In France, there's no such thing as paying over the ask price. You are forced to sell to the first buyer who offers to pay the ask price. I suspect that this is done to prevent prices from rising too quickly.
You prep your house to sell by getting all inspections done ahead of time and staging it reasonably for showing. Agent-only open house tours are on Tuesday in my neighborhood. Buyers' agents make a short list of properties worth visiting with their clients. Open house on Saturday or Sunday, take offers the following Wednesday or Thursday. Expect 10+ offers from pre-qualified buyers. High bidder takes it, assuming they have a clean offer and financing.
If any house in this neighborhood sits on the market for more than two weeks, everyone wonders what is wrong with it.
As a seller, though, it is a one-way trap door. If I sold today, I'd never be moving back into the same neighborhood.
Someone below said to the effect that is is a push-in bought for the land. That happens, but not so much in this neighborhood. The houses were built in the 1960's and are well constructed. There are older homes in some areas that are smaller that are the push-in candidates.
BTW -- I chatted with a neighbor that was one of the original buyers on my street in 1961. The four bedroom floor plans sold for $21,000. $22,000 if you wanted insulation in the walls. Oooof
In suburban long island NY, plenty of homes sit on the market for months, in good school districts, near halfway decent jobs.
I can't believe it, but I guess I should, that Sunnyvale has so many high paying jobs and so little land that buyers are swarming like bees to a hive.
This is a market that literally 99.3% of the world is priced out of.
In the US, sometimes houses are priced "low" intentionally and the listing agent says something like "offers will be accepted until noon Monday" to encourage over asking, all cash offers, and waiving inspections.
Sometimes, houses are also sold at auctions in the US. This is common for foreclosures and seizures, for example.
http://www.notaires.paris-idf.fr/immobilier/ventes-aux-enche...
So as I understand it, the strategy is usually to sell the house for a much higher price than its valuation, hoping someone is really interested in the house. And as time passes, you keep lowering the price until you get a buyer.
If you're selling on your own, there's really no guidelines.
https://www.meilleursagents.com/prix-immobilier/paris-75000/
There is also an enormous subjective-experience component in how people value residential real estate, and enormous variation in details that really do matter and aren't available in real estate data aggregates (like lighting profile, and how intelligently the interior design exploits that lighting profile).
It's so far from what I'd consider reasonable based on my (obviously limited) experience, and I'm genuinely curious how the locals feel about it.
It is a given that the price will be very different depending on the state of the property, the quality of the building and its era (1900-1930 flats command significantly higher prices than 1970-1980), whether it's a narrow alley or a large boulevard, whether it has windows on only one side or both sides, whether there's a window in the kitchen and bathroom, and whether part of the building belongs to the public housing agency (among many others). After a while, you start to get a pretty good intuition of how high a property will sell above or below the average.
Another thing about subjective experience is some properties fit certain lifestyles and will be priced accordingly. A flat in the Bastille area (lots of bars, restaurants and night clubs) appeals to people who would pay for the privilege a bonus that a boring father of two (like me) wouldn't consider. Conversely, having an address in the Quartier Latin makes it easier to enter the top high schools, so tiny one-bedroom flats sell surprisingly high (and are then rented out to university students for a far lower price than the purchase price would suggest).
1) having a lower price attracts more bidders, and the bidders may go much higher than they originally planned after they see it in person.
2) having multiple potential buyers in the mix creates urgency, which drives the price up AND lets you sell faster.
3) Homes aren't free to own. Most have mortgages that you waste money on interest again each month, amongst other things (taxes). Selling fast for cheaper may not be less money in the end.
4) Homes on the market for a long time get tainted. People get worried there's a reason no one has jumped on it yet (maybe there's a sinkhole under it, or the water is bad, or some other thing you can't tell in a driveby).
Supply = Very limited.
Demand = Increased and ever increasing.
Result = $$$$$
For mainstream properties, from my experience the market is saturated with people who price above market rates and would rather wait for months than accept a significantly lower price. If you see something that you might consider buying with a 20% discount, you usually don't bother visiting the place. This likely drowns out the people who are trying to set up auctions by setting a very high ask price.
Put differently: while the specifics of this sale (price well above asking) might be impossible in France, the "sale price well above rational market price" phenomenon is really hard to quash when the market chooses to be irrational for a while.
