Calling all experienced overseas investors...

[ringledman]

Can someone please tell me how common double pricing on overseas properties is?

I have seen it myself on off plan developments in Budapest, where the local Forint price advertised on the local website is some 30% less than the price advertised in euros to us Irish and Brits.

This came as a bit of a shock. I firmly believe in the saying that you make your money on property when you buy and not when you sell. Surely paying such an inflated price to start with is a serious mistake.

So do genuine agents merely take a finders fee (Say £3k) and sell the property to you from the developer at market price? Or do most agents gain a fee from the developer and are therefore incentived to sell at an inflated price that the local market would laugh at?

Can anyone share their experiences of where this double pricing occurs and how to check against it?

Cheers.

 

[JohnBoy]

if i were a seller i would get as high a price as possible for my property. since a disturbingly large number investors buying overseas only conduct a minimal amount of research (or in many cases none at all) then i suspect that what you call double pricing (otherwise known as Paddy pricing) is fairly widespread. in the case that you mentioned i imagine that currency fluctuations are playing a significant part in this pricing discrepancy. i have never heard of a developer cutting the euro prices of property simply because the local currency has declined (relative to the euro).

 

[ringledman]

This was back in March way before the Forint devaluation.

No way could you account for 30% difference due to currency fluctuations at the time.

I asked to pay the Forint price and was told 'we have a very good agent who deals with foreign investors'! Yeah ok.

 

[MugsGame]

Somebody has to pay for all those "free" inspection trips...

 

[extopia]

I presume you are aware that the Hungarian economy is a basket case and they will almost certainly have to devalue their currency significantly before joining the Euro? That might seriously affect your returns, especially in the near to medium term.

 

[ClubMan]

I firmly believe in the saying that you make your money on property when you buy and not when you sell.

What is that supposed to mean? It sounds pretty meaningless to me.

I asked to pay the Forint price and was told 'we have a very good agent who deals with foreign investors'! Yeah ok.

Asked who? If you are serious about investing in foreign property then perhaps you cast your net wider in relation to dealing with intermediaries. Or even do you own research directly. On the other hand perhaps the 30% premium is merited given that the intermediary is providing a useful service that satisfies the convenience requirements of foreign investors?