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In France, there's no such thing as paying over the ask price. You are forced to sell to the first buyer who offers to pay the ask price. I suspect that this is
by victorNicollet 9y ago
In France, there's no such thing as paying over the ask price. You are forced to sell to the first buyer who offers to pay the ask price. I suspect that this is done to prevent prices from rising too quickly.
- jandrese 9y agoAre asking prices artificially limited somehow, or do people just set the price high so they can negotiate between potential buyers?
- saiya-jin 9y agono they aren't limited anyhow, and if I would be selling my flat there this is definitely a tactic to do
- planteen 9y agoAre houses ever sold in auctions in France? How long are typical houses on the market? It seems in this situation that you would start the house price high and then lower it over weeks/months until you get an offer. In the US, sometimes houses are priced "low" intentionally and the listing agent says something like "offers will be accepted until noon Monday" to encourage over asking, all cash offers, and waiving inspections. Sometimes, houses are also sold at auctions in the US. This is common for foreclosures and seizures, for example.
- wtvanhest 9y agoIMO, over the long-run, the market always wins. You cannot randomly change an unimportant technical detail and actually impact the long-run pricing. The type of mechanism that is described where you must take the price offered has so many drawbacks, like... how do you handle contingencies, etc.
- foota 9y agoAre you familiar with auction theory? The conditions for the auction can significantly change the optimal bid.
- victorNicollet 9y agoThere are auctions, but those follow an entirely different set of rules. You have a few weeks to visit the property, then you either mail in your bid or come to the auction house on the final day. Most of what you'll see in those auctions is being sold for legal reasons (such as bankruptcy). http://www.notaires.paris-idf.fr/immobilier/ventes-aux-encheres/les-annonces http://www.notaires.paris-idf.fr/immobilier/ventes-aux-enche...
- JustAnotherPat 9y agoCan you just overprice it and let bidders fight on lower than asking? Essentially the same thing, but with different psychology. I wonder how it would play out differently.
- Svip 9y agoIf France is anything like Denmark, the price is usually based on a combination of a public and a private valuation of the house (both of which are available to buyers upon request). You can give it any price you want, but since buyers can get an insight to its valuation, the asking price is usually around its valuation. So as I understand it, the strategy is usually to sell the house for a much higher price than its valuation, hoping someone is really interested in the house. And as time passes, you keep lowering the price until you get a buyer.
- victorNicollet 9y agoIf you're selling through an agency, they usually recommend a price range (that you are free to decline, in which case the agency might refuse to do business with you). If you're selling on your own, there's really no guidelines.
- pkulak 9y agoIf buyers and sellers never set a price, how is a valuation ever accurate?
- victorNicollet 9y agoUsually, you try to base it on the recent sales of similar properties nearby. Sale data is more-or-less public information, and there are good aggregators: https://www.meilleursagents.com/prix-immobilier/paris-75000/ https://www.meilleursagents.com/prix-immobilier/paris-75000/
- _dps 9y agoI'm curious if the population generally thinks this is a reasonable situation. I can easily imagine a 25% difference in valuation of two properties in the same area with the same number of bedrooms, the same age, same space, and nominally the same amenities. I can also imagine a 25% difference based on some newly opened restaurants, new bus routes, etc., that will not be reflected in historical data. There is also an enormous subjective-experience component in how people value residential real estate, and enormous variation in details that really do matter and aren't available in real estate data aggregates (like lighting profile, and how intelligently the interior design exploits that lighting profile). It's so far from what I'd consider reasonable based on my (obviously limited) experience, and I'm genuinely curious how the locals feel about it.
- isolli 9y agoI've never heard that before. Do you have a reference? Edit: It seems you're right! http://www.pap.fr/conseils/achat-vente/votre-annonce-a-quoi-vous-engage-t-elle/a6870 http://www.pap.fr/conseils/achat-vente/votre-annonce-a-quoi-...
- koolba 9y agoThe USA is like that as well. If you receive a cash offer with no contingencies for your asking price then you can't refuse. This is specifically to prevent discrimination against minorities. In most real world transactions there's some back / forth with the lawyers about details (ex: "We want your ugly drapes!") as well as non-cash considerations. A seller may accept a lower cash offer over a higher mortgage based offer due to fear that the latter may fall through.
- isolli 9y agoWhat if you receive another cash offer above ask? This seems to happen every day in hot markets (e.g. New York City).
- bagels 9y agoDo you have a citation for "seller must accept cash offer"?
