That was way over the budget we had in mind for this house: my boyfriend is quite knowledgeable about house renovations, so after his visit, he told me that we’d need to completely re-wire the house, replace the heating system and probably have to reinforce the first floor. There were other smaller renovation too: the master bedroom bathroom was covered in mold and the tiles in the family bathroom were unglued.
And of course, there was the renovation of the extension in a studio apartment.
After that last counter offer, we decided to withdraw.
6. The estate agent is not your friend: their job is to get the absolute most money out of you on behalf of their client and on behalf of their business, which gets a bigger fee the higher sale price they achieve.
The second house we decided to make a bid on was still in the
The best part of all, was the asking price €120,000. With such a low asking price, and with the inevitable counter offers (especially since there were already 2 bidders) we thought that, this time, we could stay under our budget and get a Sale Agreed.
On the same road there is also a second house
Whenever I think of that conversation I still want to facepalm.
I told the estate agent that this house was a great deal, because the asking price for the other house was higher and there was even an offer of €150,000. And, of course, I told him that this house was in better condition than the other one.
Pretty much, I gave the estate agent all the possible reasons to try to raise the price of this house to €150,000 too. (6^ MISTAKE)
7. One week is enough wait time. The estate agent and their client want to stretch out a deal in order to attract more buyers, however, seven days is more than enough for a vendor to organise a solicitor and sort out contracts with you. Be aware that, with the prices going up, every day you wait is costing you money.
The last we heard form the estate agent was on Monday July 11th, when we raised our offer to €138,000. Since then, I’ve called three times on the estate agent’s mobile, left a message in their office and sent them an email.. and I STILL haven’t received a reply or an update. Not very professional of REMAX estate agents.
While we were waiting to hear from REMAX, we thought that we might as well make an offer on the other house in that same street. Since it was obvious that REMAX was bidding their time in the hopes to raise the price (thanks also to the very useful information I provided them), this seemed like a good insurance policy to get at least one house.
So we made an offer on our third house (of €150,000). I think this was the first right thing we did: it's always best not to focus too much on one property.
Oddly enough, we won the bidding for the third house we made an offer on, but, by the time it took the estate agent to let us know that, we had already realized what an ill conceived idea it was to buy a property in Dunsink.
The lack of professionalism shown by REMAX, also led us to withdraw our offer there. If this is how seriously their treat their buyers, what’s not to prevent them from gazumping.
8. Make offers on multiple properties. This way you are rising the odds that you’ll win the bidding on one of those properties. And, at the same time, you keep your hopes up... avoiding the utter and crushing disappointment when you lose the house you focused all your hopes on.
Also, estate agents smell hope like sharks, and take advantage of your fixation with that particular house.
9. 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.
10. Put timelines on your bids and stick to them. Don't waver! If you make an offer that is only good for 48 hours and requires a “yes” or “no” answer, then stick to that timeline.
The fourth house we made an offer on is in Finglas north, 2 bedrooms, 2 bathrooms and a nice open floor kitchen-living room ground floor. It’s also in a very nice area of Finglas (quiet, settled street, and near the Garda station).
I was a bit anxious and I called letting the estate agent know that we were seriously interested in the property, even before viewing it. The day after the viewing we made an offer of €145,000, with would have been the correct approach, hadn’t there been already another offer of €150,000.
With this property, we’d like to try a different approach: we’d like to state
UPDATE - We won that last bid! I was a bit scared to do the 'punching bid' of €5,000, so our first counter offer was €151,000...
At this point, I really wanted to avoid another frenzy bidding and I thought that we had nothing to
REMEMBER THAT A PROPERTY IS NOT BOUGHT UNTIL BOTH PARTIES SIGN THE CONTRACT. Even if your offer is accepted and the property goes sale agreed, there is still the unfair practice of