Bidding on a house. How does it work?

Bidding on a house always seems exciting. And quite unexpectedly, it is. However, you don't need to worry if you are well prepared. It also helps to have a Purchase Coach or real estate agent behind you. I will help you with every detail of the preparation and bidding process, so that you can make a winning bid. Here are some insights to give you an idea.

What are the rules for bidding on a house?

There is always some difference of interpretation here, but roughly speaking there are two types of bidding processes. To keep things simple, I will leave ‘auctions’ out of the equation for now.

1) Open process: In principle, all homes start with an open process, in which bidding is a negotiation between two parties. This means that you simply make an offer on a home by telephone or email. When a counteroffer is made, you are officially in negotiation.

2) Closed process: Sale by tender with a bidding deadline. If there are multiple interested parties for a property, the selling agent will often issue a ‘tender offer’. Anyone can submit a bid before a specific deadline.

How does it work when you make an offer on a house?

You can make your offer by phone, email, or nowadays often online. Tenants have priority with social housing associations. However, they do not often bid themselves. It is then up to the housing association to give its approval for the winning bid. Always make sure you have proof of your offer by email.

During online bidding processes, real estate agents always have insight into the bids, unless they use ‘Eerlijk Bieden’. In that case, selling agents only gain insight after the bidding deadline, after which they work with the sellers to select the winner.

Once the offer or counteroffer has been accepted, you are in negotiation.

However, until both the buyer and seller have signed the purchase agreement, the seller can withdraw his agreement and sell the property to someone else. For example, if a higher offer is received.

This is legally possible. Ethically, it is not common practice. The reverse also applies to the buyer. Legally, the buyer can withdraw, but ethically it is not common practice. The buyer may have canceled another purchase, and the seller may be left with an unsellable house because other buyers may be put off by this. So don't take this too lightly and bid prepared, but be aware that this possibility does exist.

For this reason, the purchase agreement is always signed fairly quickly after agreement. This can vary between 2 days and 9 calendar days after agreement by email.

Everything included in your offer will be incorporated into the purchase agreement. Did your offer not include a technical inspection? Then the selling agent will not consider this part of the purchase. Always include the following items in your offer:

1) Purchase price

2) Movable items included in the purchase

3) Financial terms of the purchase

4) Bank guarantee date

5) Delivery date

6) Request for technical inspection. (optional)

7) Why it is certain that you will purchase the property and there are few obstacles in the way (for example, because you have J-oost de AankoopCoach behind you to guide you).

This is a simple summary. If you want to phrase this professionally, tailor it specifically to your home and situation, and ensure that these conditions are favorable, J-oost will be happy to help. Ask about the conditions.

Does it make sense to offer the asking price?

That depends entirely on the property. If a property is not popular, you can certainly try to offer the asking price or below the asking price. Perhaps the asking price is even too high. This can be the case in both a cooled market and an overheated market. To get an estimate of the value of the property you are visiting in advance, I recommend using this website.

What is a realistic offer on a house?

Ultimately, two things are most important to a seller. Can you provide certainty? To what extent are you actually able to purchase the property and finish the process smoothly till the finish line? And, of course, ‘hard cash’: the purchase price of the property. Make sure you score highest on these points.

And how high the offer should be differs for every house. This website gives you a valuable indication. J-oost can help you make a winning offer.

How much below the asking price can you offer?

You can offer as much below the asking price as you want. However, if you offer too low, the seller may perceive this as not being serious. Maintaining good relations is always important if you want to reach an agreement. So keep this in mind. That doesn't mean you should offer more than you think it's worth. If in doubt, you can always informally check with the selling agent.

Is the offer binding?

An offer is not binding if you are bidding on a property as a consumer. This is because there is a written requirement for the purchase. This means that the purchase is only binding once the buyer and seller have signed a purchase agreement. After signing, the buyer has three days to withdraw without giving any reason.

Are you bidding on a property as a business entity? In that case, this written requirement does not apply and you are bound to the property after an accepted bid. There is therefore no three-day cooling-off period. Are you bidding as an investor, or can you be considered an investor? Then it is also a business bid. This is normally the case with a third home, but it is subject to interpretation.

The winning bid

The winning bid depends on several factors. J-oost knows these like no other and can help you prepare the amount of your bid, so that you can make a well-founded offer. Request a bidding strategy session or hire me as your Personal Coach, so that you are supported throughout the entire process. Because what is the best response to a question from the sales agent? I take the stress off your hands, so that you can make your bid with confidence and conviction. As a Makelaar J-oost, I won 1 in 2 bids.