“Bargaining is possible” – such a phrase is sometimes found in ads for the sale of apartments and houses; And if there is no such reservation, does this mean that the price is already final? Or, conversely, is the negotiation of a concession a matter of course in real estate transactions? In which countries is it customary to bargain, and in which not? Is it possible to bring down the price from the developer, or is it really possible to negotiate only with the owner? We answer these questions in the material.
Ideally, the buyer and seller should shake hands and leave the imaginary marketplace with complete mutual satisfaction. How can this be achieved, given the obvious obvious difference of interests? Of course, through negotiations or bidding, it was this ritual that from time immemorial helped two Oriental people to agree on the exchange of goods for money, especially expensive goods with purely individual characteristics, whether it be a horse or a house.
Today, even such special products as living spaces are unified. Each apartment in a new building (already real or still virtual) has a price tag, and the figure on it is calculated using a formula that takes into account costs and the picture on the market. If the first is calculated accurately, then the second can “float” (this is where the window of opportunity opens!).
The practice of discussing terms between the parties is generally accepted, and during these discussions the price often moves, but, by the way, not always down.
What determines the activity and success of trading?
The buyer’s market or the seller’s market?
The most important thing that affects the propensity of the seller to make all sorts of concessions is the market situation, whether everything is easy to fly apart or hangs for weeks, encouraging only with rare sluggish displays.
For example, in Montenegro, demand is so brisk today that the developer does not need to additionally attract a buyer – many objects are sold either at the foundation stage or at the stage of building floors. “Even the owners are not too willing to give in, although in principle, depending on the situation, the discount can vary from 2 to 10%. If it is a large object, then it can reach up to 10%,” says Svetlana Barina, deputy head of the MONTBEL agency.
The Egyptian market is also active. “Homeowners can meet halfway when selling, but we must understand that we are talking about a small concession, in the region of 1000-2000 dollars,” says Zinaida Mazur, director of the SunResidence agency.
In Turkey, unlike Montenegro and Egypt, on the contrary, the boom is over, the buyer’s market has been established for the first time in two years, and discounts were not long in coming! If a year and a half ago, during the period of high demand for Turkish apartments, sellers said “take it, tomorrow it will be more expensive,” now they are making very significant progress. In the secondary market, those who urgently need to sell real estate are already making discounts of 10-15%. Some developers may “throw out” hot offers on the market with discounts of up to 30-40% to complete projects. Of course, we must understand that these are discounts from lost profits, the amount of which has been very large in recent years, that is, in principle, no one is in the pocket,” said Sergey Volchenkov, Director of Development at Tolerance-Homes.
Sometimes developers use the mechanism of discounts and bonuses to disguise the price reduction. For example, a Turkish developer sold apartments at a certain price, but now, in conditions of stagnation, he wants to make it more attractive, but cannot, so as not to harm his project. Then he announces promotions – offers furniture as a gift, extended installment periods, discounts on an individual basis.
“In the UAE, the market is on the rise, and behind the provision of discounts there is simply a desire to sell this “unit” faster. In principle, it will be sold without a discount for a certain time. The developer does not advertise discounts to the extent possible,” explains Elena Timchenko, managing partner of Royal Home Real Estate.
Primary or secondary market?
In most markets, the developer is much less flexible with regard to discounts (sometimes not at all flexible) than the owner of a ready-made home.
“In Spain, self-respecting developers, as a rule, do not bargain and do not provide discounts. But they may well offer good conditions for installments or make a gift to the buyer, for example, install something from household appliances,” Svetlana Nikonova, sales director of E-STYLE, is sure. The owners of an apartment or house, as a rule, make moderate concessions. Sometimes an agency “adds” pleasantries from its commission. “For example, a good client with serious intentions asks for a discount of 5,000 euros, and the owner agrees to only 3,000. Realtors can cover the difference by buying, for example, a TV or paying for the painting of premises by agreement with the buyer,” the expert continues. Thus, the deal took place, and everyone remained in the black.
In the UAE, the price of real estate in new buildings is fixed, but with some developers you can safely make attempts to bargain when buying several units, or, say, if it is possible to reduce the payment plan and pay the amount a little earlier. In the secondary market, bargaining is a normal phenomenon. Accordingly, discounts from the developer are usually within 5%, and from the owner everything is individual, from 5 to 20% in special cases.
In Egypt, developers also work according to a set price list, and there is a fixed price with 100% prepayment and installments. It happens that, as an exception, the company agrees to a small discount, for example, when a person buys more than one property. But most often, during negotiations, it is possible to bargain for a bonus, for example, the installation of an air conditioner in one or all rooms.
In Bulgaria, prices on the primary market are calculated by developers taking into account all costs. There is also not much room for haggling on the secondary market, on average the discount can be about 5-10%, depending on the region, type of real estate and circumstances of the transaction,” says Irina Mikhailova, customer relations manager at the agency Alternative Imoti Ltd.
