Thursday 24 August 2017

'It's not the perfect home but it offers shelter from the raging bidding war' - First-time buyer couple on FINALLY getting that house

When I last wrote about this subject we were in the middle of our search with no end in sight...

First-time buyers are getting desperate. Stock picture
First-time buyers are getting desperate. Stock picture
Cathal McMahon

Cathal McMahon

Standing in the back garden of our new home we could barely contain our excitement. After eight months of weekend viewings and spiralling bidding wars - followed by the inevitable heartbreak - we had managed to get our hands on a home... and we weren’t letting go.

The estate agent asked me to remind him how much we had paid for the property - there had been a three month lag between when we went sale agreed and the day we got the keys. He then proceeded to tell me that he’d be confident he could get a further €30,000 for it now.

I allowed myself to feel smug before I momentarily considered putting it back on the market. Clearly we had a gift for property investment! Was I now a property mogul?

This was followed by instant guilt.

In the space of just two sentences, I was now everything I had come to hate so much over the previous year.

Instead of just being content with finally owning our own home we now wanted to make money out of it and to hell with the first time buyers!

The Hunt

When I last wrote about this subject we were in the middle of our search with no end in sight. We had been outbid on over half a dozen properties as an increasing number of first time buyers crowded into a sparse market.

During our search we had several negative experiences with estate agents and homeowners keen to bleed the first-time buyer of everything they could. We were considering all options: Long term renting; building alongside the in-laws; or even moving outside of Dublin.

Our demands were quite broad. We were looking for a three-bed home in North Dublin within the M50. Our price range was between €300k and €400k with a bit of wriggle room, but not much.

After having our hearts broken on our dream home early on we realised that the best thing to do was to bid on multiple properties at once. This, we felt, would speed up our chances of success. We soon realised, however, that were not the only polygamist bidders… and we were all driving the prices up for each other.

A four-bed terrace house in Glasnevin went from an asking price of €375,000 to €435,000 in the space of a week; a three-bed semi-d in Beaumont started at €385,000 before we eventually tapped out at €430,000; and our dream home in Whitehall started at €390,000 before finishing at something close to €450,000.

Reading these figures it is easy to get excited as a homeowner and dejected as a buyer. However, in our experience, we found that this type of bidding only existed for around half of the properties we viewed. The remainder tended to sit there, below their asking price, waiting for the big offers to come in. Because everybody is reading and talking about the major bidding wars for homes, especially in Dublin, it appears that some homeowners have an artificially inflated idea of the value of their own home.

For this reason they are pitching their properties at much higher asking prices and then rejecting any offers that fail to reach this demand.

One home we were interested in, in Glasnevin was priced at €390,000. It needed at least another €100,000 to bring it up to the anything resembling a home you could live in. When we viewed it there was a bid of €365,000. We went to €370,000 and then €10,000 more before the other bidder dropped out of the race. We were left dangling at this price for eight weeks - unwilling to bid against ourselves.

At this point we called the estate agent to ask if they would accept our bid and she returned 24 hours later. Not only were they not accepting our offer, they were now not willing to sell for anything less than €400,000. The property remains on the market and the worst thing about this whole situation is that I know somebody will, eventually, pay this or more.

So how did we get a home?

The house we did eventually buy was, strangely, one of the first that we bid on. It was sold in 2014 for €334,000 but its current owners now believed it was worth the asking price of €395,000.

We bid low at the start and our first offer was rejected.

Having reached a stalemate, we decided to offer another €15,000 (our first offer was well below the asking price) but again we were met with grumbles from the estate agent. “Would you not go a little higher? They were expecting more.”

I now wonder if they were expecting more or had been promised more. We made repeated calls to ask about the status of the bidding and were met with vague promises for return calls that rarely, if ever, came.

The asking price was reduced to €375,000 and eventually a second bidder entered the fight. We duked it out for around a fortnight before our offer eventually came out on top - a full three months after we made our first bid.

I received the call at work to confirm that we were successful and was asked if we wanted to proceed. I responded that I needed a day to speak with my partner and tie up other loose ends. We had bids on other houses at the time and we wanted to discuss all our options before jumping headlong into this property.

This was met with anger and a veiled threat that the vendor may now want to reject our offer and go with the other bidder. After three months of dangling us along and waiting for other bidders to enter the race and up the price, they were prepared to drag the whole deal down because we had requested 24 hours to think it over.

We were upset, dejected and angry and the entire episode left a bitter taste in our mouths as we went through the cumbersome paperwork.

Poachers turned gamekeepers

With gritted teeth we got through the process, bringing us to that morning at the start of this month standing in the garden of our new home with the estate agent.

The reason that we were standing on the lawn rather than in the house was that the key for the door wasn’t working and we were waiting for his colleague to arrive with a spare.

In the meantime the auctioneer was regaling us with stories of how there are now anything up to 10 bidders on homes. He described bidding wars for three-bedroom houses on the northside going over €500,000 and €600,000.

He wasn’t mentioning the properties that are sitting there with for a while or the homeowners who aren't willing to budge.

Eventually his colleague arrived up in a shiny BMW and an even shinier suit. The key worked and we unlocked our first home.

It’s not the perfect home that we’d always dreamed of but it offers the perfect shelter from the bidding storm that is raging around us.

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