Asking price V achieved price question.

[mowerman]

New here as of today and what we know about buying in France could be written on the back of a postage stamp.

Doubtless many of our queries are already covered on existing posts and we'll read these over time.

However our initial question relates to the correlation of asking/achieved prices.

Accepting that we may be generalising most UK property sales achieve about 5% less than the asking price and in the current market this percentage is increasing as sellers expectations lag behind the reality of the market. From all we read in the property section of the weekend broadsheets this differential is even greater in France where asking prices are historically way in excess of true values.Indeed most pundits suggest at least a 20% reduction as a starting point for negotiations.

Should we believe what we read in the press?

Does anyone have experience of negotiating with French sellers?

[woolybanana]

If you negotiate with desperate British sellers you can get even bigger reductions. eg Bungalow in the Deux Sevres (Largeasse) on at €135000, now dropped to €80000, might make €70000, British seller.

[Kitty]

I was only taking about this very thing to my OH this afternoon, when sitting outside in the sun at 5pm (one reason for living in France....).  We have been house hunting and have found that asking prices can be ridulously high. 

In our area, we have experience of a number of properties that have been on the market for nearly double at which they sold.  Only recently, we looked at a house that was on the market last year for 350,000 euros and the vendor is now desperate and has dropped the price to 180,000 euros.  In another example, a house on the market for 400,000 euros has sold for 220,000 euros.

We were trying to work out why this happens and didn't come to any definite conclusion.

 

[Anton Redman]

It depends where the house is. Nice hamlet in 87 , about 30 dwellings when we purchased,  three occupied full time by French . two French maison secondaire. When we sold, four occcupied full time by French, including a great barn conversion, two French maison secondaire. Two British owned houses occupied full time and twelve barn conversions / maison secondaire. The way the UK market has gone there are more people needing to sell that people wanting to buy.

In contrast where we now live the British have negligiable impact on prices. Not happy with thesituation but that is the way it is 

[AnOther]

Not always a mystery.

Many Brit sellers have grossly over inflated ideas of what their properties are worth. Here's the scenario.

Buy for say €200K (probably too much in the first place)

Spend another €100k renovating (sometimes less then expertly and to UK taste & style which no French buyer will touch)

Add a bit for inflation (plucked out of thin air) let's say 25%

Asking price price = €375 - €400k

Realistically achievable price €200 - €250k

Conveniently forget that the €300k spent 3, 4 or more years ago probably represents something like £220 so a selling price of £200-£250k is somewhere around break even which, and I don't know about you, I would call a result in the current climate [;-)]

 

[Dog]

Actual price achieved is and has been always a mystery for many reasons.

Do you really believe what footballers are said to be paid?

My Uncle dealt in expensive classic cars and he said there was a lot of hype - prices actually paid varied vastly from prices said to have been paid.

It's actually very good if you are a savvy buyer - the market is what you make it.

 

 

[P-D de Rouffignac]

First rule - Don't believe the stuff written in the Sunday papers, usually by journalists who do not live and work in France, and have based their "research" from interviews with a couple of estate agents.

The reality is that French property prices were unrealistically low, compared with Britain, up till about 2003, just after adoption of the euro. For example, a studio or small two romm apartment on a Mediterranean beach could be had for around 25,000 euros - today's price for the same property is now around 75,000 - 90,000 euros. This is basic price inflation.

An owner wishing to buy a second or replacement property hopes to achieve the, say, 75,000 price in order to buy something else, at the new inflated price. No-one is going to sell cheap and buy dear.

The margin for negotiation is therefore limited in some circumstances. Developers of new-build properties, for example, need to recover the (high) cost of labour and materials, which are fixed. An owner who has done his/her own renovation, as someone has pointed out, expects to get the cost back - not always achievable as someone's expensive marble jacuzzi can be another person's nightmare.....And so on.

