It is one of the most talked about subjects regarding property and many first-time buyers are often lost when seeking the right answers. It isn’t exactly a science but there are some key things to consider when you begin bidding on a property:
Mortgage approval – This is a basic need but so important. You need to know what your upper price limit is too and beware of the expiry of your mortgage approval.
Know the basics – The asking price is a guide price and the property may not sell for this price at all. Bidding is a huge part of the selling process and though you may bid the actual guide price it may not mean you get the keys as multiple bids can drive up the price.
Bidding is a game – Bidding is like a game of cat and mouse depending on how many interested parties there are. If you put in a bid of €320,000 on a property that is asking €330,000, there is little chance of it selling for that price, but you are showing your interest. It may inspire other bidders to get involved or it may scare off other interested parties. More importantly, you’ll be notified on other bids and will know the position of the property from then on. Remember to view houses that are €20,000/€30,000 less than your budget so you have room to bid. Keep your opening bid as low as you can without seeming like you are wasting a vendor’s time.
Transparency – In the middle of multiple bids you may find yourself questioning the authenticity of the bids but remember every bid must be noted, dated and signed off on. An estate agent will then ring/email the other bidders (as well as the vendor), and this is documented in the property’s folder and digitally. Here at MM Ward, though we are biased, we are honest and transparent throughout our property dealings – something we pride ourselves on.
Be professional and smart – You should conduct all conversations with the estate agent professionally. Show them you are serious by having everything in order regarding paper work. Lots of properties fall through before closing because a buyer hasn’t got the finance, or they have bidded on other properties too. Closing a house deal is the end goal for the vendor and the estate agent so show you are the “real deal” and you may find a vendor will accept your offer over a less efficient or unreliable bidder. Have your solicitor in place and ensure it is a good one who will proceed efficiently. Don’t forget stamp duty liability and know the rates applicable.
Know the drawbacks – Sale agreed means nothing until your property deal has closed and there is a risk that the vendor or you (the purchaser) could change your mind. However, there is every chance everything will go according to plan. Equally, if you are bidding on properties you may see many higher bidders achieve sale agreed before you but make it clear to your estate agent that you’d like to be notified if a house sale falls through.
Don’t forget the other stuff – Once you go sale agreed you will need to get a good Surveyor to look at the property. They will provide their professional opinion on the property and will alert you to any problems.