Markus A. Schenk
Men of Influence Autumn 2022
“Selecting the perfect agent to achieve the best sale price”
Markus A. Schenk. Bestag. Switzerland.
SELL AT THE BEST POSSIBLE PRICE.
Selection, Valuation, Choice and Compensation. Very simple: Mandate us.
Get the three best agents for your property sale to visit and evaluate it. Get five evaluations as each agent does one and we do two more. Choose one agent to sell and we will set up a bonus/penalty performance contract. Sell at the best possible price.
TRANSPARENCY-WORK FOR THE SELLER.
With our unique business model we assure transparency. Bestag is 100% focused on maximizing the sale’s price: Properties are evaluated in the best manner by the most competent agents and we set up a truly effective bonus/penalty system to make sure the agent works for the seller.
Objects sold with Bestag have a 5 to 20% higher price generated than others which have been sold by discount agencies or flat rate agencies.
Meet Markus A. Schenk
1. Tell us about your background Markus
I grew up in a hotel family and took my first gastronomic steps in the Hotel Sonnenberg on the beautiful Zürichberg, which my family ran for two generations. Before graduating from hotel management school, I worked in several five-star hotels around the world, before taking on responsibility for the development of the Subway sandwich chain in the French part of Switzerland and Ticino. With my partners I had up to nine own subway restaurants. Thanks to the development of the fast food chain, I was in daily contact with various real estate developers. I planned and drew the future restaurants and conducted negotiations to get the best possible lease.
2. What motivated you to move into Real Estate?
Bestag, of course 🙂 However, strictly speaking. I’ve been working in real estate for the past eight years. I knew that in this highly competitive and sometimes dishonest market, I knew my strengths were best. By handling people with all kinds of backgrounds, whether I deal with a Prince, multi billionaire or one of the 70 bell boys, which I was in charge of at Burj al Arab in Dubai, I am able to understand what the other person wants from me. Customers in real estate are not always seen as very easy. Thanks to my people skills combined with my experience I gained over the last decade, the opportunity working with Bestag was just perfect for a new chapter in my life. During Corona, I decided to reorient myself into real estate as this part of work I liked the most during my seven years with Subway. The final trigger was when a very good friend introduced me to Patrice Choffat, the founder of Bestag. Our first meeting was scheduled for an hour in the morning, but ended up dragging all the way to a business lunch at a Chinese restaurant. We both instantly knew that we could form a dream team. Once you understand the Bestag concept, you have no choice but to be hooked on it. Over time, I am convinced that all home sellers who want to achieve the best possible sales price will call us.
3. What sets ‘Bestag’ apart from other Real Estate services?
With our unique business model we assure transparency. Bestag is 100% focused on maximizing the sale’s price: Properties are evaluated in the best manner by the most competent agents and we set up a truly effective bonus/penalty system to make sure the agent works for the seller. Little known fact: Most agents work for the buyer in price negotiations, as they just want to close the deal. Objects sold with Bestag have a 5 to 20% higher price generated than others which have been sold by discount agencies or flat rate agencies. Furthermore, why should a flat rate or discount agent go the extra mile to increase the sales price if they already found a buyer? I invite you to read the following article on K TIPP: Real investigative journalism, by the way. not paid infomercial.
4. What is the ‘Bestag’ formula?
Four key initial steps: Selection, Valuation, Choice and Compensation. Very simple: Mandate us. Get the three best agents for your property sale to visit and evaluate it. Get five evaluations as each agent does one and we do two more. Choose one agent to sell and we will set up a bonus/penalty performance contract. Sell at the best possible price. Last but not the least: our “white glove” service doesn’t cost anything more to the seller as we are paid with a transparent part of the brokerage.
5. Time is Money, how can we benefit from ‘Bestag’ in terms of performance and competence?
Our survey of 300+ homeowners showed: 72% of the property sellers look for the best price. 14% wish to spend as little time, troubles and effort as possible to sell their real estate. Our service is tailor made to combine both. To be clear for those who belong to the 14% group, you won’t be able to avoid a couple of hours of video calls as well as a half day time to scan and interview the three agents. Nonetheless, after these few hours of your time you will be able to lay back and you let the best agent do his job. With our bonus/penalty formula you can be sure that the agent tries as hard as possible to get his extra bonus. Moreover, as mentioned all we do is meant to optimise the selling price: And we succeed. Our database of 180 completed sales to date shows we beat the agent’s consensus valuation by a range of 5-20% higher sales price. By setting your sale up with Bestag: You have the right price and the right agent, which simplifies the sale considerably. Whoever has worked with someone who was clueless about their job will understand.
