NSW Rental Blind Bidding. WHY?

l0nglive on 11/09/2023 - 11:36
Last edited 11/09/2023 - 12:14

For the last two weeks I have been looking to rent apartment units in Parramatta 2150. I applied to around 8 properties and got declined to all. I offered $40-85 above the listed price and still failed. I understand the market is very seller-favoured; I can gauge the demand being very high because all inspections are packed.

What I hate the most is that I don't know the fair price of the market, I can only guess, making the whole process very FOMO-driven and stressful. Even if I could win one, I wouldn't know If I overpaid. IF I lost one, I wouldn't know by how much. Now getting a rental is like doing a full-time job of property valuation and day-trading.

I notice that the agents are listing well below the normal rate to draw in huge crowd of rent seekers. This creates the FOMO effect so that the bidders would go way higher than the listed. How much higher is entirely due to emotion. This feels like price haggling??? For us, we learn that $85 above is nothing, and we would need to go even higher in the next bids.

Why did they stop rental bidding? Why turn it from a transparent process into a stress-induced blind bidding?

EDIT: we are working couple with 100k+ saved (gave them the payslips and bank statements in application). No Pet, no Kid.

Home & Garden

Comments

  • Cheaplikethebird on 11/09/2023 - 11:40
    +13

    In the future you won't be putting money away for your kids so they can buy a house, you'll be putting them on your lease from the time they're born to help build their rental references.

  • CodeXD on 11/09/2023 - 11:43
    +3

    Did you contact REA about why you were unsuccessful in the rental application? Do you have experience renting?

    Sometimes it isn't all about the money. For example single income applicant for a 2BR apartment you will most likely always lose out to dual income unless you make significantly more.

    • ThithLord on 11/09/2023 - 11:44
      +4

      Sometimes it isn't all about the money

      lol

      • CyberMurning on 11/09/2023 - 11:47
        +9

        why lol? that is correct, landlord will have their own preferences which will never be disclosed

        • ThithLord on 11/09/2023 - 13:12
          +1

          Just taking the mickey, mate

        • freefall101 on 11/09/2023 - 14:45
          +4

          Generally people from the subcontinent will always really struggle to find rentals because of the assumption they'll make curry and the house will stink. A few friends have had to deal with barely veiled comments about "strong smells".

          @OP talk to more real estate agents. Next door to me they cancelled the open house because they had enough applications already and just rented out. Most likely they're not even reading all the applications, so get yourself known to them and what you're looking for. They have no desire to do open houses and the like if they don't have to.

          • bobbified on 11/09/2023 - 15:31
            +15

            @freefall101:

            Generally people from the subcontinent will always really struggle to find rentals because of the assumption they'll make curry and the house will stink.

            My workmate rented out his house to a family for twelve months and he couldn't rent it out again for more than six months after that, despite deep cleaning and repainting multiple times. He would do an open house and watch people walk in and walk out straight away. He finally got it rented out to a couple who, during the inspection, only stood outside and didn't bother going in. Three months in, they broke the lease because they couldn't stand the smell anymore. It took another few months to finally get someone in there. He ended up losing money from that initial rental because the house was empty for so long

            Not saying that it's like that with everyone, but (and expecting to get neg'd to oblivion for saying this), there could be some truth in the generalisations.

            • freefall101 on 11/09/2023 - 16:53
              +7

              @bobbified: Yup, a lot of truth to it. There's a good reason some kitchens in India have a wet kitchen and a dry kitchen (with good ventilation on the wet kitchen). And plenty of once bitten, twice shy landlords like your workmate. I'm sure he fully knows that not all Indian people eat curry but it's a higher risk

              It's just an example of why landlords don't care about money. And that makes sense too. And extra $20 a week is nothing compared to the cost of cleaning + repairs + weeks/months of lost rental. It's the same for people with disabilities, even people with pets.

              • ColtNoir on 12/09/2023 - 11:28
                +1

                @freefall101: 100% my old neighbours had a granny flat out the back for their more aromatic cooking.

                (I’m Indian descent, before you all come at me)

          • TrustNoBody on 12/09/2023 - 07:50
            +5

            @freefall101: my son has a unit at liverpool and as soon as i step into the doorway to go in the lift all i smell is curry smell , i don’t know if curry lingers in the unit after cooking but it is super strong smell in the downstairs area

          • Motek Benzona on 12/09/2023 - 07:53
            -8

            @freefall101: Because white Aussies dont live in their own stink do they? Most of the filthy dumps ive ever seen due to people being absolute pigs were lived in by Aussies ;-)

        • SlickMick on 12/09/2023 - 08:39
          +1

          I thought it was funny that CodeXD said it isn't all about the money, then gives an example all about the money

        • Sinnerator on 12/09/2023 - 09:32

          survey says 99% of landlords like cash

      • CodeXD on 11/09/2023 - 12:38
        +6

        I would never rent out to an 18yo fresh out of family home even if they offered more.

