In Luxembourg, negotiating the buying price can seem difficult if not impossible.
With demand largely exceeding supply, sellers often have the upper-hand and are unwilling to accept a lower purchase offer. The following advice should help you to be more informed when you tackle negotiations.
Analysing the property and its environment
Depending on the housing type and the area in which it is located, a property may be more or less easy to negotiate. In order to know the margin of negotiation, three points should be analysed:
- Location, location, location. The geographical location and the attractiveness of the surroundings are the main factors that impact the liquidity of a property. Luxembourg city and neighbouring municipalities will have a weaker negotiation margins compared to the north of the country. If the average gap between the listing price and the buying price on the national level is 15%, it will be very difficult to engage in negotiations in Luxembourg city with an offer below 5% of the listing price.
- Property type. The higher the property demand, the lower the negotiation margin. For example, newer 1 or 2 bedrooms apartments or houses priced below the million euros barrier boast a much stronger demand.
- Property specifics. Houses without parking spaces or a basement, or older property are often more difficult to sell. You should put these elements forward when negotiating.
Before starting negotiations, knowing your financial capacity is essential. To do so, simulate your loan on Nexvia’s affordability tool, as it will allow you to know where you should set your limit before entering negotiations.
Whatever the property and its localisation, keep in mind that the inherent negotiating power lies within the difference between the listing price and the reality of the market in which the property is located. A property listed too high will be off-market and have a much lower demand, forcing the seller to consent to a price drop. Find out if the listing has been online for a long time beforehand.
Understanding the neighbourhood or the municipality’s market dynamics, as well as actively monitoring listings are good practices to be more confident when making your offer. Nexvia’s online valuation tool helps you get an idea of the property’s indicative value before formulating an offer.
Beware of renovation costs!
Be cautious about property requiring renovation work. It is highly advised to schedule a second visit with a renovation professional before formulating a purchase offer. A professional will evaluate the renovation costs, which will allow you to project yourself financially. Having a price quotation for the estimated renovation work is also an additional objective argument when negotiating with the seller.
Bidding at the price should not be taboo!
If you consider that the price of the property is justified compared to the state of the market, discussions could prove counterproductive. It is sometimes wiser to make an offer at the listing price rather than to start long negotiations that may disqualify you in the eyes of the seller. Sometimes, it’s better to pay the asking price for your ideal home rather than to successfully negotiate a home that doesn’t fully appeal to you.