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Old 17.11.2010, 10:36
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Buying a Flat: Have you heard of a closed bid system in Switzerland?

Hi
I am looking to buy a flat in Aargau (Baden area). I saw a flat i liked, got the nice brochure (with a price on it - which seems a fixed price). I went to see the flat, decide it suited and said i would buy it. Then i was told by the agent that i needed to put a bid in for the flat and after all others see the flat, the person with the highest bid gets the flat. When i put my bid in, i expressed that if someone put in a higher bid i wanted to be informed, so i could counter-bid. The agent said 'no'. That she would not disclose the other bids. So if i put in a bid 20-30k higher, i will never know if i was the only bidder or if i was close to the other bids!! Actually you could end up paying far more for the flat. I asked at work and no one has heard of this before. Has anyone had the same experience...with a closed bid system in Switzerland???
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Old 17.11.2010, 10:42
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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Hi
I am looking to buy a flat in Aargau (Baden area). I saw a flat i liked, got the nice brochure (with a price on it - which seems a fixed price). I went to see the flat, decide it suited and said i would buy it. Then i was told by the agent that i needed to put a bid in for the flat and after all others see the flat, the person with the highest bid gets the flat. When i put my bid in, i expressed that if someone put in a higher bid i wanted to be informed, so i could counter-bid. The agent said 'no'. That she would not disclose the other bids. So if i put in a bid 20-30k higher, i will never know if i was the only bidder or if i was close to the other bids!! Actually you could end up paying far more for the flat. I asked at work and no one has heard of this before. Has anyone had the same experience...with a closed bid system in Switzerland???
We have encountered this a few times with houses we looked at. At the moment people are offering more than the asking price.
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Old 17.11.2010, 10:44
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

yep, had it on a house we looked at, so we walked away (pretty good house too) its just a waste of everyones time imho if you want to auction it then auction it ffs

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Old 17.11.2010, 10:46
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

Earlier this year, my friend's neighbour put up his flat for sale. I saw it advertised in Homegate for something like Fr.1.7m.

A couple of months later, I asked my friend if the flat has been sold. She said that there were so many enquiries and the guy couldn't be bothered (he wanted to divorce his wife and move into his gf's place ASAP) so they decided to do a closed bid. Everyone put a number in an envelope and the highest wins, end of story. Apparently they got a few offers slightly higher than the asking price, some were slightly lower, but one nutcase put in Fr.2.5m.

So it's not the first time I've heard about this closed bid system. Seems to really favour the seller by encouraging potential buyers to throw in everything they've got straight away.

That was in Uitikon, Zurich.
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Old 17.11.2010, 10:46
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

In high demand areas, this is now a "norm". The agent/owner may even want to have a second round of bidding among the few of the highest bidders, before they pick who they will sell to. I have been through this once or twice. Then we decided to look elsewhere and bought that.

Good luck.
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Old 17.11.2010, 10:49
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

Yes!!
Few weeks ago we saw a flat advertised at a really good price in Zurich.
We got them to send all the papers, went to see the flat (hundreds of people there) talked to the lady(she was from the Kantonal Bank ) and realised that was a starting price we had to put a bid in
We phoned a couple of days later to see if we could go and look again (after all its not sugar) the answer was no, we have put in a low bid but dont think we stand a chance.
My hubby didnt like not being able to go and have another look and also as you say you could end up paying a lot more than what its worth
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Old 17.11.2010, 10:50
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

Sounds very similar to the Scottish system (not that that helps, just pointing out that it's not an unusual system and is the primary method of house selling in some countries).
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Old 17.11.2010, 11:14
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

Thank for all the replies...i was starting to feel they were giving me the run around, but it sounds like the system here.
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Old 17.11.2010, 11:28
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

I sold a place and the price put on it was simply a guide. From six viewings, I got 4 written offers and only one was below the asking price.

The seller can choose to sell to whom he or she wants. Naturally, the sale went to the highest bidder.

I have the feeling that I could have put the guide price 200k higher and still sold above the asking price.

There are only two questions; what is the place worth to you and (equally importantly) what is the place worth to your lender.
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Old 17.11.2010, 11:34
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

yet another pyramid scheme... call me cynical
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Old 17.11.2010, 11:39
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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yet another pyramid scheme... call me cynical
maybe your definition's different to mine.

it's a case of (lack of) supply and (huge) demand.

http://en.wikipedia.org/wiki/Say's_Law#Keynes_vs._Say is more apt, I'd say.

You probably question the sustainability and ROI. Certainly, buying high limits your ROI ..... and unless something significant happens in Switzerland, it appears that the market is sustainable.
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Old 17.11.2010, 11:44
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

It is a simple system designed to shaft the buyer - quite literally "trousers down and bend over" territory.

