As Ireland’s property market begins to turn - or at least gets close to it, an increasing number of bargain-hunters will find themselves having to bid against other buyers for a property they’re keen to snap up.
Bidding on a property can be tricky at the best of times but in today’s uncertain market conditions, you never know who you could be competing against. Your fear of losing a property will be mixed with a dread of being sucked into a bidding war and paying too much for it. You’ll need some kind of strategy, one that considers: who the other bidders are likely to be – could you be up against someone with unlimited funds; whether you respond with a counter-bid immediately or play your cards close to your chest; and most importantly, what your cut off price is.
Other key considerations for anyone bidding on a property should be:
- Get to know the estate agent so you can glean certain information from him/her. For example, find out why the property is on the market – is it about to go to auction, is it a forced sale or is it an executor sale? But don’t get too cosy and never forget that, like in the UK, Irish agents represent their clients’ – the vendors - interests.
- Sitting on the fence and waiting to see what happens could go against you. Making an offer, even one that you know will not win you the property, shows you are interested and will be considered for counter-offers as the sale progresses. Showing no interest, means you won’t even make it on to the agent’s or vendor’s radar.
- If you are a cash buyer, highlight this as you’ll be more attractive to a vendor. If you’re buying with a mortgage, having finance in place also makes you a more attractive purchaser - tell the agent this.
- Put your bids in writing, including information about how you will be financing the purchase as per the last point – quite simply, you should mention anything that could make your offer more attractive without you having to offer more money.
- Don’t be scared to make an offer well below asking price. Just be sure that as bidding gets under way, competing offers increase in small jumps and not by €5,000 or €10,000 – in today’s market a little, is a lot, so you shouldn’t need to pay over the odds if you’re careful.
- If you are bidding in euros and your funds for purchasing are still in Sterling, consider what effect the fluctuating exchange rate could have on your budget. You could consider securing an exchange rate in advance so you know precisely how much your Sterling is worth in euros, or you could wait to see if the rate moves in your favour meaning you could afford a higher euro offer. Always use a currency exchange specialist to send your money to Ireland – not only do they offer better exchange rates than if you sent your money direct through your bank but, they can also advise on forward buying currency and other strategies. For more information, download currency specialist Smart Currency Exchange’s free report here.