How is the asking price decided?

Shelga

Hey all, am putting an offer in on an apartment in Dublin and was just wondering how are the asking prices, as advertised on daft.ie, etc decided?

There are very similar looking properties going for €30k more. Does the estate agent guide the seller as to what price band will attract the most people? Or is it based off the surveyor's appraisal? Seeing as everywhere seems to go for €20-30k over asking these days, I was just wondering.

Also, is there any law to stop estate agents pretending there is a rival bidder, to push prices up? This happened to my friend and seems appalling and totally unethical, so was wondering if it's even legal. Thanks

davo10

Asking usually is a reflection of what similar properties have recently sold for in the area, and/or the demand for the property.

I bet your friend has no proof whatsoever that the EA made up a rival bid.

stimpson

We sold recently and we set the price with the EAs input. We had 3 agents in to look at selling the house and they all came in within 10k of each other. The house sold at 20k above asking in the end.

The prices are set to get people in to look at the house. If there are multiple bidders, the price will normally go over asking. At the end of the day, the agent is working for the seller and will do what’s best for them. Having said that, there is little incentive to come up with ghost bidders. At 1% commission a 10 grand increase is only worth €100 to the agent in commission.

4ensic15

stimpson wrote: »

We sold recently and we set the price with the EAs input. We had 3 agents in to look at selling the house and they all came in within 10k of each other. The house sold at 20k above asking in the end.

The prices are set to get people in to look at the house. If there are multiple bidders, the price will normally go over asking. At the end of the day, the agent is working for the seller and will do what’s best for them. Having said that, there is little incentive to come up with ghost bidders. At 1% commission a 10 grand increase is only worth €100 to the agent in commission.

The commission is not the issue for the agent. It is getting the next property in the area to sell. The neighbours who are thinking of selling will watch what happens with an eagle eye. If people think the agent didn't get a good price, that agent may lose 3 or 4 potential sales. far more than €100 lost!

stimpson

4ensic15 wrote: »

The commission is not the issue for the agent. It is getting the next property in the area to sell. The neighbours who are thinking of selling will watch what happens with an eagle eye. If people think the agent didn't get a good price, that agent may lose 3 or 4 potential sales. far more than €100 lost!

And what will it do to his reputation if a real bidder walks away due to his ghost bidder? No reputable agent would play games like that.

4ensic15

stimpson wrote: »

And what will it do to his reputation if a real bidder walks away due to his ghost bidder? No reputable agent would play games like that.

He won't get the price. Neighbours will not be impressed.

Shelga

Shelga wrote: »

Also, is there any law to stop estate agents pretending there is a rival bidder, to push prices up? This happened to my friend and seems appalling and totally unethical, so was wondering if it's even legal. Thanks

I bet you it didn't.

But no there's no law against it as far as I know.

mloc123

Collins Tinkling Steak wrote: »

I bet you it didn't.

But no there's no law against it as far as I know.

There is. All bids must be recorded now in writing with names associated with each, agents can be audited and must keep a record of all.

In our recent experience of selling and buying, things were pretty transparent. People get annoyed when outbid but anything we were outbid on went up on PPR for the higher price. Set a limit, bid to that limit... don't get annoyed if somebody values the house more or has more funds.

riemann

stimpson wrote: »

No reputable agent would play games like that.

Agree wholeheartedly. Of all the different professions, Estate Agents are of the highest calibre with a strong moral code, second only to Solicitors.

fret_wimp2

Shelga wrote: »

Seeing as everywhere seems to go for €20-30k over asking these days

I'm seeing the opposite actually. Taking the average asking price dublin from one of the property websites, and comparing it with the average selling price in dublin from the property price register (ensuring to add on vat of 13.5% course) selling price is roughly 6.5% lower than asking.

For the country not including dublin asking is on average 7.5% lower.

This surprised me so either I'm missing something huge from my calculations, or the answer is simply that the majority of property goes for less than asking and we really just concentrate on property in very highly saught after areas that will always be under bidding wars.

mcbert

fret_wimp2 wrote: »

I'm seeing the opposite actually. Taking the average asking price dublin from one of the property websites, and comparing it with the average selling price in dublin from the property price register (ensuring to add on vat of 13.5% course) selling price is roughly 6.5% lower than asking.

For the country not including dublin asking is on average 7.5% lower.