There is nothing more to be said on the topic.

Look elsewhere unless you really can afford to buy up to double or triple the starting price...

Last edited by Carlos R; 17.11.2010 at 11:51. Reason: typo
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Old 17.11.2010, 11:49
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

I've walked away from a few semi-interesting houses where a closed bid was required - it's simply not the way I wish to do business, far too opaque for my taste (and pocketbook).

Once after walking away because of the closed bid requirement the agent called me a few months later, encouraging me to put in a bid. I said no again. A few weeks after that, he called again saying the closed bid requirement had been dropped... I assume that other potential buyers were also unwilling to go with the practice.

If you are uncomfortable with anything surround the purchase of a property, walk away. At these prices, making a mistake can seriously hurt.
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Old 17.11.2010, 12:15
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

Just a note on closed bidding, it's actually not such a bad idea if it's carried out independently. and most importantly if the selller is OBLIGED to sell to the highest bidder. in this case it's completely fair, and the bidders will put what they think is a fair price and not try to out bid other bidders...

of course I'm just day dreaming, and market economy will never be free...
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Old 17.11.2010, 12:18
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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Just a note on closed bidding, it's actually not such a bad idea if it's carried out independently. and most importantly if the selller is OBLIGED to sell to the highest bidder. in this case it's completely fair, and the bidders will put what they think is a fair price and not try to out bid other bidders...

of course I'm just day dreaming, and market economy will never be free...
I would agree to this pratice only if it is transparent. You can see what are the other bids and you can bid back to a higher price.
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Old 17.11.2010, 12:19
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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I've walked away from a few semi-interesting houses where a closed bid was required - it's simply not the way I wish to do business, far too opaque for my taste (and pocketbook).

Once after walking away because of the closed bid requirement the agent called me a few months later, encouraging me to put in a bid. I said no again. A few weeks after that, he called again saying the closed bid requirement had been dropped... I assume that other potential buyers were also unwilling to go with the practice.

If you are uncomfortable with anything surround the purchase of a property, walk away. At these prices, making a mistake can seriously hurt.
I personnaly have had bad experience with real estate agents in Switzerland...far from being honest. I'm sure the guy did not even have other bidders. They'd use any trick to sell you at the max price. I decided to focus on private to private transactions and stick to the limit price I set to myself.

See my other post about Gazumping.

Last edited by MrVertigo; 17.11.2010 at 12:23. Reason: added reference
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Old 17.11.2010, 12:19
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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I would agree to this pratice only if it is transparent. You can see what are the other bids and you can bid back to a higher price.

thats called an auction, whats the point in a sealed bid process where you can bid again. sorry its a big rip off.
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Old 17.11.2010, 12:36
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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Thank for all the replies...i was starting to feel they were giving me the run around, but it sounds like the system here.

I would not say it is the system or the norm. There are many properties listed for sale privately by their owners or agents and they are not interested in playing these kinds of games. They've got an asking price on the property, and they would be happy to sell it for that. They are not expecting more.

Many properties are sold privately, you might be better off concentrating on these rather than properties where agents are involved. The agent represents the seller here not the buyer.
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Old 17.11.2010, 12:38
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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I would not say it is the system or the norm. There are many properties listed for sale privately by their owners or agents and they are not interested in playing these kinds of games. They've got an asking price on the property, and they would be happy to sell it for that. They are not expecting more.

Many properties are sold privately, you might be better off concentrating on these rather than properties where agents are involved. The agent represents the seller here not the buyer.
the agent gets i guess a percentage of the transaction, so his/her interest is to push the price to the max.
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Old 17.11.2010, 12:59
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Re: Buying a Flat: Have you heard of a closed bid system in Switzerland?

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the agent gets i guess a percentage of the transaction, so his/her interest is to push the price to the max.
The agent gets a commission. I have met agents who really are keen to sell to a potential buyer and they try to make the deal work because if they don't sell it, there is 0 commission. It is not always about pushing the price up, but more a question of reaching an agreeement by finding the balance between the seller's expectations, a price which was given to the name by the agent, and what a buyer is prepared to pay.

Some sellers are difficult, they won't budge on price. The market dictates what a house is worth. The agent can put a price on it, and there can be independent appraisals as well but at the end of the day it is what someone is prepared to pay for it.

In many cases the agent adds no value to the process, just increases the property price as the seller has to factor in his/her commission.

Our neighbours have just sold their house privately. They didn't use an agent and they placed just one ad in a local real estate agent's free web service.
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