Your best approach is to thoroughly research the area you are interested in, look in agents windows to get an idea of the average price for certain types of property, and then begin to view. Even in these hard times, many people are locked into a property and can't or won't sell at a huge discount. The only exception is perhaps a cash-strapped owner of a second home, bought over five years ago, and now wanting to raise some money quickly. But you need to the find them first.

Peter-Danton de ROUFFIGNAC MA LLM www.francemediterraneanproperty.com  

[cooperlola]

Peter - being in the business and a sensible chap to boot - has it about right I reckon.  However, a lot depends also on where you're looking.  Some friends of mine round here are going back to the UK.  All the people who have looked at the house so far have been French - and there have been a few of them.  They have already had an offer - first 10% under the asking price and then, once told to "go away" they have now been offered just a few thousand under what they wanted - less than 5% in fact.  I think a French seller would be more likely to sit on a property until they get what they want, for just the reason P de R cites in his final paragraph.  Brits desperate to go home in a part of the world saturated by UK-owned properties which are all on the market at the same time, might be different though and thus a better bet at the mo'.

[AnOther]

As a matter of interest I bumped into one of the girls who worked for the Immo we bought through and she said that for the first time they had recently refused to take instructions from a couple of sellers because the prices they were seeking were hopelessly unrealistic.

I use 'worked' in the past tense BTW as she was being laid off, another first for the particular agency.

 

[Will]

The simple fact is that most asking prices are far too high. Judie's valuations for her agency have always been based on realistic asking prices for the current market, however high or low that might be. Other local agencies - and even certain notaires - give much higher valuations. In many cases this is done solely to get the house on the agency books; many of those agencies will use commission-only salespeople who have to take on a certain number of houses in order to meet their targets (note to P-D and others: that doesn't mean all commission-only agents work that way, just that a lot do, at least in our area). Invariably when such an over-valued place is sold it achieves a price below, though often close to, the realistic valuation, and usually takes many months to sell, whereas at a closer valuation it should sell much sooner.

Valuation is a difficult process. Most owners have an over-inflated idea of their house's value. There are plenty of French sellers who are prepared to wait for a long time to sell; these are mostly inheritance-linked sales where there is no rush. Many British sellers want to return, and, frankly, need to achieve a certain figure in order to do so, so they cannot sell at true market value. Though lower house prices there at present might encourage them to be more realistic. Unlike in Britain, where land registry records of actual achieved prices for individual properties are freely available, in France the valuer has to actually be involved in the business to know what prices are achieved for similar properties to yours.

So you have to find agents you trust (a bit of an oxymoron for most forum users) who know the market in their areas. Look for those who are actually achieving sales, and none are achieving many sales at present, and don't just go with the highest valuation.

Similarly when buying. Get a feel from the various agencies and notaires for how realistic their asking prices are likely to be, and base any offers on that. Some might expect low offers, others might not take you seriously until your offer matches the asking price less 5%-10% or so (though some owners may have insisted on unrealistic asking prices, so bear that in mind, but a sensible agent will not be pushing these very hard as they know sales are less likely). Certainly don't be swayed by people saying on a forum like this that they bought for almost half of the asking price. All that proves is that the valuation was far too high to start with; it certainly is not the norm.

 

[mint]

[quote user="P-D de Rouffignac"]

Your best approach is to thoroughly research the area you are interested in, look in agents windows to get an idea of the average price for certain types of property, and then begin to view. Even in these hard times, many people are locked into a property and can't or won't sell at a huge discount. The only exception is perhaps a cash-strapped owner of a second home, bought over five years ago, and now wanting to raise some money quickly. But you need to the find them first.

Peter-Danton de ROUFFIGNAC MA LLM www.francemediterraneanproperty.com  

[/quote]

Never a truer word, P-D.  It's finding these elusive people wherein the art of bargain-hunting lies.