This surprised me so either I'm missing something huge from my calculations, or the answer is simply that the majority of property goes for less than asking and we really just concentrate on property in very highly saught after areas that will always be under bidding wars.

Hi, sorry not doubting your numbers, but I am a little surprised by this trend in Dublin. Can anyone else confirm? It is not what I've seen in the limited area I've been looking, although I could take a closer look.

I thought a common EA tactic was to set a slightly lower asking price to get interest going, with the expectation of it closing higher...

stimpson

fret_wimp2 wrote: »

I'm seeing the opposite actually. Taking the average asking price dublin from one of the property websites, and comparing it with the average selling price in dublin from the property price register (ensuring to add on vat of 13.5% course) selling price is roughly 6.5% lower than asking.

For the country not including dublin asking is on average 7.5% lower.

This surprised me so either I'm missing something huge from my calculations, or the answer is simply that the majority of property goes for less than asking and we really just concentrate on property in very highly saught after areas that will always be under bidding wars.

There is a time delay between an asking price being set and the house selling and the price being put on the register. The houses showing up on the register now were houses that had asking prices set 3 to 6 months ago. Considering prices are meant to be rising at 13.5% p.a, that would seem to be correct.

Captain Flaps

mcbert wrote: »

Hi, sorry not doubting your numbers, but I am a little surprised by this trend in Dublin. Can anyone else confirm? It is not what I've seen in the limited area I've been looking, although I could take a closer look.

I thought a common EA tactic was to set a slightly lower asking price to get interest going, with the expectation of it closing higher...

I've been viewing round south Dublin in what would be considered 'sought after' areas, I've seen an increase of 100k on a house that was listed at 420k. It's lunacy.

Kyta

Lately it seems (in Dublin anyway), the estate agents formula for calculating asking price:

1. Look at what closest house nearby sold for recently.
2. Add 5-10%.
3. Rinse and repeat.

astrofool

fret_wimp2 wrote: »

I'm seeing the opposite actually. Taking the average asking price dublin from one of the property websites, and comparing it with the average selling price in dublin from the property price register (ensuring to add on vat of 13.5% course) selling price is roughly 6.5% lower than asking.

For the country not including dublin asking is on average 7.5% lower.

This surprised me so either I'm missing something huge from my calculations, or the answer is simply that the majority of property goes for less than asking and we really just concentrate on property in very highly saught after areas that will always be under bidding wars.

VAT is only charged on new properties, daftdrop used to be pretty good at tracking asking price, to changes and then sold.

mrknock

Dear all,

the agents calculate the cost per square metric. It is perfectly quantifiable and a proper business metric.

The difference is that you, the Irish consumer are -once again- going to be ripped off -for life-.

Have you ever calculated it when buying/renting a property?
Have you seen it advertised somewhere ?

THAT is the difference with other places in civilised Europe. People are buying houses with their hearts rather than their brains.

But here everything is a proper MESS ... the property price register is not geocoded, let alone includes area or house features. Estate agents and property renovation shows dominate TV .... banks scaring people off .. NAMA and investment banks throttling the country's rental price ... and hipsters working for the government creating idiotic subsidies. Meanwhile half of the built properties are empty outside Dublin ....

GUYS THERE IS GOING TO BE A TECH BUBBLE TO BURST SOON. WE ARE NOT LIVING OFF SPUDS SUBSIDY ANYMORE. BEWARE.

Here in property coo-coo land, nobody wants to talk about it.

Goose Reckoning

mrknock wrote: »

Here in property coo-coo land, nobody wants to talk about it.

Talk about what? There is no 'tech bubble'.

Bob24

mrknock wrote: »

Dear all,

the agents calculate the cost per square metric. It is perfectly quantifiable and a proper business metric.

The difference is that you, the Irish consumer are -once again- going to be ripped off -for life-.

Have you ever calculated it when buying/renting a property?
Have you seen it advertised somewhere ?

THAT is the difference with other places in civilised Europe. People are buying houses with their hearts rather than their brains.

Problem is in Ireland there is now standard/regulation to calculate the size of a property. So what estate agents advertise is usually complete BS with no consequences fro them, hence there is no way to compute aggregate price per squared meter. What I have seen is that on average what EAs claim is around 20% more than the real surface, but sometimes the difference is higher and other times it is quite accurate.