Algarve Properties save 3%.5% on the Price
Algarve property owners who are looking to sell their Algarve
property, more often than not engage the services of a Real
Estate Agent in the Algarve since this seems to be what everyone
else is doing and so they go to an Agent and place their
property on the market. In Portugal there is little done by
Agents in terms of valuation. a lot of Agents just ask the
vendors idea on price, and for fear of not getting the listing
they will blindly accept the asking price of the owner and offer
the property for sale at that price. I am confident that I will
not encounter one single agent who can disagree with me, that
this is a frequent occurrence in the Algarve. Do not compare the
business of Real Estate in the Algarve and the way it works in
Portugal with the way you are used to in your own country. At
the same time I like to state, that there are also many Algarve
Real Estate Agents around who really have the professional
expertise to value a home correctly.
The single biggest difference in purchasing Algarve property
direct from the owner as compared to buying through a Real
Estate Agent is that the buyer and the seller are not impeded in
their negotiations by the 3% or 5% commission of the Agent which
does weigh heavy on both the buyer and the seller.
A sale will become possible when buyer and seller both get what
they want. If not, no sale. The price a seller is asking is
determined at the end of the day by two thing only. What he
needs to achieve bottom line or what he wants. That's it. We can
talk all day about different scenarios and why the seller want
this or that and property prices and so on and so on. The price
in the sellers mind and what he is prepared to except as the
lowest bid, and what the buyer is prepared to pay are the only
important issues. If the vendor does not get his price after he
has paid the agent his 3% or 5% commission he will have two
choices only apart from withdrawing the property from the market.
Either he places a higher price on the property to account for
the agents commission, or he is starting thinking of selling his
property himself. There are many Algarve Properties around which
are not selling because the commission has placed them above the
market value.
Everybody needs to understand, that without an agent involved,
the property can be offered to buyers slightly below market
value and the seller will still end up with more cash in his
pocket since there is no commission payed to the bank account of
the Real Estate Agent. And the buyer gets a better deal anyway.
The only thing the buyer wants is to buy a property he likes in
the area he likes and all that for the best possible price. Can
you blame him for wanting to do that?
Considering the we as sellers always believe that our property
is worth more on the open market than a buyer does it stands to
reason that without the agents 3% or 5% commission taken out of
the deal it will be easier to reach a compromise which will
result in a sale. Many sales have been lost for both buyer and
seller because of the agents commission got in the way of a sale.
Every buyer needs to face up to the reality that it is he who
really pays the agents commission. Not the seller. Do not let
anyone tell you otherwise. There is no seller who would be so
charitable as to pay the agent 3% or 5% of the value of his
home. We are talking serious money here. So it is obvious that a
seller will have calculated the amount of commission and he will
have increased the price of the property by that amount. The end
result being that the property price may already be above real
market value and you are buying a property at the very top end
of the market price.
Let us look at a real life example. A villa is on the market for
450,000 Euros. This means that in the selling price is a
commission of 27,500 Euros or 18,753 GBP. This is based on 5%
commission plus 21% IVA (VAT) Most foreign owned Real Estate are
working on 5%.
Are the services of an agent worth that much? Only you can
decide that. It is your money. If you are buying through an
agent this is what you will be paying.
We are an advertising company and not a Real Estate Agent in the
Algarve and we do not sell Algarve properties. We do not earn
any commission on a sale when owners are selling their property
through our different networks of web sites.