- EvanAnderson 9y agoAgreed-- sounds fishy to me, too. I'm not a lawyer. I'm not a licensed real estate sales agent in my locality either, but I did complete a course of training to that end. I never heard such a thing. If a seller were discriminating against a protected class in refusing such an offer that would be illegal. Holding-out for a better offer (whatever that memans) however, AFAIK, the seller's prerogative so long as they're not discriminating against a protected class.
- koolba 9y agoI can't find a citation so maybe I am mixing things up. If I do I'll post it.
- Joeri 9y agoIn belgium a written counter-offer is binding. So, say a buyer makes an offer via email, the seller makes a counter-offer via email, the buyer accepts, then the seller is obligated to sell at that price to that buyer, even if a higher offer comes in from someone else. If they refuse to sell they can theoretically be forced to pay a fine, though in practice things usually don't escalate that far.
- dbcurtis 9y agoOK, but you have to understand the dynamic in this neighborhood. I also live about 1 mile from the new Apple campus, in a slightly different, though very similar, Sunnyvale neighborhood. You prep your house to sell by getting all inspections done ahead of time and staging it reasonably for showing. Agent-only open house tours are on Tuesday in my neighborhood. Buyers' agents make a short list of properties worth visiting with their clients. Open house on Saturday or Sunday, take offers the following Wednesday or Thursday. Expect 10+ offers from pre-qualified buyers. High bidder takes it, assuming they have a clean offer and financing. If any house in this neighborhood sits on the market for more than two weeks, everyone wonders what is wrong with it. As a seller, though, it is a one-way trap door. If I sold today, I'd never be moving back into the same neighborhood. Someone below said to the effect that is is a push-in bought for the land. That happens, but not so much in this neighborhood. The houses were built in the 1960's and are well constructed. There are older homes in some areas that are smaller that are the push-in candidates. BTW -- I chatted with a neighbor that was one of the original buyers on my street in 1961. The four bedroom floor plans sold for $21,000. $22,000 if you wanted insulation in the walls. Oooof
- cletus 9y agoIf experience has taught us nothing (and it hasn't [1]), it's that price controls simply don't work in the long term. That being said, capital controls are an entirely different beast. I've seen a variety of property systems in different parts of the world. In Sydney and Melbourne for example, it's hard to work out what anything will cost because the majority of properties are sold at auction. If there's a listed price at all, it doesn't tend to tell you a lot. I haven't seen the state of Switzerland in more than a decade but from my time there, they seemed to have a pretty reasonable system. It's one that basically discouraged property speculation in that short term sales of property attracted high, even punitive, rates of taxation. This could be close to 100% of the gain if held for under two years. There's two basic problems with global real estate as I see it right now: 1. Real estate is not a reportable asset under FBAR (the US foreign asset reporting framework to ostensibly clamp down on money laundering). As such, it's becoming pretty clear that real estate in the world's great cities are being used for money laundering; and 2. Real estate is being used to park vast amounts of foreign wealth. This is the case in Vancouver, London, NYC and a host of other places. Now if a bank takes money there is a lot of requirements placed on the bank, so called KYC (Know Your Customer) frameworks. In most cases this simply isn't the case with real estate. Why not? The true owner is hidden behind an LLC in any high end property sale in NYC. But (2) is the big one. I'm a firm believer that New York, for example, should be for New Yorkers. Not Russian and Chinese billionaires. Australia has a regime where property purchases by foreigners need to be passed by the FIRB (Foreign Investment Review Board). This typically means new developments. This is a somewhat flawed system as it means apartment buildings are built for and sold to foreign investors. This is killing inner city living. In NYC ultra-luxury condos are taxed really low, probably the lowest (as a percent of market value) of any property kind in NYC. The reasons for this are complex and NYC can only do so much to fix it because it's up to New York state to fix it and New York state has a whole bunch of SFH owners who will fight property tax reform tooth and nail. Property investors in general perform a useful service. Those houses and apartments you rent have to be owned by somebody. Kill that regime and where are people going to live? As an example, before about the 1970s, the UK had a virtually nonexistent private rental market. So I'm all for: 1. High valued properties taking a bigger share of the tax burden (as a function of property value); 2. Restricting to some degree who can buy property in a city; and 3. Taxing non-working property punitively. By this I mean a property that isn't either occupied (by the owner or a tenant) the majority of the year. This French system however of forcing someone to take the first offer is ludicrous. [1]: Reference to https://www.reddit.com/r/TheSimpsons/comments/2w2hjs/lisa_if_the_bible_has_taught_us_nothing_else_and/ https://www.reddit.com/r/TheSimpsons/comments/2w2hjs/lisa_if...
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- isolli 9y agoIn the UK it's quite the opposite: https://en.wikipedia.org/wiki/Gazumping https://en.wikipedia.org/wiki/Gazumping