Montenegrin agencies work according to a standard price list from the developer. It is rare for companies to give a discount today, given the activity of the market. Except with a one hundred percent prepayment.
Full payment or installments?
In general, when buying on the primary market, it matters whether the buyer has the entire or almost the entire amount or not. If the customer needs an installment plan, in this case the discount is either minimal or not provided at all. It also depends on the installment period – the shorter it is, the greater the discount may be.
Ideally, if a person immediately has a cache in their hands. For example, in Egypt today, no one will definitely talk about a discount if you need an installment plan, or you are still waiting for the sale of your apartment in another country. Let’s repeat, the cost of real estate with one hundred percent payment is already less according to the price list of the developer.
In Turkey, the usual discount on the active market with full payment was in the region of 2000-5000 dollars with an apartment cost of 70,000-100,000 dollars. Today, again, it is calm, and it is really possible to bargain more.
An exclusive property or an ordinary apartment?
The nature of real estate is certainly no less important than the market trend, and perhaps even more so. If there is a special object at stake, which many are hunting for, there is nothing to think about a discount. Auctions are not uncommon in such cases.
A realtor in Spain tells: “The owners will not give a discount on exclusive real estate. They are already sure that the object will leave. They may, conversely, raise the price, seeing great interest. If an apartment that is not unique on the market is exposed, bargaining is possible. For example, when buying a regular “two-piece” in Torrevieja worth 80,000-100,000 euros, the discount can be from 3,000 to 5,000 euros.”
Is it high or low season?
Seasonality is typical for many markets, especially resort towns. Accordingly, the demand for real estate is much more active during the influx of tourists and calmer when the beaches and cafes are empty. You can take advantage of this obvious point.
For example, realtors in Spain advise buying apartments from the end of November to the end of February. At this time, sellers are ready for more substantial discounts.
Is the bidding accepted in the country’s market?
It suggests that there is more trading in eastern countries than in Western ones. But there are reservations. Indeed, in Turkey and the UAE, the practice of negotiations and individual conditions is considered quite natural.
However, in Egypt, for example, trading in the real estate market is less common. Perhaps because the prices of comfort-class housing there are already nowhere lower. Realtor Zinaida Mazur notes that foreigners often think that Egyptians are ready to bargain like at a grocery bazaar, and expect to be dropped up to 50%, but it doesn’t work that way with real estate! The discount can be only 2-3%.
Bulgaria is not the most traded country. This practice is not as common here as in some other countries. It is important to show respect for local customs and be prepared for the fact that prices may be less volatile.
Personal characteristics and interest
Sometimes the results of the auction depend entirely on the assertiveness of the client. According to the agents, the propensity to negotiate a price depends on national traditions. According to their observations, residents of Asian countries are trading more briskly and persistently.
Finally, the key point is how much the seller or buyer is interested in the deal. The one who is more motivated is the one who concedes in negotiations. No one has repealed this law.
Svetlana Barina, a realtor in Montenegro, says: “Yesterday we looked at three objects with a client. None of the sellers gave a discount. Everyone is sure that they will sell. And the bidding is not going down, but up.”
How to trade in foreign markets?
We advise the buyer:
- Know the traditions of the market and the mentality of the local population. It is better if an experienced broker helps you.
- Have a sense of proportion and be extremely polite so as not to offend or anger your counterpart!
- Be flexible!
- Navigate the market, present prices for similar apartments.
Please note that in the UAE it is not customary to conduct unsupported negotiations – usually a check with a deposit is given in advance as confirmation of the seriousness of their intentions.
In Spain, an offer to the seller from the buyer is made in writing and in some cases may also be accompanied by a small refundable (in case of refusal) amount.
In many countries, sellers tend to “tweak” the price a little, make it a little higher in order to boldly concede during the bidding process. Realtors in Spain and Turkey recommend resorting to this technique, because many buyers fundamentally refuse to participate in the transaction if they do not concede anything at all, consider it disrespectful or something.
However, such manipulation should be treated carefully. If the price is noticeably higher than the market price, this will alienate the customer at the very first stage. For example, such games are not played in the UAE, since the market is transparent, and information, including data on real estate prices in a particular project, is publicly available on government portals, explains a real estate expert in Dubai Elena Timchenko. Here they indicate the market price and determine exactly for themselves what amount they will not go below in the auction.
It is not customary to set a price with a gap for bidding in Bulgaria either.
We advise the seller:
- Know the local market and traditions. Set the price taking into account these features and your situation.
- Navigate the market. Have an idea of the cost of a similar property.
- Negotiate as politely and respectfully as possible!
- Be flexible!
Photos used: Depositphotos.com
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