Hi, I have found a nice and quite cheap apartment I would like to buy.
I am not used to the Swiss system and was surprised when the agency told me that the owner will sell it at the best price.
The price is in my view surprisingly low (370k when the price suggested by comparis is 400k and the postfinance app suggests a range of 400 and up to 500k) even after mentioning the apt has not been renovated since its construction in 1970.
(If you mention renovated in 2020 the postfinance app suggest 460-560k).
The apartment is in not too bad conditions but I expect an investment of approx. 60-70k for renovation works.
I know it is a very open question but any idea of how to proceed and what could be normal to offer in such a bidding process? I am thinking on a first offer of 380k and a Max of 400k in a second round... but not sure what to expect...
Sorry if it is a weird question but if you have any idea or tip it would be much appreciated. Thanks!
Very likely it was advertised cheap to get a lot of interest - then you have a bidding war... and you end up with a higher sale price... higher price equals better commission for the agent...
Impossible to know what the owner is prepared to 'settle' for - I had a friend who found out later because their seller actually lived next door, that the agent did not even pass on the lower price - and the neighbour would have accepted a lower price if they had known - 50K less! - as they were happy to sell fast to a 'nice family'...
I would be very cautious about any unknowns...but it's really impossible to know...
And beware of agents, they are lower than a snakes belly!
Anyone experienced with bidding on eBay would understand this system really..
It's not just Swiss. One of the big house builder in the UK has a lot of rent controlled stock. When owner dies and they put it on the market they engage all the agencies in the neighborhood and put a price 20% below market.
This garners unbelievable amount of interest.
They select the best and more solid bids and run them for round two and potentially three.
Having worked also in commercial real estate that's how the process work. It involves a lot more work on behalf of the broker which is why you don't see it often. Broker essentially has to "run a process" which is more complex than sitting on your ass and waiting for bids to fall in and passing them to the seller until they are happy.
In this case - fix yourself a max price at which you would be willing to buy it, and stick to this price under all circumstances. Open the bidding maybe 5-10% below your max price and depending on what type of feedback you get from broker for round two - readjust never moving over your max bid.
Thank you, yes, a weird system I dont know and probably they could also opt for a Swiss rather than a C permit foreigner... well, let’s see. I will make an offer but I am not very optimistic. Thank you!!
A general interview on home buying from WRS that might be of interest.
https://worldradio.ch/article/swiss-riviera-homes/