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Old 03.06.2021, 15:16
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Purchasing property on an "auction"

Hi all. We are considering buying property here in Switzerland. We noticed that for all the listings we have seen, the price in the ad is not the final price, but the "Ausrichtungspreis", or "guideline price" in English, which in fact is a minimum price for a blind auction The owner will select the highest bidder.

How much do bidder normally offer on top of this minimum price in these type of auction in %, in your experience?

PS - I know "it depends", that's why I am asking "in your experience", in case you bid (and won) such a bid or if you know about some relevant research about the housing market.

Thanks!
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Old 03.06.2021, 15:29
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Re: Purchasing property on an "auction"

We are currently in the same position. And it is a mega interesting learning curve.

First point is the seller chooses the buyer. That may not be the highest bidder. You have to sell yourself and write a letter of motivation on why you want to buy the property. I am sure in most cases it is the highest bidder, but it doesnt have to be.

How much do we offer on top. Well basically what we can afford or think we can go to. Theres a lot to consider. We wont offer more than the bank values the place at and then uses the tolerance, so it has to be with in the banks valuation criteria. Then we have to consider what that really means on monthly payments, on the local tax you will be paying compared to where you live now. For us we consider several factors.

But finally its what you think you would like to pay and what you think the winning offer will get you. Sadly despite paying a HUGE amount of money for a place here, it is unlikely to truly be a dream pad... At least with our budget
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Old 03.06.2021, 16:36
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Re: Purchasing property on an "auction"

I can second the note on not necessarily the highest bidder...

When we bought, the seller approached us and told us we weren't the highest bidder, and that someone else had bid ~95k more.

They asked us what we would do in their shoes, as they preferred us as buyers... but wanted the extra money.

We told them we really liked the house, but couldn't/wouldn't offer more.. So we agreed that they would stay in the property a little longer (allowing them to finish the purchase of their new house and move with calm), but buy at our price point

This worked well, as it didn't cost us anythign extra (had 3 months notice period anyhow on my rental).

(Side note I forgot - the house we ended up buying was about 400k MORE than the bank valuation... and the only way we got the mortgage approved was to raise our deposit to nearly 50%)
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Old 03.06.2021, 16:38
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Re: Purchasing property on an "auction"

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I can second the note on not necessarily the highest bidder...

When we bought, the seller approached us and told us we weren't the highest bidder, and that someone else had bid ~95k more.

They asked us what we would do in their shoes, as they preferred us as buyers... but wanted the extra money.

We told them we really liked the house, but couldn't/wouldn't offer more.. So we agreed that they would stay in the property a little longer (allowing them to finish the purchase of their new house and move with calm), but buy at our price point

This worked well, as it didn't cost us anythign extra (had 3 months notice period anyhow on my rental).
you didn't say "in your shoes, i'd sell it to us at 200k less because we're so awesome"?
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Old 03.06.2021, 16:38
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Re: Purchasing property on an "auction"

what happened to old Swiss rules to set prices 40% above market and hope for the blue bird ? or now they sell even these with extra atop?
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Old 03.06.2021, 16:43
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Re: Purchasing property on an "auction"

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what happened to old Swiss rules to set prices 40% above market and hope for the blue bird ? or now they sell even these with extra atop?
40% will see your house dissapearing like a proverbial hotcake...

One house we went to see needed SERIOUS rennovation, but was in a nice location with a really nice garden... On the first day it was listed, we contacted the estate agents, and went to see it the same week.

We called out bank manager on the same day as viewing the house, and called the esate agency the day after offering the asking price - which in itself was about twice what the bank valued the property at... the seller had already accepted an offer hours before, at substantially more than we were offering...

Or so we were told...

It's a tough market... and the bubble will burst at some point...
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Old 03.06.2021, 19:19
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Re: Purchasing property on an "auction"

I've read stories of sellers choosing buyers because they liked them but normally you want to look like a convincing buyer, so try to show you have a mortgage arranged or some sort of pre-approval, that you have a significant cash deposit so the bank won't be worried, you have already got a good notary and, if necessary, that you obviously qualify as a buyer because of residency (this might sound obvious but no harm in stating there are no impediments), and that you'd hope to complete the purchase quickly if the seller is willing. All this can fit in a one page letter.