        Most of them will have no sense of property responsibility and will literally trash the place.

        • coffeeinmyveins on 11/09/2023 - 12:52
          +1

          and will literally trash the place.

          Sources to back up that boomer mentality or did you just pull it out of your backside?

          I've had many neighbours who were fresh out of school and even some that were living in housing commission with a child. They were the nicest and most respectful. Moreso than the older tenants who complained about every noise that was made and complained to strata about clothes on balconies.

          but hey. don't let facts get in the way of generalisations and stereotypes, right?

          • jv on 11/09/2023 - 12:59
            +8

            @coffeeinmyveins:

            Sources to back up that boomer mentality or did you just pull it out of your backside?

            Don't need sources.

            If landlords believe that, then it will happen.

          • CodeXD on 11/09/2023 - 13:04
            +4

            @coffeeinmyveins: When I was in uni, I have personally witnessed how badly some of the students treated their rental place. Carpets get soiled or muddy and they walk through the house not giving a damn. New places that look 10 years old after 2 years because no one took care of it.

            REA didn't care as long as they were paying the rent, there wasn't any regular scheduled check-ups or inspections.

          • iminabrons on 12/09/2023 - 12:20

            @coffeeinmyveins: Teenagers be teenagers. Always have been and always will be. Even the Romans wrote about that problem.

        • TrustNoBody on 12/09/2023 - 07:53

          my son has been renting a unit since he was 19 and now 22 and his place is more spotless then mine is

        • ColtNoir on 13/09/2023 - 13:54

          I’m glad I didn’t have to deal with you when I had to move out at 19. Eff you, mate.

    • b0rnwithabeard on 13/09/2023 - 10:58

      But it's about money in the way that they need to reduce their time spent, so it's usually just whoever is at the top of the pile. They check the first application on the list. Do the people on the form sound like they make enough money to pay rent each month? Cool, job done. Bin the rest.

  • CyberMurning on 11/09/2023 - 11:46

    good luck..

  • istandbydan on 11/09/2023 - 11:47

    What was the advertised price?
    Suburb?
    House or unit?

    • l0nglive on 11/09/2023 - 12:15

      The latest one:
      2bed room unit Hassal st: listed 550, offered 635 and was refused.

      another one2bed room unit Campbell st: listed 500, offered 555 and was declined

      • GourmetFoodie on 12/09/2023 - 16:19

        You’re at the most competitive end of the market which is your problem. It’s just that everyone is offering as much as you, there are multiple high quality candidates etc.

        It becomes a big game of luck. Being first on the application list helps if you can apply before inspecting somewhere. Also anything you can do to make yourself more attractive.

        Bear in mind sometimes the landlord will just have weird preferences too.

  • Bignudge on 11/09/2023 - 12:02

    Would open bidding make it any better?

    • witheredcouch on 11/09/2023 - 12:08

      I had the same issue in Vic at the start of the year, and I would say yes, as the problem with the current market is they won't/can't tell you how much over the property went for, so you don't even know how far off the mark or if the place is even in your budget in the first place. All we were able to be told was that it had gone for more than the $50-75 extra a week we had offered.

  • Drakesy on 11/09/2023 - 12:08
    +9

    Boomers be like, just buy a house.

    But thats ok, because while you're floundering away trying to amass a deposit pensioners in $1 million properties are getting money from the government.
    Basically your tax is funding the lifestyle of someone who's already paid off their house and is now crying poor.

    How good!

    • coffeeinmyveins on 11/09/2023 - 12:54

      Boomers be like, just buy a house.

      My own inlaws are like this.

      They bought their house for what was 5x their annual annual salary and they had one persons wage. Paid it off ages ago.

      That property is now worth $1.9m. Over 20x the median salary and they wonder why young people are upset about what's going on.

    • Gunnar on 11/09/2023 - 14:01
      +4

      Boomer here, that’s right I agree, just buy the house ;-)

    • brendanm on 11/09/2023 - 17:34
      +1

      That site has a paywall. Not sure having a million dollar house makes you a millionaire exactly. It's just a house to them, they probably couldn't care less if it's worth $10 or $10 million.

    • reactor-au on 12/09/2023 - 08:25

      Its a Ponzi scheme.
      It's why we have to keep importing young workers to pay for the old people.
      Why the retirement age is creeping higher and higher.
      Why the old people now have it better than any other generation, and every later generation will be worse off than the next.

