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  #21  
Old 19.05.2012, 02:12
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Re: House offer faux pas?

It could be that the seller/agent is convinced that she already took into consideration the renovation costs and is asking the realistic price. So she is expecting to receive offers at least very close to the asking price if not higher (not uncommon here). Offering substantially under the asking price and then meeting somewhere in the middle is not the way it's usually done here. Very often sellers consider their asking price to be a starting point for choosing a "suitable" family for their house or for playing the highest offer over the asking price game.

Although if the property is in a very poor condition than the situation is not so typical and anything can happen. We were looking at an apartment near Zurich which required a considerable amount of renovations and during the viewing with the agent asked him if the seller is flexible with the price. The answer was "perhaps a little" so we talked a bit more later on and figured that we could offer about 7% under the asking price.

In the end we went for a house in the same area. We knew that we had to act fast as houses last on the market only a few days here, if they even make it to the market...

The owner was selling without an agent and I went to see the house with both my nice kids The house needed a new kitchen and a lot of other work but was priced reasonably (the location is excellent) and I made a full asking price offer on the same day. After about a week of showing the house to others the owner let us know that she would like to sell the house to us. I went to the bank and had a quick valuation done by the banker which turned out to be higher than the sale price so that was good news, although obviously I was facing the renovation costs. So I took the offer of mortgage from the bank to the owner and said: "Here is what the bank is prepared to lend us based on their valuation and we have just enough cash for the down payment for it. But renovation work is required for us to be able to live in it, especially the kitchen, so would you mind lowering the price slightly so that we have some cash to at least start the renovation". The owner said she already made the asking price low enough to account for the house condition. I was being very careful and very polite and asked what, in her opinion needs to be replaced and at what total cost? She said this and that for about 120K total. So I said the bank has valued this house at X fr. (slightly higher than the asking price) but meaning the house in move-in condition. So I showed her that [asking price] + 120 K is higher than the bank valuation. And then suggested a compromise: she lowers the price by slightly less than the amount of installing a new kitchen and I bare the costs of the remaining renovation work. To my surprise she agreed!

So we managed to bring the price down after having offered the full asking price! We bought this house and I ordered a new kitchen from Germany which was a lot cheaper and also we did a lot of work ourselves, like removing wallpaper, stripping carpeting and installing parquet floors, etc. which took some time and effort but was fun. The kids and their friends had a ball helping remove the soft under-carpeting, spraying the walls with water and so on. This summer I'm looking into converting the attic into living space which should be fairly easy (I saw that the house had potential on that first visiting day).

Perhaps not a very typical story, but like I said, I'm pretty sure anything could happen when the property clearly is in need of renovation.
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  #22  
Old 19.05.2012, 19:40
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Sedebu, this asking price vs expected in Romandie is for private sales, and not newly developed properties, right?
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Old 20.05.2012, 01:45
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Re: House offer faux pas?

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Sedebu, this asking price vs expected in Romandie is for private sales, and not newly developed properties, right?
Correct. However, for new developments, you may try if sales aren't kicking. I know of two projects in downtown Nyon which are having problems selling flats and where the developers are apparently proposing discounts (if you ask for them) in the form of free underground parking lots. The problem seems to be that no bank is willing to finance these developments at 80%....
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Old 20.05.2012, 11:20
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Re: House offer faux pas?

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Correct. However, for new developments, you may try if sales aren't kicking. I know of two projects in downtown Nyon which are having problems selling flats and where the developers are apparently proposing discounts (if you ask for them) in the form of free underground parking lots. The problem seems to be that no bank is willing to finance these developments at 80%....
It's not so much to do with the banks' willingness, is because they are way over a market price.

The banks are ready to finance 80% of their valuation, not some inflated developers price !
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  #25  
Old 20.05.2012, 20:18
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Re: House offer faux pas?

The UK "market price" has absolutley zip to do with the Swiss housing market, don't even compare, there's nothing to compare !
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