6. Switzerland relies on a stable growth of the Real Estate market, will this trend continue?
The economic and demographic aspects tend to support that. And this supports the “location location location” principle of real estate: In prime locations, the market has a strong upward trend in the middle-to-long-term. On the back of a strong economy, Switzerland has been able to attract highly skilled people, and these have tended to bulk around the economic centers like Zurich, Basel and Geneva. The net immigration has been around 40’000 people per year between 2008-2019. It slowed during covid, but is booming again in 2022. The Swiss have been consuming more and more real estate: the m2 per inhabitant, so that’s your size of property divided by occupants, has been rising steadily as official stats show. And there’s a trend to properties occupied by one person only, and those consume vastly more m2 per capita. Also people born in Switzerland consume more than expats, which means that expats kids are also likely to consume more than their parents, if they stay in Switzerland. And to compound, building activity is hindered by the lack of building land and slow permit delivery. That’s the situation you may know, if you are a buyer. A Credit Suisse study recently said that the boomer generation will hand over about 500’000 homes by 2045. This has been true for a long time, by the way: People over 60 are much more likely to be homeowners, and therefore sellers. But we believe this effect to be largely compensated by the newly formed households over the same time period.
7. The Swiss Real Estate market had a stellar performance in 2021. People talk about crashing house prices in Switzerland. What are your 2022/2023 predictions?
Well, no one knows where inflation or interest rates are going, so I will just tell you about our base case: Prices in the greater Zurich area, Geneva, Basel and other prime locations (e.g. St Moritz, Zermatt and top tier ski resorts) will stay high and maintain their prices. In more remote areas, prices will come under pressure, as regular homebuyers do not see the short-term business case of homeownership anymore. With coming inflation however, we believe that buying a property to live in is a better way to put your savings in a safe place, where they will appreciate with inflation, rather than being eaten up in a savings account.
8. Will 2023 be an optimal year to sell our homes and why?
In terms of timing, it will clearly be a good one. Our view is that we will avoid a crash in most premium areas, and even B areas (think Winterthur and similar), but we may have houses appreciating less than inflation over the coming 5-6 years, especially in the event of an economic recession. However, as stated, homeownership is a great inflation hedge. One thing that I would recommend to all expats is to avoid being a landlord in Switzerland. In most cantons, it prevents you from deferring the property gains tax “Grundstückgewinnsteuer”, so by being a landlord 3-4 years, you create an unnecessary immediate tax burden. Our recommendation is to stick to the standard approach of selling your current home when you upgrade.
9. Why is home ownership so low in Switzerland?
Most Swiss people are happy renters because the law very strongly protects the renters, so that’s one aspect. On the other hand, the “Tragbarkeit” criteria imposed on banks to check that aspiring property buyers could bear the interest payments even if the rates were 5%. And buyers have to come up with at least 20% of the property price with their own funds. This is great against a price crash, but is a substantial entry barrier. Rule of thumb: Households can only buy properties priced up to 5x the household income.
10. What is the average purchasing price of a single-family house in Switzerland?
Median prices such as 1.1mio francs in the Canton of Zurich show that property values are lower than you would expect. Many sales happen outside the big cities, though. We prefer to express it in CHF / m2 net living space “Nettowohnfläche”. In Zurich city and the lakeside suburbs, it has risen to 20k CHF / m2 or even more (every now and then, we even see over 30k), whereas you can find more decent prices in the non-lake suburbs, 10-15k CHF / m2 depending on which suburbs. And for those who want a big property, you can go further to Aargau, where you will enjoy lower taxes and property prices, in return for a longer commute.
11. What is the cheapest canton to buy a house?
Jura is the cheapest, but in many places in Switzerland you can buy houses for the price they cost to build. Or even less in the case of old properties. But it must be said: Properties in Zurich, Geneva or Basel (and even in some direct surroundings, e.g. Kanton Schwyz next to Lake Zurich) are basically an investment that has very little chance of losing value. However because transaction costs are high, one should only buy to stay in at least 6-8 years, ideally more.
12. And finally Markus, if you were to invest abroad in Real Estate, where would that be?
I would Invest in the company Homelight. They do the Bestag concept in the US. Or I would buy something in Mallorca (outside of the drinking tourist spots). This type of real estate is also an evergreen…