      • Drakesy on 12/09/2023 - 12:28
        +1

        Agreed,
        We're heading the same way as Japan where working hours increased, birth rates plummeted, and the economy went sideways for 20 years.

        But its ok because we're preserving boomer's wealth.

    • iminabrons on 12/09/2023 - 12:22
      -2

      Stop being self-righteous. Given half the chance you will do the same.

      • Drakesy on 12/09/2023 - 12:26
        +1

        Actually i wouldn't because i have a moral compass and intend to leave a world that is better for my offspring.
        And no i'm not a poor socialist complainer actually quite the opposite.

        But hey, each to their own.

        • iminabrons on 14/09/2023 - 10:59

          " intend to leave a world that is better for my offspring"
          To my mind living in the world of today is far, far better than living in the worlds of the fifties, or the sixties, or the seventies, etc, etc.
          BTW. I am a 77 y.o. person living happily and content on a single pension in a rented one-bedroom unit.
          As for yourself, could your existence be better? Sure but only when compared to some imaginary perfect civilization you hold in your mind.

          • Drakesy on 14/09/2023 - 11:24

            @iminabrons: See here

            We're the first generation that will be poorer than the preceding one.

            • iminabrons on 18/09/2023 - 10:57

              @Drakesy: "We're the first generation that will be poorer"

              What generation are you? X, Millennial, or Y.
              If you're a Millennial then it must be X's fault and if you're a Y then it must be the Millennial's fault.

              Why? Think of it this way when most of the Boomers are dead all their money and assets go to the X's and the Millennials.
              So if you are one of the above, stop whinging you get it all for free😂

  • mskeggs on 11/09/2023 - 12:10

    Did the agents give any feedback? It may be other issues with your application.
    For example, if you wanted to keep a pet I would expect many knock backs.

    My limited experience of current rentals is they are very busy, but are frequently let at the listed price. This isn't in Parramatta, but in Strathfield and Marrickville, so not unpopular locations.

  • ramb9 on 11/09/2023 - 12:13
    +1

    Right, had many applications for a property in 2150. The key factor in decision-making for me, was 'savings'.

    To me, this shows applicants ability to always pay rent and never reach a point of arrears.

    Strangely enough, there were applicants offering more and earning more but I went with the one that had bank statements showing healthy savings habits in the 6 months or so of statements they showed.

    It's a mystery to me how people earning $150-200k pa have close to $0 savings in their bank accounts, which just feels like a massive red flag.

    My agent spent the time walking me through their overall "feel" of the potential tenants so it does good to build rapport with the agent.

    • l0nglive on 11/09/2023 - 12:20

      That I can understand, so we attached payslips and saving acc bankstatements of 100k +. Still failed :(

      I do not expect the properties given to me. But I think an open auction is better for everyone. The agents seem not want to tell exactly why, just to keep renters in fear I guess. The recent legal development of banning rental bidding doesn't help at all, which is my concern. Why move backwards with blind bidding ???

    • bobbified on 11/09/2023 - 12:32

      It's a mystery to me how people earning $150-200k pa have close to $0 savings in their bank accounts, which just feels like a massive red flag.

      It's not that unusual for someone to be asset-rich, but cash poor.

      • Drpepper666 on 11/09/2023 - 12:46
        +3

        asset rich = beamer and bags

      • CyberMurning on 11/09/2023 - 12:57

        but they need to have some cash too if they are well educated investors… for rainy days… etc

        • bobbified on 11/09/2023 - 15:37

          It doesn't take that long to sell shares and convert it to cash. And of course, there's overseas accounts.

  • CyberMurning on 11/09/2023 - 12:13
    -1

    its call supply and demand… the limit is the sky

  • bobbified on 11/09/2023 - 12:24

    What I hate the most is that I don't know the fair price of the market

    Can't you find out from looking at other similar properties in the market? I mean, you said applied for 8 properties and knew that they advertised "well below the normal rate". If you offered $40-85 over the advertised rate and everyone else is offering that amount over the "normal rate", then yours will definitely not be the highest offer.

    And as others have said, price may not be the only factor. I know that when I used to go to view properties, I'd intentionally go and have a pleasant conversation with the agent, have a laugh and ask a few questions so that I'd create an impression. That way, they'd remember me when it came time to assess applications. (Otherwise there'd be so many applicants and there's probably no reason to choose you over anyone else). It worked every time (for me, anyway).

  • mskeggs on 11/09/2023 - 12:36
    +3

    It's not clear if your priority is getting a place to live, or getting the best deal.
    If it is a place to live, try sorting from oldest to newest, a place that isn't rented straight away is likely overpriced or has some other drawback. Review in this order till you find one that you can afford and live with, and you will be likely to get it.