It seems that the English auction goes much faster for the seller, whereas in the french house market, the buyer is the one having a fast process since as soon as they find a good home with a price they like, they can just decide to buy.
That being said, capital controls are an entirely different beast.
I've seen a variety of property systems in different parts of the world. In Sydney and Melbourne for example, it's hard to work out what anything will cost because the majority of properties are sold at auction. If there's a listed price at all, it doesn't tend to tell you a lot.
I haven't seen the state of Switzerland in more than a decade but from my time there, they seemed to have a pretty reasonable system. It's one that basically discouraged property speculation in that short term sales of property attracted high, even punitive, rates of taxation. This could be close to 100% of the gain if held for under two years.
There's two basic problems with global real estate as I see it right now:
1. Real estate is not a reportable asset under FBAR (the US foreign asset reporting framework to ostensibly clamp down on money laundering). As such, it's becoming pretty clear that real estate in the world's great cities are being used for money laundering; and
2. Real estate is being used to park vast amounts of foreign wealth. This is the case in Vancouver, London, NYC and a host of other places.
Now if a bank takes money there is a lot of requirements placed on the bank, so called KYC (Know Your Customer) frameworks. In most cases this simply isn't the case with real estate. Why not? The true owner is hidden behind an LLC in any high end property sale in NYC.
But (2) is the big one. I'm a firm believer that New York, for example, should be for New Yorkers. Not Russian and Chinese billionaires.
Australia has a regime where property purchases by foreigners need to be passed by the FIRB (Foreign Investment Review Board). This typically means new developments. This is a somewhat flawed system as it means apartment buildings are built for and sold to foreign investors. This is killing inner city living.
In NYC ultra-luxury condos are taxed really low, probably the lowest (as a percent of market value) of any property kind in NYC. The reasons for this are complex and NYC can only do so much to fix it because it's up to New York state to fix it and New York state has a whole bunch of SFH owners who will fight property tax reform tooth and nail.
Property investors in general perform a useful service. Those houses and apartments you rent have to be owned by somebody. Kill that regime and where are people going to live? As an example, before about the 1970s, the UK had a virtually nonexistent private rental market.
So I'm all for:
1. High valued properties taking a bigger share of the tax burden (as a function of property value);
2. Restricting to some degree who can buy property in a city; and
3. Taxing non-working property punitively. By this I mean a property that isn't either occupied (by the owner or a tenant) the majority of the year.
This French system however of forcing someone to take the first offer is ludicrous.
[1]: Reference to https://www.reddit.com/r/TheSimpsons/comments/2w2hjs/lisa_if...
re Sydney and Melbourne (and Australia in general)
FIRB is easily circumvented (just buy properties using a company structure, no need to tell FIRB now)
Also regarding the $800k overage paid, this kind of thing has been happening in Australian east coast cities for a decade, due to our govt refusal to enact Anti Money Laundering funds transfer reporting rules for accountants, lawyers and real estate agents.
Australian govt of both flavours review the AML reporting rules every 2 years since 2006 but never actually change it to include realestate.
https://www.macrobusiness.com.au/2017/09/us-cracks-down-on-r...
So now I live in Melbourne's east in a 1930's house last renovated in 1980 that sold for $2.2 million earlier this year and I rent it for $650 a week.
Previous owners bought it for $1.1 million 8 years earlier.
http://www.dailymail.co.uk/news/article-4867622/Melbourne-ag...
Edit: It seems you're right! http://www.pap.fr/conseils/achat-vente/votre-annonce-a-quoi-...
In most real world transactions there's some back / forth with the lawyers about details (ex: "We want your ugly drapes!") as well as non-cash considerations. A seller may accept a lower cash offer over a higher mortgage based offer due to fear that the latter may fall through.
Of course, sellers prefer an asking price offer in cash, rather than with a loan that might be denied, so there's usually some (illegal) leeway if offers are received by mail. If you intend to make an offer contingent on a loan, make sure you print out the offer and bring it with you, and have the seller sign your copy. This lets you answer "There was another offer before you" with "That's not what it says on the paper you signed".
I'm curious to know more about how the non-discrimination laws apply here, since I know there definitely are laws, but if they are as blunt as described, then we'd expect to see more cash-offers-for-asking-price around here.