February 16, 2011 at 2:52 pm (Edit)
As a recent report in the Irish Times asked:
Why are some properties priced so much higher than similiar offerings in the same location? It may well be of course that some vendors have the financial capacity to place their property for sale at a price that seems reasonable to them and then wait it out until there is a recovery in the market for their particular sector.
At the other end of the financial spectrum, house owners in serious arrears with their mortgage companies may feel obliged to demonstrate that they are trying to sell, but deliberately pricing their house at an unrealistically high level to discourage bidders.
Good morning irishhouses,
Thank you for your comments, apologies for the delay responding.
The answer to your first question is relatively straightforward – price all too often comes down to the circumstances of the seller. It shouldn’t and in an ideal world it wouldn’t but in the absence of a national property price register, valuations in Ireland are more of an art than a science, unfortunately.
Motivated sellers may be motivated for many reasons, not just financial, and they will always reward early, ready buyer with greatly discounted prices. For that reason, we encourage buyers to shop around for the right seller as well as the right property! Just a word of caution, pricing can be strategic i.e. low to attract competition or high to discourage tyre-kickers. ‘Asking prices’ are just that, asking prices. They may be optimistic or strategic in nature but they rarely reflect so-called ‘market value’ so buyers are encouraged to employ a more reliable mix of DIY appraisal, for example, looking at local supply and demand ratios, the drop in value from peak prices, together with a workable yield calculation (no less than 4/5% in most cases, 8% for an investor) having regard to the local price per sqm.
We have a saying at Buyers Broker that sellers set the price but buyers determine the value, it is a buyers market (for what that’s worth!) and buyers need to take back responsibility for their purchase.
I hope that helps,