    If you want the best deal, you will need to keep up the approach of targeting underpriced listings and offering more, but many others are also doing this, so it will be frustrating.

  • papaya on 11/09/2023 - 12:39
    +1

    I rent in 2150 and generally have success securing a rental even without offering much more.. and I have a pet and kids.

    I always include a cover letter introducing ourselves, talking about what excellent tenants we are, clean, reliable, never miss a rental payment, always received full bond back. I highlight our stable employment and how well behaved our pet is etc.

    Agree with bobbified, try and make yourself be likeable and memorable to the agent. Sometimes it helps, sometimes it doesn't. I also might give the agent a friendly call on Monday and it's helped get my application to the top of the pile to review.

    Could it be one of your references letting you down?

  • tsunamisurfer on 11/09/2023 - 12:47
    -1

    Thanks OP.

    I have been saying this for years.

    Make rental bidding an open and transparent option, like an auction but without a stupid vendor's bid.

    This gives everyone a chance to engage in the market, and lets people know what the equilibrium price is.

    But the top bidder may not necessary get the property if their history / references don't check out.

  • jv on 11/09/2023 - 13:02
    +9

    Albo opening up the flood gates for immigration when there is not enough housing.

    No planning, no thinking ahead… Too busy taking holidays overseas to care about what is happening back home.

    Supply and demand…

  • abently on 11/09/2023 - 17:41
    +2

    Firstly, please check the rent you are offering is definitely above market rate and not advertised rate.

    You may also have to put together a cover letter to alleviate any preconceived ideas the REA / landlord may have as discussed.

    Finally, check that you do actually have good references.

    If that is all good, you may need to get on the front foot and touch base with the local agents once a week to see what's maybe coming to market.

    Remember as a landlord, we have no issues leaving a property empty for 2-3 weeks just to find the best possible tenant. Saves a lot of hassle in the long run.

  • Loopholio on 12/09/2023 - 09:16

    You don't mention references. Do you have references?

  • Oahu on 12/09/2023 - 10:41

    Offering above the ask and 6 months in advance worked for us. Worth a try.

  • Gros21 on 12/09/2023 - 11:21

    Well if you offer XXX ammount then congrats thats the market rate and what its worth. While it makes it hard its the current market.

    YOU are offering over the asking amount its not the LL being greedy, you are just throwing money at him to beat other people. Ever one would do the same if selling an item open to offers then take the best.

  • ColtNoir on 12/09/2023 - 11:25
    +1

    You’re not alone but stop offering more than is advertised, it only leads to worse outcomes for everyone. That could be a reason in itself you’re getting rejected, so the RE doesn’t risk being done for rent bidding.

    I’ve only once offered more and that was my first rental, they told me the price is the price, I’ve never offered more since then.

    In todays current rental market don’t be discouraged by rejection. There were probably 200 applicants, many as strong as you.

    What have you done to differentiate yourself from the 200+ other applicants?
    I personally wrote a cover letter, introducing myself, my wife and pets (including that we had pet insurance). I also called each RE to confirm everything was fine with my application, I knew it was but my name was now more likely to be front of mind in the pile of applicants.

    I got our current rental within less than 10 applications.

    • witheredcouch on 13/09/2023 - 15:43

      Accepting more has no risk of being done for rent bidding.

      In the current market, (Vic), we offered over for every place, and were advised by the real estate agents that they couldn't disclose what the places had gone for, but they could say that it was more than we had offered. We eventually found a place, and I do believe a cover letter as well as recommendation from another real-estate agent from the same company helped.

      • ColtNoir on 17/09/2023 - 08:21

        Accepting in theory, yes. The issue is could they be seen as encouraging rent bidding verbally etc by accepting one of them.
        It would be far safer for a RE to just accept the listed price then they don’t have to defend anything.
        What’s an extra 50cents a week vs the cost of defending a claim?

  • mqi on 12/09/2023 - 14:42
    -1

    self managing landlord here.
    Yes I encourage you to ring and ask why you got rejected and where you need to be to get a rental.
    In most cases it will be matter of offering more. Rarely other factors come into it. Normally those who can offer more are from wealthy families or have high paying in demand jobs. So I don't really look at savings in those situations.

    I advertised my property earlier in the year at what I thought was market price (as compared to other rentals in the same building)
    Before the first inspection, I received an offer that was 10% higher than my advertised price from an international student who was still in overseas.
    On the day of the inspection, there was 100 odd people who came thru. It was mad!
    I won't be repeating that again it was hectic! - So I don't think agents are doing the whole fomo thing on purpose.

  • lainey13 on 12/09/2023 - 23:05

    RE asking for rent bid is actually illegal, but its not illegal to offer…

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