Is the vendor always right?


The “market value” of anything, whether it be real estate or any commodity, is the price a willing vendor is prepared to sell at, and the amount a willing purchaser is prepared to pay.

There are other key assumptions to be made but, broadly speaking, this is the gist of the definition of market value.

In respect of real estate, it is NOT, contrary to many people’s opinions, the sum of the asking price for the land on which a property stands PLUS the cost to build the house or shop-house or whatever.

That is the replacement cost which is usually used by insurance companies, quantity surveyors, builders and the like.

Current market value is also NOT the amount a person bought the property for five years ago plus the amount spent on painting the external walls pink or changing the cupboard doors in the kitchen plus, of course, the depreciation in the Euro!

Is the vendor always right?The Chiang Mai market is quite unlike many other property markets in Thailand and, whilst, of course, there are cycles, the huge amount of new property coming to market plus the propensity for many purchasers to buy new homes or condos means that, with some notable exceptions, prices and the volume of transactions of second hand properties over, say Baht 7-10M remains relatively low.

Yet, we continually see vendors whose expectations on value increases are the same as if they had bought in Phuket or Bangkok. That’s not the Chiang Mai market.

Yet we often wonder: Is it just us, active in the market every single day seeing what prices properties do actually sell for who thinks differently, or is the vendor always right about the asking price?

What do you think? Feedback welcome…


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11 thoughts on “Is the vendor always right?”

  • allan caunt

    Very simple .presently
    Cmaai’s property market in general is a Buyer’s Market with very few buyers due to a raft of concrete reasons
    Many thks for reading

  • allan caunt

    In addition to my last post
    The vendor in Cmai has to discount at least 20% to 35%from their opening price to secure a sale
    or initially factor the above discount from the start. The present polictical landscape is not helping matters either From my experience and observations a very hard act to sell property in Cmai for both the Vendor and Agent
    many thks to all for reading

    • Perfect Homes (Chiang Mai Properties)

      Dear Allan, thank you for your comments, it is a very interesting comment on vendors having to discount 20 to 30% from their opening price. We have seen over 50% reductions from initial opening price. The question is where did that opening price come from? It is all to common to hear a vendor say, “well, I have already discounted 1,000,000 `baht”- `If the property was over priced by a million baht then it is irrelevant. It is the same as a buyer offering a very low ball offer then claim the have already come up a million baht.

      The bottom line is the market value of the property! Perfect Homes constantly sells properties at listing price or close to listing price, but we are very careful on which properties we list.

  • allan caunt

    From my actual experience
    the vendor calls the opening price
    with Agents and if accepted
    the Market will dictate from there
    and IMO in most cases the opening price is 20% to 35% over the market price and 18 yrs of permanently living here IMO neither Vendor or Agent knows the approx selling price until its placed on the market
    in summing up .Cmai property market is presently is in the doldrums thats for certain
    many thks for your reply

    • Perfect Homes (Chiang Mai Properties)

      Hi Allan, as you point out the Vendor nearly always calls the opening price, This is normally based on many factors that are not relevant. Then the agents all to often simply agree with the vendor as not to upset his feelings or to appear silly by not knowing the market. Here is another article that you may find interesting. –

  • allan caunt

    Thank you for the link
    which was 4 yrs ago
    the last 2 posts were on the money
    and at least the water was bubbling
    now half way through 2019 the sitiuation is bone dry
    1 to say 3 mil propertys including condo.s are difficult to sell . back in 2015 at least those propertys were ticking over
    Presently in Cmai there is glut of propertys /condo.s for sale
    same with the rental market
    and very few buyers around.
    Therfore my initial post saying .
    if geniune vendors wish to sell in todays market in most cases a discount of up to 35 %possibly more . may get them over the line
    many thanks for a very interesting discussion.

    • Perfect Homes (Chiang Mai Properties)

      Dear Allan, thank you for your response, I have to agree the markets have changed over the last 4 to 5 years, they do all around the world. Though I have to say the market is not dead.
      There are still plenty of buyers around, though it comes back to pricing. One issue for Thailand there is a common misbelief that property prices only go up. But the fact is Thailand is no different from anywhere in the world in the fact that property prices can actually go down.

      Again it comes back to pricing the property to the market if you want to sell.

  • allan caunt

    #Again its down to pricing the property /condo to the market
    if you want to sell#
    but this is not happening
    In most cases the Vendor are still asking for 2014prices
    Where the market since then. has headed south
    up to 35% fall. and more to follow
    largely due to the Polictical and Visa.s situation not to mention the horrendous Smog for approx 3 months
    Cmai IMO has fallen off a cliff
    for geniune buyers and from my experience the only buyers are Savvy Thai / Alien investors getting a rock bottom price
    The Rule Of The Thumb some yrs back. if the vendor cannot sell his property/condo at his price.
    It becomes a lemon on a tree
    and a huge discount is required to sell or take it off the market
    Using the Old Agage
    Supply and Demand dictates the market
    thks to all for reading

    • Perfect Homes (Chiang Mai Properties)

      Totally agree : Supply and Demand dictates the market

  • allan caunt

    The supply and demand adage is not meeting that rule
    presently in Cmai
    therefore a abundance of Property.s/Condo.s and Rental.s are on the market at inflated price tags
    and the geniune buyers are in short supply to meet their price tag which IMO are way over the odds for June 2019 and worse to follow
    a 1997 repeat could become a reality and .sincerely hope not
    for all concern

  • Sean

    What an interesting read. And here we are April 2020. Thailand in lock down due to the virus. Thai gdp in large negative numbers, as is the set.

    Where do we go from here?


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