Is it only the sales price that constitutes a good property deal?
A great question one should really think long and hard about before answering. Of course for most buyers the simple response will be “yes, I want a big discount on the (asking)price”. Are they wrong to think like this?
In some cases, yes, yes they are. If the sales price is lower than average, lower than comparable properties in the same area then the price is good already, and that could be interpreted as a good deal based on the price. The amount of negotiation on the advertised sales price is NOT a good indicator of how good a deal a buyer may be getting, let’s face it many properties are way, way over priced to offer discounts, that’s not a good deal (even though some buyers may believe it is).
Let’s look at an example ;
- Property 1 : Sales Price €150,000 no negotiation is possible as the sellers must sell for this price.
- Property 2 : Sales price €200,000 negotiable to €160,000, 20% “discount”
Assuming both properties are equal in every possible way, which one is the better deal? Undoubtedly property 1 is the better deal, if there was even any hesitation in your thought process here please slap yourself.
Although a potential buyer may feel like property 2 is better value for money, due to the great discount they managed to negotiate this is a fake discount and they are in fact paying over the odds even with a 20% discount.
What’s clear with these situations is you need to trust your estate agent otherwise you’re likely to lose opportunities due to being unaware of all the facts in a transaction, like the example above. Some agencies price the properties higher deliberately to allow for negotiation, and frankly this is sensible based on our hypothetical buyer’s mindset, but in those instances when the price is the price you must heed your agents advise and go along with what they say, if you don’t trust that advise find another agent simple.
Bottom line, yes the price is what constitutes a good property deal NOT the discount off the asking price don’t be confused.