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Old 07.03.2012, 11:54
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Estate Agents - what's OK to ask / not ask

Quick question here:

When viewing a house, what are people's experiences with asking about the 'political' side of things - such as:

- How many offers are in so far? How many have been refused, etc?
- What is the situation with the vendor, as regards the value of the house (if it seems to be in the 'fantasy price' category)?
- Is the vendor prepared to negotiate on price ?
- Is it OK to ask the estate agent what their opinion is of the asking price?

For the last house we saw, these questions seemed to lie very much in the difficult "not really for discussion" category... The house concerned seems a bit overpriced, and (after the awkward conversation, interspersed with a few nod-nod-wink-winks) the estate agent seemed to be aware of this, without saying as much. Agent's advice was to 'go and do some research and put in an offer that you think might be right'. (Which leads me to think that the vendor had his own ideas as to how much his house is worth - irrespective of what anyone else thinks.)

Cheers,
Chris
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Old 07.03.2012, 12:20
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We asked all of the questions above except the one about the agents thoughts on the price.

We took all of the houses we were interested to our mortgage bank and had them evaluate. If they thought everything looked ok value wise we then set up another appointment to view the house and brought an independent appraiser who would do the same evaluation so we could compare with the bank. Fortunately he was a family friend and has been in the business for over 30 years so his input was invaluable.

You should be able to ask all of the questions you mentioned, if the agent was acting dodgy we'd probably have walked away.
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Old 07.03.2012, 12:54
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Re: Estate Agents - what's OK to ask / not ask

The agent is acting for the seller and is going to be trying to get the most he can for the seller and so probably won't answer your questions. It's up to you to do the research and put in an offer you think is reasonable. If you get a refusal it's up to you to come in with a better offer if you feel it is appropriate. I certainly would not trust any information an estate agent might give without having done my own research. After all the agent is working for the seller and his commission is based on the price he can get for the property.
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Old 07.03.2012, 13:28
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Re: Estate Agents - what's OK to ask / not ask

@JanerMacP - we dragged the last two houses we saw to the bank, but the bank would only give verbal indicators (first was "bargain", second was "not worth it, run away"). I don't know if all banks are like this.

@Nixi - my colleague at work asked his friend (who works for a large estate agency here, so horse's mouth here) to suggest a couple of places. Her comment, when I said they were above budget, was simply to negotiate hard on the price - she only gets a commission on the number of places sold; irrespective of the sale value.

Anyway, we know the processes with surveyors and banks very well, but it's just about getting an initial feeling for the figures and situation on the first visit. I mean, if you find out the house has been on at 1M for the last 9 months, and there's been a dozen serious offers of around 900K that have all been refused (assuming just on price), then that's quite useful information to know at the start.

In any case, we have done a lot of research so far - the local Gemeinde were extremely helpful in this respect

Cheers,
Chris
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Old 07.03.2012, 13:42
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Re: Estate Agents - what's OK to ask / not ask

While you are working through this process, do not forget for one minute that there are only two people an agent works for:

1. Himself
2. The sellers.

In that order.

Anything an agent tells you should be treated with a degree of skepticism, and independently verified. Disclosure laws and the various other buyer protections that you might be used to in your country are unknown here. Buying property is very much caveat emptor.

(And as I'm learning, caveat venditor as well - as point one above. )

Back before the property bubble, one could ask such questions and have a good chance of a quasi-frank answer. But in today's hot property markets an agent doesn't have the same incentive to help a buyer, as chances are there are other folks lined up ready and willing to make an offer.

So as JanerMacP says, do your own research.

I've found the folks at our bank very helpful. They have research published on price development for the areas I've been interested in, which has been a great reality check. The bank can do an analysis of the particular property if needed. (The latter might cost something, depending on how much the bank wants your business.)

Other good resources are the local Gemeinde and cantonal Bauamts, and if in the Landwirtschaft zone, the Amt für Raumentwicklung. These will tell you what you (theoretically) can and cannot do with a property - very important if you are considering something in need of renovation - which in turn affects the price vs. value equation.

(As one very helpful gentleman at the Gemeinde Bauamt said when I showed him the price of a property I was considering: "Sie spinnen!" )

Having said that - in hot markets the sale price of a property is whatever the sellers/agent think they can get. They may indeed be mad, but so is the market. Fundamentals have gone out the window in the last year or so, there seem to be lots of folks with more money than sense today. One really needs to consider one's long term goals in relation to the price of the property. If resale is a key issue - think long and hard, given today's prices.

Also be aware - the bank will only lend what they believe to be the fundamental value. If the bank thinks the property is worth one million, and the sellers are asking two - the bank will lend 80% of 1 million, you need to come up with the other 1.2 million. So do get at least a quick and dirty evalutation from your bank before making an offer.

And lastly - before making an offer, do chat with a lawyer. I know that the polite fiction here is that one doesn't need legal help... but given the craziness of the market, given the craziness of many sellers, given that you are putting yourself on the line for a couple of million in a country whose legal system you might not fully understand... a chat with a lawyer is usually a good investment.

Good luck - hope all goes well with the purchase.
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