My neighbour's place went to the highest bidder... but their financing fell through so it went to the next best.
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Old 03.06.2021, 21:26
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Re: Purchasing property on an "auction"

The story from the other side: I have sold 2 properties.

First one the agent asked us what our target was and whether we are going to sell once the price is met or start a bidding process. We were not interested in playing games because we have already committed to something more expensive, so the most important thing for us is the certainty that we are going to get the minimum that we needed by certain date. The agent suggested a target price that was set at about 20% above our minimum price.

We had a few open viewings, and some very interested parties came back with many many questions. Then a couple saw the place one morning and by lunch time had agreed to the asking price without asking any other questions and made an appointment to sign the reservation form in the afternoon. I remember them from the morning. People like us, I thought. Family with 2 kids, and I forgive him for being an Arsenal fan. That afternoon, while sitting in the agent's office with them reading through the documents, another couple walked in and while the agent was politely trying to tell them to go away, the lady shouted out that they would be willing to pay more than the asking price and asked how much I wanted. Mr. Arsenal immediately took a pen and re-wrote the number on the form which was 50k more than our asking price and basically said that is all they can afford. He didn't really have to do that because I really didn't want to play games and besides, I like him (and we are friends now). Well, I was anyway happy to take the additional 50k.

The agent said I could have gotten even more if I opened it to a bidding process, but I also suspect that she leaked the timing of our appointment to the other couple...

Well, I started out simply hoping to get a minimum price, but I realized that selling to this particular couple was also important to me as the couple fell in love with the place and how they felt was more important to them than all the little details and questions that everyone else was asking and frankly being very annoying about. I still remember the look he gave his wife that morning within 5 minutes of looking around - raising an eyebrow and then nodding with a little smile as if they found some treasure that no one else knows about. In the few minutes I spent talking to them that morning I was able to build some sort of connection (football, and the wife has similar background to my wife).

So, if you were buying from me, be ready to make a quick decision (know what you want, get your finances lined up), don't ask too many annoying questions, or really dumb ones which you should already know before you even make an appointment to waste my time, try to make some sort of little connection with me and my wife (but not be too intrusive), and talk about how great your kids will feel in my place. I will probably be happy to sell to you than to go through the stress of a bidding process.
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Old 03.06.2021, 21:35
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Re: Purchasing property on an "auction"

sounds like sky is full of blue birds now ...

when I bought our home - I was told even so I wasn't highest bidder - I was guarantee of fun an 'non typical complaining swiss neighbour' as owner lived next home .. turned out well - she had a party few times a year , always got invitation - never attended ... no by ball
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Old 04.06.2021, 06:46
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Re: Purchasing property on an "auction"

The bidding process doesn't always mean higher prices, we offered 1.1 on an asking price of 1.8 on a property as per bank value. The agent came back to us and said the best offer was 1.4 but the owner would accept 1.25 from us as they didn't like the other buyer, we couldn't get finance so it was sold for 1.4. It's not a very transparent system.
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Old 04.06.2021, 08:32
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Re: Purchasing property on an "auction"

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The bidding process doesn't always mean higher prices, we offered 1.1 on an asking price of 1.8 on a property as per bank value. The agent came back to us and said the best offer was 1.4 but the owner would accept 1.25 from us as they didn't like the other buyer, we couldn't get finance so it was sold for 1.4. It's not a very transparent system.
Wow, those are big discrepancies, very surprising.
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Old 04.06.2021, 21:40
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Re: Purchasing property on an "auction"

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The bidding process doesn't always mean higher prices, we offered 1.1 on an asking price of 1.8 on a property as per bank value. The agent came back to us and said the best offer was 1.4 but the owner would accept 1.25 from us as they didn't like the other buyer, we couldn't get finance so it was sold for 1.4. It's not a very transparent system.
Why would they lose 150k because "they don't like the other buyer"? Money doesn't stink (unless they are very idealistic :-) - or living nearby). That sounds to me like an execuse... Are you sure it was sold eventually for 1.4?
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Old 04.06.2021, 23:06
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Re: Purchasing property on an "auction"

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Why would they lose 150k because "they don't like the other buyer"? Money doesn't stink (unless they are very idealistic :-) - or living nearby). That sounds to me like an execuse... Are you sure it was sold eventually for 1.4?
I got two offers - one which was 2x the price - and politly declined
second from an 'gentelmen' that first told me when I am going to move and it was 1.8x ... - he'd have no chance to have it even for 10x the price - who's he - Roger Federer ?

