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Pricing: Asking Prices vs Accepted Prices

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It's Different in France

Be aware that the system for valuing properties and establishing transaction prices here in France can be somewhat different to that which you are used to. For example, in the UK it is the norm to ask several agents to value a property and make a proposal for its marketing, then appoint one – with possibly a second appointed under a joint-marketing arrangement – with a realistic price aimed at striking a balance between generating the right interest and securing an attractive price. Having put it on the market at a certain price, it is then often the case that one reviews interest and offers a week or so later, and it is very possible that the transaction price exceeds the asking price – sometimes by a considerable margin. The agent very much works for the vendor.

 

Property Valuations 'French Style'
Regrettably, agents in France are much less scientific in their approach to valuations, and in many cases the asking price is set at what the vendor insists on, rather than what an agent feels is a realistic price given current market conditions. To be fair to agents, valuing property here is notoriously difficult – in our niche market, every property is unique with few close comparables, and the variables at play – size, condition, location, situation, facilities, features, age, architecture, style etc – are all very different from one to another. Moreover, there is a much lower rate of turnover of sales, making the comparables method of valuation that less accurate.


Moreover, vendors’ loyalty to one particular agent is very limited – instead they will often appoint six or more believing that wide coverage will increase their chances of a sale.

 

Our Approach to Property Valuations
At Classic French Homes, we approach the challenge as scientifically as we can, and have developed an approach to valuations that takes into account all of its variables, together with reference to realistic comparables,  in order to arrive that a valuation that is as sensible as can possibly be.

 

Being Realistic

Needless-to-say, this figure can often be significantly lower than the aspirations and expectations of vendors, and where we are not able to reach a compromise that we are comfortable with, we simply do not take the property on. Why? For the simple reasons that it does not warrant our significant time and financial investment in a marketing campaign where we are not confident of securing a buyer at an acceptable price, and because we not wish to risk our reputation with buyers by wasting their time on properties that are clearly not worth that which is being demanded for them.

 

Making an Offer

That said, there is never-the-less scope for making offers that are lower than asking prices – and having those offers accepted. This is because transaction prices never exceed a property’s asking price – legally, if an agent secures the asking price, the vendor is obliged to accept it. Because of this, more room for negotiation is introduced into an asking price here in France than you may be used to elsewhere.

 

Market Forces
Ultimately of course, the price is dictated by the market – ie what a buyer is prepared to offer and a vendor is prepared to accept. Factors specific to the two parties, and perhaps outside the norms, can result in transaction prices below or above what might be expected, and there are circumstances in which we would certainly recommend having a punt!


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