Built-in kitchen, notary fees, sports cars – which goodies really help to sell a high-value property? Guest article by Peter Rabitz (Managing Director, RabitzProperty Consulting)

The current situation on the real estate market demands a lot from sellers and agents. Fancy goodies help to counteract the cautious mood on the buyer’s side. Optimally, lucrative incentives in combination with excellent property features can make the difference in the sales talk.

Which measures really make sense? Which do not? What should sellers and buyers pay attention for? Are we even talking about American conditions, with “add-ons” in the form of luxurious sports cars?

In the USA, it is actually quite usual to include a Ferrari or Lamborghini as “icing on the cake” for high-priced properties. This makes it easier to arouse the interest of potential buyers, so the slogan goes.

In the case of properties for which sums in the two- or three-digit millions are being asked, this practice can even have an effect. In Germany, however, such additional measures are still rare. Traditionally, properties in this category are even seen as overpriced. In the worst case, too extravagant goodies can also lead to irritation instead of steering the business in the right direction.

And not without a reason: if a property – even in the high-end range – is provided with non-property goodies, there is much to suggest that certain challenges in financing or operating the property are pre-programmed.

On the other hand, corresponding property- and process-related add-ons to the offer are quite common and sensible in this country.

Furthermore, locations like the German metropolitan of Berlin are also underestimated. While the economy is internationally competitive, the luxury lifestyle is flourishing in the German capital too. Moreover, German real estate prices are still at a relatively moderate level in comparison to other countries prices.  

Which add-ons can be used to generate attention, attract interested parties and accelerate or positively influence the decision-making process?

The range of “goodies” is vast

In order to identify and select suitable “goodies”, it is worthwhile to know and remove the typical “pain points” of buyers. For example, many prospective buyers are bothered by the ancillary purchase costs.

The estate agent’s fee can also be negotiated as a goodie from the estate agent. Especially if this makes a meeting between buyer and seller more likely, adjusted commissions can be a useful additional measure. In addition, lucrative sharing deals in which the partners benefit from the joint brokerage fee can bring in new clients through referrals. To put it exaggeratedly, partner participation in commission is thus partly more economical than “chalking up” everything yourself.

Other cost items such as land transfer tax or notary fees make more sense. But also contributions in kind such as alterations according to the buyer’s wishes, the addition of equipment details such as fitted kitchen, fireplace, flooring. Even the provision of a (garage) parking spot can not only increase the attractiveness of existing properties enormously. In times of high interest rates and inflation, these fine extras are currently the deciding factor – and make all the difference in a purchase decision.

For some time now, market participants have also observed that interior designers or craftsmen attend viewing appointments to proactively answer questions, estimate costs and make suggestions for individual design. This trend includes old and new buildings alike.

This shows: Brokers who today limit themselves exclusively and purely to brokering properties must expect a lack of success. Since the market has largely developed into a buyer’s market, the demands on estate agents are also changing: complete documentation of the property, know-how about the socio-economic situation, expertise on the energy condition of the property, but also the odd extra in negotiations are increasingly part of the modern requirement profile of estate agents. Strong networks with financiers, developers, lawyers, tax experts and administrators are also an integral part of the service portfolio of today’s real estate agents.

But we are still a far cry from so called “American conditions”, in which a first-class sports car is added to the offer. On the one hand, there is a lack of interest on the buyer’s side; on the other hand, this approach must also pay off for sellers and estate agents. No one can afford cut-throat competition any more. The focus on goodies must not obscure the view of the real value-relevant property characteristics:

the object’s condition and potential remain priority

If the basics are not in shape, even the most beautiful items are irrelevant. In other words: as soon as a property is in poor condition, the building structure raises serious questions, it has no lift, no garden and no balcony, the cut of the flat raises eyebrows or the last basic renovation was too long ago, a new fitted kitchen or a cooker will not bring about a turnaround.

As is well known, it is one of the duties of experienced and committed estate agents to point out potentials, to develop options and to paint a convincing picture in the minds of prospective buyers. The basic prerequisite for this is a careful stocktaking including all relevant cost aspects.

The energy condition and the measures derived from it play one of the biggest roles on the buyer’s side. Once this homework has been done thoroughly and transparently, suitable and clever goodies can be found and incorporated. The buyer is then provided with all the necessary information and is presented with the appropriate goodies depending on the situation. The aim should always be to come to an agreement that satisfies all of the involved parties.

Summary? Rising prices would also help brokers

Negative trends such as falling prices are already flattening out in perspective – and in some price segments a first recovery can also be seen. In the long term, property prices will rise at least moderately, especially in metropolitan areas and in attractive locations close to them.

Accordingly, it can be summarised that goodies could and should be used today and in the medium term. Properties with solid substance and promising potential can thus be made even more attractive. Nevertheless, one must proceed with foresight in order not to get stuck with owners with high running costs. Brokers will continue to develop a good sense for bringing sellers and buyers to a common level. Goodie curiosities like in the USA will not be necessary for this.