Is current bidding over email & phone legal?


#1

I am currently bidding for a few properties and can’t just wonder if this bidding system over email taking weeks and months is even legally sanctioned ?

It is extremely opaque and the estate agents won’t disclose how many bidders are there at any stage. They just come back in few days with some new higher offer and asking if I am willing to offer more. Rarely I may get a phone call instead of the same nature if I don’t reply within a couple of days to the emails.

This looks rather like an auction style sale but just (illicitly??) organized over weeks or months and with no transparency for the ppl involved.

I also can’t imagine this happening elsewhere in EU but here alone.


#2

Not only is there nothing illegal in this process of bidding, our economy depends on it!

Price discovery is the essential feature of a free market. Estate agents have professional obligations e.g. to report all bids to the vendor, but there are no rules limiting the time this process may take.

Nor is there any law against creating a phony bid in an effort to drive up the price but it is viewed as sharp practice and I don’t believe professional estate agents engage in the practice.There was talk of making it illegal but I don’t think it got anywhere

https://www.independent.ie/life/home-garden/mark-keenan-puff-from-the-state-on-false-bidding-is-very-much-a-smokeless-duel-37909706.html

You are always free to walk away and you should always keep looking around for alternatives so delay a risky strategy from the vendors perspective.


#3

If our economy depends on it, why is it not transparent to the buyer? Arent’ there rules regulating the auction style sales ? Aren’t there defined registrations process for the auction and defined timeframes for the auction to take place ?
And yes, all the big names and professional EAs are in this - SherryFitz, DNG, Churches, and few others I’ve had to engage with - they all do it, and with no time limit – and we’re talking about several weeks to several months (and at times the respective property goes back to the market within 2-4 months or so, as the highest bidder that went sale agreed had “personal reasons” to drop) . And in this terrible lengthy process anyone can enter at any time to increase the bid (either to puff or with actual interest to purchase).
While I understand why they do it (so to “maximize” their profit and to inflate the bubble) I can’t understand why is this not regulated to offer a legal framework for the buyer as well.


#4

The bidding system you are engaged in is not an auction as I would understand it, even if you were in an actual real auction, there’s very little stopping me getting my mother going in to bid against you simply for the purpose of driving the price up.

Any ‘thing’ is worth what someone is willing to pay for it - if you are willing to bid higher then at that moment in time that’s what that ‘thing’ is worth… any other system fixes prices at a level which may be below the cost of producing ‘things’ then the producers of ‘things’ bugger off and make something else that is worth their while, unless you’re in communist Russia when the continued making stuff and eventually bankrupted the place…


#5

It would be better from a market perspective if the sales process was transparent but that’s the vendor’s choice (who is pleased not to have accepted your initial bid!).

It would be hopeless to enforce transparency legally. The Property Price Register now provides a degree of transparency about actual prices but the time lag and the lack of vetting diminishes its value, especially in a volatile market. CSO series is much more useful.

If you’re tired of the process, make a “best and final” offer with a time limit for acceptance, but you need to be ready to walk away.


#6

I believe in Scotland there is a sealed bid process where all the bids are opened and the highest wins - https://www2.gov.scot/resource/doc/1125/0083346.pdf.


#7

And then we all get screwed for €4Million by a “mystery bidder”.

https://www.irishtimes.com/news/ireland/irish-news/department-paid-rehab-4m-more-than-valuation-for-dublin-school-site-1.4035296


#8

Except nothing is being produced in a second-hand property sale. Indeed, that’s the reason our economy went down the toilet last time – money that could have gone to productive economy-boosting uses was used to inflate a giant asset bubble. As someone said, “we thought we could get rich just by selling houses to each other”.

I don’t see why the bidding process couldn’t be open to scrutiny. It would be a relatively simple matter to register every bid along with a statement of any non-arms-length relationship of the bidder to the seller. A process of random reviews (like Revenue does on tax returns) would discourage any skullduggery and increase the confidence of market participants.