main reason however was that house was not for sale
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Old 05.06.2021, 09:03
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Re: Purchasing property on an "auction"

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Why would they lose 150k because "they don't like the other buyer"? Money doesn't stink (unless they are very idealistic :-) - or living nearby). That sounds to me like an execuse... Are you sure it was sold eventually for 1.4?
Yes, it is rare but it does happen here.
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Old 05.06.2021, 09:11
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Re: Purchasing property on an "auction"

Two years ago we achieved the highest bid for a property that was already 150 years in the same family. In the end it went to a single pensioner who would be living by himself in a 300m2 house. And who had bid about 100k less than us.

The reason? According to the family, we wanted too much of a renovation of the place (green bathrooms, single pane windows 1960s kitchen you get the vibe), and preferred someone who would leave it "original".


Personally I think that if you are buying in a region with a very liquid housing market (which is def. not our region) the bidding/transaction process might become more rational.
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Old 05.06.2021, 09:37
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Re: Purchasing property on an "auction"

Coming from a country (UK) where property is seen as a commodity to be bought and sold and often providing huge profits, the Swiss attitude to property can be a puzzle.

As a gross generalisation, the Swiss buy only once particularly with a new development. They move only to go to the old folks’ home or graveyard.

As a result I have seen a number of occasions where properties were sold not on price but on how the buyers would fit in with the neighbours - and what plans they had, or better didn‘t have, with the property once they moved in.

The Swiss regard their house as a member of their family - and treat them accordingly...
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Old 06.06.2021, 12:04
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Re: Purchasing property on an "auction"

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Coming from a country (UK) where property is seen as a commodity to be bought and sold and often providing huge profits, the Swiss attitude to property can be a puzzle.

As a gross generalisation, the Swiss buy only once particularly with a new development. They move only to go to the old folks’ home or graveyard.

As a result I have seen a number of occasions where properties were sold not on price but on how the buyers would fit in with the neighbours - and what plans they had, or better didn‘t have, with the property once they moved in.

The Swiss regard their house as a member of their family - and treat them accordingly...
So when you're in the process of checking out the property, and selling yourself to the seller, you mention how you love the decor / exterior / fittings, and would love to just restore them to their true magnificence, and not mention that you plan to knock down and rebuild once the paperwork's all done?
Sounds like a solid plan.
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Old 06.06.2021, 16:33
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Re: Purchasing property on an "auction"

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As a result I have seen a number of occasions where properties were sold not on price but on how the buyers would fit in with the neighbours - and what plans they had, or better didn‘t have, with the property once they moved in.

The Swiss regard their house as a member of their family - and treat them accordingly...
Exactly. Try buying a property in one of the more popular mountain resorts. Either you find properties to be crazy expensive, or really terrible requiring expensive renovations. So where is all the good stuff? Simple - they all go to family, friends or friends of friends. Only the ones nobody wants will end up in the open market.

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So when you're in the process of checking out the property, and selling yourself to the seller, you mention how you love the decor / exterior / fittings, and would love to just restore them to their true magnificence, and not mention that you plan to knock down and rebuild once the paperwork's all done?
Sounds like a solid plan.
Either this, or you pay through your nose.

Which means that, there is still a chance to buy something in Switzerland without breaking the bank, you just have to figure out how and also be very lucky.
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Old 06.06.2021, 17:32
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Re: Purchasing property on an "auction"

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Coming from a country (UK) where property is seen as a commodity to be bought and sold and often providing huge profits, the Swiss attitude to property can be a puzzle.

As a gross generalisation, the Swiss buy only once particularly with a new development. They move only to go to the old folks’ home or graveyard.

As a result I have seen a number of occasions where properties were sold not on price but on how the buyers would fit in with the neighbours - and what plans they had, or better didn‘t have, with the property once they moved in.

The Swiss regard their house as a member of their family - and treat them accordingly...

Exactly as the last house we bought in the UK - for far below the sale price, because the elderly owners liked our family and our attitude to the house and garden. And we respected it, and lived there very happily for 29 years. So not 'just' in Switzerland, some houses are very special.
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Old 06.06.2021, 23:24
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Re: Purchasing property on an "auction"

I'm just curious, does the Swiss market work that way regarding appartments too, or just houses?
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