It means Wüest Partner’s evaluation is much higher than the buying price.
I was the first one to buy it when it became available to a closed circle and known customers, before it went to market.
The more apartments in a project, and the greater the differences between the apartments, the harder it will be to price each apartment correctly. Add to that the pre-sale stage and some other variables/restrictions/events and that’s become an opportunity. It’s rare, but it does exist.
This is only possible if the seller allows it, e.g., through your contacts. Why wouldn’t they just hold a public auction to get the highest price possible, as is done in many high-demand areas?
Is auction typical for newly built apartments?
Every developer has his own reasons; that’s why I mentioned the variables/restrictions/events. I didn’t include the whole story or information here.
The key takeaway is simple (but hard to build) off-market opportunities + moving fast based on data. Anyone needs to implement that in their own way.
Off-topic: In the tax haven cantons, the price is often not publicly stated. Instead, one must submit a bid, and the highest bid wins the apartment. (Or you bribe the selling agent)
Sometimes developers need to sell a few apartments early to get money/credit to build. Sometimes contractors need to buy an apartment or the developers offer the first apartments a bit cheaper for a fast trade.
Thanks for sharing
And all the best
That’s an interesting point. I was also considering this. Like, is there a “playbook” of how to go about purchasing a property? In my mind, with such illiquid seller’s market, the first step would be to know how much money you can spend (how much money the bank will lend), even before you find a property. And when you find it, you might have to decide within hours (?).
But surely the bank will want to know what you’re buying, or, more precisely, using as collateral, right? They will run their valuation on it and tell you how much they value it at? Does this usually happen within hours of finding an offer? Idk, the whole ordeal seems super stressful, and I’m a guy who’s over-analytical and over-thinking every decision.
How do you plan to get an 80% mortgage on an investment property? Do you want to tell the bank that you will live there? Is it an investment property because it is in a location that doesn’t suit you or is too small or sth? Btw no judgement here, I am also considering to buy a flat that I would not necessarily live in 100% of time.
Edit: sorry, I read further down that the bank will allow 80% on an investment property. Interesting. I thought that a “Renditeobjekt” requires max 50% LTV?
That sounds a lot like my plan. I am just not wealthy enough to consider anything in the Horgen/Meilen region. But I was hoping to find a modern flat in a cool area in Zurich city, where I would live in, but potentially could also rent it out. But the idea being, if I ever leave Switzerland, I would have an easy way in, not having to go through the ordeal to rent something out. But the perspective of “talking to real estate agents and building a network” makes me nauseous. I’d rather focus on my own work and just pay a “market” price, if only that market was liquid enough…
How can there still be any real estate developments who do not use W&P or IAZI before they put a price online? That’s what the banks are using. Or was that not a new development, but someone privately selling?
These kind of backroom deals annoy me a lot. Whoever allows to first offer real estate to “family friends” is shooting themselves in the foot, as they will surely get a much lower offer than on the market. I don’t get why people do it. But ofc happy for you that you found this deal.
In my experience, some people who don’t really need the money (e.g., an old person without children to pass wealth to) are fine making a gain slightly lower than the astronomical one they are entitled to and help out someone they care about.
Yes, yes, always have an up to date paper from the bank (does not need to the “the bank”) that proves you can afford the place! Happened to me once to miss a great opportunity because in the 24h it took me to get that paper the house was assigned to someone else.
Time and liquidity are the key points. When I bought my holiday home in Spain it was a very bad year for vacation homes in Spain, 1992. Tons and tons of offers, very cheap. I did fill my pockets with 5’000 Pesetas banknotes when meeting the seller, cash was king then. I did three written offers (with “pending partner consent” on it what makes them basically useless for the seller), offering half the asking price, but limiting the offer to one week. Got my favorite for exactly half the asking price.
You won’t get that during a real estate bubble like we have in Switzerland at the moment. But time is still very important. Developers need credit and the bank will only give credit after a few apartments are sold. That is your key point when asking for a lower price.
We know this is not the case in this instance and that I am not talking about such situations. That’s why I put “family & friends” in quotation marks. What I mean is that you need to hunt for deals before they go public. I don’t mind someone de facto donating a portion of their wealth to their actual family or friends.
I think that no one sells for cheap. Every transaction is individual & is aimed to get best deal for seller in CH. But sometimes what looks great to seller might look cheap to buyer . That’s all. It would be rather naive for a seller to sell a property below market price intentionally. What’s the point of doing so?
In real estate , finding good deals is hard job and needs patience which most people don’t have. Same is true for selling side too.
Just for example -: I know a property listed for 5.4 million (220 SQM Zurichberg), sold for 4.5 million. Just because in beginning seller tried to test the market and then sold it for whatever made sense.
Is it below market price or above market price? No one knows because every property in Zurichberg is unique and often not coming to the market for sale anyways.
These kind of deals are quite common on new builds. The only trick is to be informed about them and be quick to talk to the promoter, if you are one of the first people to sign up, you will likely get a substantial rebate.
I got a 7% rebate on a new build some 10 years ago like this. Many (all?) projects will only break ground once they have sold enough flats upfront, this is the justification for the rebate.
And no, these are not backroom deals, the new builds are advertised by the promoter/builder on their sites and via their supporting bank, it is just not very easy to find them on time unless your banker/friendly real estate person makes you aware of the opportunity.
I understand what you mean by that. But: Why does this have to happen “hidden”? I would expect that a public tender on the market would bring in more and achieve the goal just as quickly (ok, maybe 1–2 weeks more). As a builder, giving up 7% sounds insane.
The 7% also includes all the risks and delays taken by signing up early.
The same flat ready in maybe 2 years is not worth the same as if ready in very likely 2 months. Also the risk of the developper going bankrupt, …
As to why it’s not more public, I don’t know.