Ireland is a nation of stroke-pullers, and Irish business has shown itself to be extraordinarily bad at self-regulation time and time again. Why do we think this is any different?


#9

I don’t either, but doing this you won’t discover what someone might be willing to pay, you discover if actor a is willing to pay fractionally more than actor b.

What is the value to society of this price discovery is I suppose what we are asking here? The value to a capitalist / investor is clear. Is there an argument that it stimulates more economic activity because returns are maximised?


#10

Stoke pullers and con men is correct
A Spanish business man I once had dealings with told me that Spanish businessmen wanted to make a living, while Irish businessmen wanted to make a killing


#11

If it is a free capitalist society, and we are free to walk away at a certain price point - it’s amazing how the EAs don’t like it when you apply those principles while they are trying to gouge you.

When I was bidding on our house, I was actually bidding on two properties at the same time - the only difficulty for me was that they were both listed with the same EA office. Not ideal.

Still, it took the EAs in that office about 2 weeks to realise that we were bidding on two of their properties… at which point I got a phone call and a lecture down the phone that this “was not right. You can’t bid on two properties. Which one do you want?”
I said I liked both, but that both were not worth the same to me - I placed a different value on them. And I was likely to continue to bid on each of them until the bid price exceeded what we thought was good value for them. This would be a different number for each property.
This didn’t sink in at all.
I then was asked, “well, what’s your budget? You can’t buy both! Someone is going to be let down here!”
I said that person might be me - I don’t know what they’ll both sell for in the end.
I said it didn’t matter what our budget was - as our budget would cover what we thought good value was for the properties. Either of them. I still had to be polite in all of this as I was trying to buy a house from these guys.
All the same, it was still a bit ‘Father Dougal and the cows’ scenario.

Note: We bought property B, which was the second one on their listings. It was more expensive than property A. We withdrew from bidding on A when it went above what we thought it was worth to us… at which point the EA for that property essentially abused me down the phone for stopping bidding even though I had “gone higher on the other property”… :roll_eyes:
I had to just stay silent. Glad I’m out of it for the last 5 years, but I’m sure it’s all in my future again at some point.


#12

we recently closed on a property that we started bidding on in November.
We had a top price in mind and went in 10% below that.
Other bids went in and we increased each bid by 1000 euro.
EA basically told us to stop fannying about and just bid our top price (which was slightly above asking price)
We refused and kept upping bids by 1000euro.
When we reached asking price another bid of 5000 above asking appeared and we walked.
We started bidding on another property with a different EA when the first EA came back and asked would we match the top bid.
We aid no and pointed out the property we were now interested in.
next day hes back saying top bidder has pulled out and we can have the property for the asking price.
WE said no not interested at asking and offered 10k below asking as we were cash buyers and this was mid Dec
Sure enough Vendor accepted the bid of 10k below asking.
EA will do all they can do maximize price and unless your heart is really set on a property you must be prepared to walk away and play hardball


#13

Look on the bright side. All this faffing around saved you 10K!(compared to your highest bid). You might have saved even more if you had walked after your first bid. But maybe not. The joys of price discovery :smirk:

I believe the vendor was behind this gamesmanship. Why would an agent jeopardise his fee in the hope of squeezing a few grand more out of the deal?

As I said before, no law was broken. The agent does not owe you a duty of candour. The day may come when you want to sell. Will you feel bound to show your hand to the bidders? Would you tell the last bidder standing “I don’t want to sell for that price, give me more of your money”?


#14

If you are bidding or negotiating on something worth hundreds of thousands of dollars then I would recommend reading a sales or negotiation book. This one is very good. https://gettingmore.com/
If you don’t have time to read it, then watch one of the talks by the writer Stuart Diamond.
He lists 20 techniques that are very helpful. Most sales people know a sizeable proportion of these intuitively but many people who have not worked in this field seem unaware of many of them.
I guarantee that the small investment in learning some of these techniques will save you a lot of money in life.