How would you see this?
A property (standard house) was sold by the developer to an investor 10 years ago. The house had various tenants over time. No investments were made, so significant wear and tear is visible, and investments are currently needed and foreseeable. The garden is also not landscaped. Prices for comparable new-build properties appear to have increased by about 30% (not in a major city, but in a sought-after area with limited supply). For a comparable new build (compared to the property’s original condition), the price today is around 400,000. What would be your benchmark for the existing property?
A property (standard house) was sold by the developer to an investor 10 years ago. The house had various tenants over time. No investments were made, so significant wear and tear is visible, and investments are currently needed and foreseeable. The garden is also not landscaped. Prices for comparable new-build properties appear to have increased by about 30% (not in a major city, but in a sought-after area with limited supply). For a comparable new build (compared to the property’s original condition), the price today is around 400,000. What would be your benchmark for the existing property?
So far, there has been no call for action, as the ten-year period has not yet expired (and is to be waited out). The last tenants have moved out and apparently received an offer roughly matching nordanneys’ estimate as a ballpark figure (which they rejected as unreasonable). I know the price from back then and had assumed that the rental income would generate the profit. If it really works out that way, he would have made 100,000 over the house and about the same amount again from the rent. We would live in the property ourselves, but we are concerned that we might be significantly overpaying (especially since we wouldn’t have the guarantee of a developer project).
Why shouldn’t the seller make a profit? Anyone who has built or bought a house in the last 10 years can sell it now at a profit.
Someone who invested in the DAX 10 years ago has doubled their money by now. Compared to that, a house has even been a poor investment.
But none of this helps you. Look at the comparable prices in the region. You yourself said:
If it were my house, I would start with a sales price of €400,000 (about $430,000). A higher price could also be justified due to a difficult market. You have to decide individually what the house is worth to you, but there isn’t much room to negotiate. Be glad it’s not a bidding process.
Someone who invested in the DAX 10 years ago has doubled their money by now. Compared to that, a house has even been a poor investment.
But none of this helps you. Look at the comparable prices in the region. You yourself said:
Greenie schrieb:
For a comparable new build (compared to the current condition of the property) you pay around €400,000 (about $430,000). What would be a guideline price for the existing property for you?
If it were my house, I would start with a sales price of €400,000 (about $430,000). A higher price could also be justified due to a difficult market. You have to decide individually what the house is worth to you, but there isn’t much room to negotiate. Be glad it’s not a bidding process.
Of course, he’s allowed to make a profit, that’s fine, I was just shocked by the scale of it. But I wouldn’t mind so much if I didn’t worry about losing too much myself (because it just seems so inflated right now). We’re talking about a standard little house that would suit us now but might be sold again in ten years. The location of the town is very good, but within the town itself, it’s rather average—nothing special.
Greenie schrieb:
I’m familiar with the old price and assumed the rental income would generate the profit. That no longer matters. Only the market value counts.
Greenie schrieb:
We’re talking about a standard house that would suit us now but might be sold again in ten years. That would be your personal issue, not the seller’s.
Besides, other houses also require renovations after 10 years.
ypg schrieb:
That no longer matters. Only the market value counts.
That would be your personal problem, not the seller’s.
By the way, other houses also need renovation after 10 years.I understand, I’m not addressing the seller with this problem, but rather this forum with its knowledgeable and helpful contributors.
Of course, I have to renovate after 10 years, but in this case I need to do it now and then again later.
Greenie schrieb:
Of course I need to renovate after 10 years, but in this case, I have to do it now and then again later. What do you mean by that?
Either you want this house because of its advantages and renovate only what is necessary, or you buy a prefabricated house and also have to take care of the kitchen and flooring yourself. It’s your decision which property appeals to you more. You can’t judge everything by monetary value or criticize something just because of a renovation. The structure has to be sound.