People watching the fall in house prices, waiting for the best opportunity to buy, have been blind-sided by the sudden €3000 a week increase in house prices. Here is ten tips from Acquaint on people buying homes in Dublin during the heat.
If you haven’t covered the basics, there is no point in putting a bid in for properties in Dublin. You need to have updated bank approval and finance so you can buy quickly, you must have an appointed solicitor and have their details prepared for the vendor and it is important you have a surveyor ready, with their details, to check out the house.
Even if it seems unimportant, a large number of people bid on new homes when their own is still on the market. If you do not have a contract prepared which has been signed from both sides, it is advised that you avoid placing a bid on a house. If you don’t have any of this, you will not be taken seriously. Quite often the highest bidder may not win. If their finance is not sorted or because they still need to close the sale of their own home before the buy.
It is incredible how many people selling their house see the vendor’s estate agent as their friend in the matter and tell them everything. Your vendor’s estate agent is a sales person whose mission it is to close a deal with you for the most money possible on their client and their business’ behalf. Stick to your own side,
“It is extraordinary how so many people who are trying to buy a house will regard the vendor’s estate agent as their good buddy and tell them everything. The vendor’s estate agent is a professional sales person whose job is to get the absolute most money out of you on behalf of their client – the vendor – and on behalf of their business, which gets a bigger fee the higher sale price they achieve. Don’t confide in the other side.“
If you feel it is important to talk to your vendor’s estate agent, under no circumstances should you tell them how much you have to spend or what your upper limit is. By confiding this to your vendor’s estate agent, it gives them a sales target and challenges them to find a home at this price.
In the current market, many bidders begin by sitting back and allowing other bidders to make the first move. If the house you’re looking at is up for €300,000, don’t wait, bid straight away for €290,000. The agents will most likely tell those interested in the property how much the underbid is worth. If it is below the asking price, other bidders may be reluctant to move up. Quite often, bidders will copy each other’s behaviour
It’s non-ideal for an agent to have the starting bid below the asking price as this kills momentum before it begins. However, if the first bid is €10,000 over the asking price, other bidders get hyped up and believe the house is worth more.
Often times house hunters can be in awe of their estate agents. Don’t be. You’re entitled to ask them countless of important questions, which for the most part, they’ll answer. Asking these questions can often put you in a better position. Talk about the house’s current owners, whether they’re ready to sell straight away or if they need to buy a house first, what their bottom line is, how much the highest bidder has paid. Anything that gives you vital information about the house and the best way to approach buying it, is not a stupid question.
Use any information you can obtain to your advantage, if you’re prepared to move out quickly, without a house to sell and are paying in cash, do not allow them to forget that
The vendor’s estate agents are always looking over the overall package shown by the potential buyer and most people don’t realise the homes aren’t always sold to the highest bidder. As mentioned above, properties are often sold not to the person with the highest bid but the person who is most likely to close
Many buyers are disheartened by Sale Agreed homes being tossed aside in favour of a higher vendor. Sale Agreed essentially means nothing as your deposit is returnable and until the contract is signed, there is no official deal.
Despite the current market, a lot of sales at the moment are falling through due to buyers changing their mind at the last minute or the bank refusing to provide finance due to the banks being highly conservative. Remember, just because the the bank approves an upper limit doesn’t mean it’ll be approved if they see the agreed price as being too much for what you’re paying for. When a sale falls through, the estate agent will often come back to you if the other underbidders turn away.
Estate agents will typically value a house low so as to build up momentum when bidding begins in order to raise the price when people start high with the expectation of coming down. Watch different estate agents selling other properties to learn their preferred tactics.
It is a common strategy for vendors and their agents to stretch out the process of closing a deal in order to attract more buyers and hopefully receive a higher bid. Waiting weeks to hear from the agent does nothing but cost you time and, with house prices rapidly increasing, money. It is not impolite to call back after a week. Seven days is plenty of time for a vendor to organise a solicitor to arrange contracts with you. This should be made clear from the get-go and if they can’t do this you should walk away without looking back.
Ciprian on Friday, November 8, 2013 in Auctioneers, Blog, Estate Agents, Investment