Overseas Real Estate Blog

I thought that might get your attention...

Today I start the debate with my views on whether agents are trying to do the best for their clients. Many do for sure, but some I think just don't have a clue.

I was prompted to comment on the question of "Do real estate agents have a clue?" after it I spoke to a "first time overseas" husband and wife investor team had taken at face value all the information they had been given by an agent. The problem was that they were originally enquiring about a single property but instead were told that they stand to make more in a property scheme termed as a "property investment fund".

Where's the detail?

Whilst a slick brochure seemed to answer their every conceivable question, and pointed out some of the risks involved, it was clear to me that they had no real understanding of the true risks involved. More than this, a property investment fund was not what they were after. It then transpired that the agent had simply followed a well rehearsed presentation which sounded respectable and seemed affordable. Those "developer profits" seemed like a good idea and she was ready to sign.

Luckily, the couple realised just in time that they should seek alternative advice and asked a friend who suggested to stick to their guns and buy a property outright. In hindsight, she admitted that she was close to investing in something that was a long way from what she really wanted - which was a nice place on the beach with sea view and was hot from October to May. She and her husband plan to retire there in the winter. They have just got back from a weeks trip having had a good trip prepared and well equipped. They went understanding the areas to focus on so they felt happy to reserve. As a bonus, they paid less for their property than they thought was possible -just £51,450 in Hurghada Egypt.

I was recently exploring a new development site and was staggered to discover a project that looked great in theory but had a huge shortfall in due diligence work. I was told that the due diligence pack was complete and the other agent was happy. Clueless agent you think - well it is not uncommon for agents to ask precious few questions before taking properties on. Fine for a simple resale in Reigate perhaps but I have learnt that emerging markets require a savvy approach to help avoid poor decisions.


Integrity Pays

Your agent often fails you when they fail to be forceful about the facts of buying a particular property in a particular market. Take this recent example: a client came to us after trying to buy land and rural house in Bulgaria. There are huge risks to deals here known by those, like me who have done this. The agent failed the buyer by not explaining all the many risks and explain the way the deal should really be done. Why? They don't want to tell a buyer what they would rather not want want to hear.

Here I feel that some agents fail themselves as well as their client, because their client will quickly get disillusioned when issues, such as last minute price rises, complex ownership, unclear permissions, road access, utility supply and other complexities emerge that lose the deal. Deal lost, and agent gets no commission. More stories welcome...