something fishy?

dannyd20

I've been looking around for property in Galway. Recently two houses have come up for sale in the same estate. They are in the same row of semi-detached houses, about 3 doors apart.

House A is owner occupied and is being advertised by a well known nationwide estate agent.

House B is let to tenants on a yearly basis and is being advertised by a smaller local estate agent.

Now get this! The asking price for House A is 325k and the estate agent told me they have a bid in of 330k. The asking price for House B is 280k and there are no bids!

To me, this seems highly improbable. I mean both houses are beside each other and have for sale signs outside. If you were interested in one surely you'd be interested in the other?

Granted, the owner-occupied one will probably have a nicer finish and be better maintained but 50k's worth? I guess I'll find out when I view both tomorrow.

Just wanted to get your thoughts - do estate agents pretend to have bids in to make you move a bit quicker? Or are there any other possibilities here?

Lex Luthor

I'd well believe it. Just view both of them and see if there is a 50k difference inside. You never know till you look. Highly improbable any amount of work in prop B will need 50k to it, but check it out.

Some people are not interested in doing all the improvement work so will pay the premium for the better house. Any idea what the ceiling price is for that type of property in that area?

dannyd20

don't know about a ceiling price for the area but the last similar property in the same estate sold for 320k about 2 months ago.

I just can't believe there could be that much of a difference! I mean who in their right minds would bid 330k on a property without bidding 280k on a similar one? You could get an awful lot of work done with 50k. It's a new enough estate - less than 3 years old.

FillSpectre

All the difference needs to be is perception. A run down house can put people off. When I was buying we looked at all maner of property and location and it took time. Once we decided what we wanted and could afford we narrowed our search. WHen I spoke to a guy in work about his searching he basically siad he wouldn't look at any property unless it was in ready to move in condition. As a result he struck off houses that need a new kitchen regardless of the price to replace a kitchen.

Tenants do damage properties and there is little chance of a 50k difference but a 50k lack of demand I could see. I really think the hard working hours now mean people aren't prepared to do work themselves as they think they are tired but there is a n element of people feeling better than that too.

Sponge Bob

SFK ....tis they you mean surely...... always charge ridiculous prices so the second house is probably priced correctly

Nor do I ever believe any estate agent so I would simply bid €305k in case their €330 bidder mysteriously disappears and they come back to you .

The_Conductor

Sponge Bob wrote:

SFK ....tis they you mean surely...... always charge ridiculous prices so the second house is probably priced correctly

Nor do I ever believe any estate agent so I would simply bid €305k in case their €330 bidder mysteriously disappears and they come back to you .

If one did in fact sell for 320k two or three months ago, it is highly improbable that you will get anywhere with that lower offer.

In practice in the area I live in, owner-occuppied houses do command a 10% premium over buy-to-let properties. While there may not be a massive amount of work involved in getting the property up to habitable standard, it can seem very daunting for a lot of people.

FillSpectre

smccarrick wrote:

it can seem very daunting for a lot of people.

I am more inclined to believe people are lazy and only prepared to buy the best and most expensive. The only reason I say that is all you have to do is look around and see what people are buying in everyday life. People don't buy the best product or something that suits the need but the label branded most expensive item.

r3nu4l

Well OP, according to your posts, you were looking at both houses yesterday. So did you see any major differences? Was there, in your opinion, a difference worth €50k?

I doubt it somehow. Sometimes however landlords can do silly things to a house just to squeeze in an extra bedroom such as dividing a main bedroom into two tiny cell-like rooms. Still won't justify the price difference but some people are too stupid/lazy to see how easily something like that can be remedied and are put off. €50k fro convenience? No way!

Mimikyu

This post has been deleted.

dannyd20

sorry for the delay in replying guys, didn't mean to keep you all in suspense!

well as I mentioned before, both houses are relatively new and neither looks in any way 'run down'

The only differences I can see are:

House A is being sold fully furnished (minus two beds), got nice tiles in the kitchen and bathrooms, nice thick carpets on the floors, fancy fireplace and is 'tastefully' decorated (not to my taste though!)

House B has cheap carpets, cheap appliances, basic tiling/fireplace, standard decor, no evident structural damage.

Neither property has had any structural modifications (extension/knocking walls in/dividing rooms etc) or any shed/patio/bbq area etc

I still find it astonishing that there is such a difference in price.

After speaking to the estate agents I am reasonably happy that the 330k bid is real. Seemingly the asking price (325) was met and they've since had 3 bids to take it to 330. I challenged the agents selling House A regarding the price difference and they claimed it is purely due to demand i.e. they will sell for whatever they can get (fair enough!). They also mentioned that the agents selling House B might keep the 'low asking price with no bids' story going for a week or two to drum up interest and then start a bidding war. This seems a fair comment as the agents for House B mentioned that there is 'substantial interest' but when I asked if I could bid (I have mortgage AIP) they made an excuse about one of the guys being on holiday and could I ring them next week!?!

Ah well, them's the joys of the irish property market. Confusing for a FTB!