Perhaps the most important issue in the whole process of selling a property is determining the price at which it is to be placed on the market. Whilst a vendor will expect to get the highest possible price for their property, a buyer will always try to buy that same property for the lowest possible price. It is therefore somewhere in the middle of these two extremes that these antagonistic positions will be reconciled and a sale will effectively take place.
Independently of the type, state of conservation or location, each property has a value, a value that can be expressed in Euros or any other currency. It is about this task of finding a value and a price for a property that we would like to write a few lines in this article.
First of all, a property does not exist in a vacuum. A house, a land or a flat will always be compared with other similar objects, both by the vendor and by the buyer(!). For objects with very similar characteristics, the comparison process may be easier than for very different objects. Two apartments with the same layout, on the same floor, with the same number of bedrooms and identical areas, in the same building and with the same solar exposition, will certainly have to be considered as having an almost identical value. Knowing the price of one, it will be a relatively simple task to find the price for the other.
On the other hand, two rural properties in Portugal will almost never have similar characteristics; one may have a larger area of land, the other has a house in better condition, the locations and views will certainly not be identical and then there are also issues related to the existence of water, the quality of the soil, the number, distance and type of neighbours, etc.
Be that as it may, one must always determine a price to put a property on the market, no matter how incomparable the property may be. And this is what happens, every day and in every region of Portugal.
One of the first steps for a potential vendor, is often to do an online search for similar properties in their region or locality. However, in addition to the above-mentioned obstacles of comparison there is another difficulty with this method: the prices at which the properties are presented, are always the prices that have been determined by the owners of the property. An estate agency can – and should – give an indication of the market price for marketing a property, but the owner will always have the last word on this.
Therefore, these sets of prices, which are accessible both online and in real estate windows, can represent very different things. If we look for example at property prices on idealista, imovirtual or any other website, there is no possibility to determine whether the prices we see result purely from the owner’s expectations or whether in determining the price attention was paid to a more neutral and objective analysis.
This neutral and objective analysis can be provided by real estate agents. One of the reasons for this is, that unlike most owners, estate agents do not usually have an affective relationship with the property for which they will have to determine a value and price. The real estate agent’s outlook is also more objective because the agent’s perspective has only one purpose: to sell the property at the best possible price given the current market situation.
To a certain extent, the estate agent shares with the owner the expectation of selling the property at the highest possible price, because the estate commission – as a rule – is a percentage. The higher the sales price of the property, the higher the commission to be received. However, the agent knows that he is only entitled to the commission if the property is actually sold. And in this aspect, the agent’s rationale will dictate that the closer to its real value a property is placed on the market, the greater the possibility of finding a buyer willing to pay that price.
The determination of a market price for a given property is not an exact science and different agents may arrive at different price indications. Whilst we do not wish to go into further detail on the issue of some agents inflating their price indication in order to secure a listing, the simple truth is that estate agents are also fallible. However, estate agents have one big advantage: apart from working with a considerable number of properties in their area on a daily basis, they follow the sales process from start to finish and are present at all the deeds. Real estate agents therefore have access to real and current information about the final price at which a property was sold and are ideal partners in determining what the most appropriate price for a property is.
If you would like to obtain – without obligation – a professional and objective price indication for your property, please do not hesitate to contact us.