Come on, folks, if you're cash-strapped and needing to move, just let us potential buyers know, eh?  You'd be doing yourselves and us a favour?[:D]

[Patf]

From a seller's point of view, we are again trying to sell our house, this time a bit more definitely.  Last year we had it on the market for a short time for 235000€ and had little interest. Now we have reduced the asking price to 180000€ and have had 2 viewings. It seems that the secret is to pitch the asking price at a level to attract buyers, but where there is still room for negotiation, without making an actual loss. Taking into account the exchange rate too.  You don't know whether you have achieved this  until you try.

We aren't desperate to sell at the moment, still contented here, but it was always our longterm plan to return.  But if you fancy the Gers, S 17, perhaps we could do a deal?

[Renaud]

Article in this evening's Evening Standard (Pravda Lite) saying that the price that houses are selling at in London is 25% less than the peak price last summer.

However something I read elsewhere said that around West London property has risen 5% this year due to the fact that there is so little on the market that sellers are getting this premium.

Mind you prices rising 5% from what they might have been thought to be worth might not be much.

If you are in a position to buy I am sure it is worth waiting.

Friends of ours near Falmouth sold their lovely converted Victorian house (to a Londoner) and moved into rented accommodation waiting for house prices to drop or repossessions to start.

[Jo]

Bought our property in 2006, it was advertised at 216,000, after negotiations we bought for 160,000 the previous owner is still friendly, even offering to go halves on our fencing as it will suit him to have our land fenced, (keeps his sheep off!) so he obviously doesn't feel 'fleeced'[:D] gettit......fleeced[:D] Oh I crack myself up sometimes[;-)]

[phylisbide]

I assume it is much more difficult to determine an asking price for  a property when there isn't an identical property next door - in rural areas on both sides of the channel there are likely to be more individual properties - in towns and cities where there are roads or estates of similar homes it must be an easier process.pb

[mint]

[quote user="Patf"]

From a seller's point of view, we are again trying to sell our house, this time a bit more definitely.  Last year we had it on the market for a short time for 235000€ and had little interest. Now we have reduced the asking price to 180000€ and have had 2 viewings. It seems that the secret is to pitch the asking price at a level to attract buyers, but where there is still room for negotiation, without making an actual loss. Taking into account the exchange rate too.  You don't know whether you have achieved this  until you try.

We aren't desperate to sell at the moment, still contented here, but it was always our longterm plan to return.  But if you fancy the Gers, S 17, perhaps we could do a deal?

[/quote]

Hi, Pat, I'm afraid I know nothing about the Gers.

But, if you're "still contented", why bother selling now?  Hang on for a bit and, you never know, they keep promising an upturn.

I am in touch with one owner in France and one in the UK.  Can't make a decision at the mo because of OH being unable to travel, etc.

It's just such an unusual time that people are either hesitating or just too damned scared to act!

But Good Luck with whatever you decide![:D]

[dragonrouge]

We are moving back home after some years here in France initially in Normandie and now further south.  When we first purchased we paid about £67K and then at a rate of 1.675 euros to the pound.  Then we sold to a lovely couple from the Netherlands who absolutely fell in love with the house and paid the asking price.  The profit was moved to region 85 and now we wish to move home for reasons such as aged Mum brothers grandchildren and the like.  So normal reasons but still with some reluctance.  But one of the cogs in all of this is that I do not have children from my previous marriage and thus I if I hang around and my wife goes before me then my aged brothers take over and they would not appreciate paying 60% tax.  If you were to be blunt it would be better if I went first then my wife's children would benefit and which is what I would want to happen.  It is sometimes difficult to comprehend this situation but appreciate that France is based upon the codes of Napoleon  which in my opinion is out of kilter with modern day society.

The problem with France is that it does not have Wimpey estates or the like so no comparables come into play.

The market is the market and it will decide upon values.

I do not wish to become involved in discussions as to value in that we still have our original Georgian House in the UK so if I am resident and domiciled in the UK then at least perhaps 60% does not come into play. The house here is paid for as is the one in the UK so let us see what the years ahead bring.

It is a terrible thing each and every day to wake up to and because I do not have children I feel that I am being treated somewhat different to those who do.  Does anyone have a view on this last sentence!