“Flying properties” are always a hot trend
Part 2
- to read part 1, click here
An excellent property, for a… house!
He was not a bad person too. On the contrary, he was open to discuss with me, presenting to me documents and trying to structure his arguments based on the fact that the property has opening to the lake. "Lake? What lake? You told us that it is located close to Baneasa Mall" you may ask me… Correct, this is what I told you, as this was my information. But it seems that the property… jumped to the west, so as to reach a lake! (You know… "flying properties" are always a hot trend, as many times people lie regarding the location, or they simply don't know it. Don't think that this happens only twice per year, like the birds fly away and return… Please keep your eyes open in any case).
The property had an opening to the lake. Too bad…
So, the property had an opening to the lake. Too bad… even if I was in good mood, I was unable to lie to the owner and not to explain to him the serious defaults of his asset. The distance from the lake, the water at only 2 meters under the land, the difficulties of foundation… Especially for the last one, the discussion is always interesting. People don't care about the foundation problems, saying that "if you want to develop, you can find solutions for everything". They focus only at the price of the land, forgetting the rest of the costs which follow. In the past this used to be the rule, as even many developers considered that "no matter what will be the cost, I will just raise the prices and sell". Now we know that this is not the case…
To cut the long story short, I was in the uncomfortable position to explain to the owner why his property was not good. Why he can not increase the (very low today) coefficient, why the price he will find in the market will be very low. "But many agents promised me prices which are multiple times more than this". "Ok, so where are their clients willing to pay these prices?" "I don't know… they are coming soon…" "Yeah. So why don't you sit down and wait for them? You can also practice some yoga too, so as to welcome them feeling relaxed and happy. I am sorry but the place is good only for a villa, a very nice one indeed, but nothing more".
An agent exploding, an owner in trouble…
He didn't swear at me, as I expected. He remained calm. I can bet that he knew I was saying the truth, but he didn't want to admit it. But the agent next to him was already feeling impatient… "Mister, you heard mister Ilias. What do you want now? Why do you continue these?" he exploded at a moment! For the first time in my 5,5 years in Romania I met an agent being upset of what an owner was saying and showing it like this!
Feeling bad for the situation, I interfered and tried to provide some solutions to the owner. But all of them had a major problem: Real prices… How easy is for an… "almost millionaire" of 2008 to accept that today he can not receive not even 100.000 euro? Definitely not easy at all… He was looking at me, then again at his papers, then the agent (who was nervous and red…) then again at the papers… He brought out one paper, asked me if this could help. I explained why it could not. Then another one… then one more… I had to calm the agent every time, explaining to him that the owner does not look like a person who wants to trick me, but like someone who tries to understand the reality…
In the end I explained to him what I expect to happen in Romania during the following period of time. The agent confirmed that my previous predictions were right. I could see the disappointment of the owner drawn in his eyes. But he surprised me by thanking me warmly. He told me that he will think and that we may work together to find a solution to his problem. I replied that this is not so important, he can choose his collaborators.
More serious people around us lately
I don't know what this owner will do in the end. Probably it will not be my business. I am happy that he is a well mannered, civilized person. I usually complain about the crooks that I meet, but I want to assure you that he is not the only serious person I meet. And I am happy to inform you that lately the serious people around us increase, with an improving speed…
It does not really matter if we agree together or not. The first step for the market to recover is the majority of the market players to be mature enough so as to have serious discussions. No?
July 2010, 10 months later:
I don't know what happened to the owner, but now his property definitely costs 100.000 Euro or less (if there were any doubts last year)
The agent continues collaborating with me and now I work on 2 deals that he provided me. He continues being one of my favourites.
The situation today is exactly as I was explaining to them last year.
The following period sounds even more difficult though…
PS. I wish that this owner will really get the best out of his property… I still remember him with major respect, I wish many more people would be able to discuss as he did.