One phrase continues dominating the market: “I don’t want to pay for other people’s mistakes”

Since the beginning of the year, I have already talked to tens of investors. From the ones who search an apartment to buy for themselves, to directors of major firms, with millions (or tens of millions) to invest in Romania.

I am referring to people who really want to invest, not to the ones who ignore Romania as investment choice, or simply continue "collecting information and properties", without any real wish to invest in something.

Psychology is different, but…
We all say that "market is psychology". And I would like to share with you that indeed the psychology has changed a bit during 2011. There are more people interested in buying properties, more foreigners asking for "opportunities", too many investors checking the market. They are still aminority, but they increase each week, each month.

Their psychology is different comparing to the past. From the approach of "don't talk to me about properties" or "I want to buy something only if the cost is close to 0", nowadays they are more open, like "Do you have something interesting to tell me?"

This is a progress, but it is not enough. Most of these potential investors will remain idle, as they will not be satisfied by the answers they will get.

Only a minority has really changed
What is very interesting in Romania is that the majority of people involved in Real Estate has not changed behaviour. This is why immediately when they see these potential investors approaching and asking for properties, they are always ready to go back to the "old days", treating their clients with wrong mentality.

Only a minority was really changed throughout the crisis. This minority is significant, but it is not enough, in order to create a "wave" and change society's opinion about our business.

Most people approach business only "through the owner's eyes"
… but it is still a "buyer's market"
I represent several owners of properties. I know how difficult it is for them to adjust to today's reality, with declining income, low prices, low interest by investors etc. But in my opinion the best way to protect their interest is to explain to them that we still live in a "buyer's market". The buyer sets the price, the procedure, the rules of transaction. This is why the only transactions during the last 2,5 years were the ones that their owners were quite flexible, with their papers in order and a price close to the buyer's expectation. Exceptions were the cases where the owners managed to add value to their property. Anything else remained at the stage of discussion, or maybe not even reached that level.

In the same time, most people approach business only "through the owner's eyes". They don't treat clients with the respect they should, they tell them obvious lies, plus they don't understand the basics of client's psychology nowadays. All these result to thousands of frustrated people:

• Frustrated owners, who don't see a client reaching them, while their environment tells them "not to lower the price, as the market will turn around very soon".
• Frustrated Real Estate brokers, lawyers and all other professionals involved in Real Estate business, who don't see enough transactions, sometimes not enough even to pay their fixed costs.
• Frustrated investors, who don't understand how it is possible to be treated like this, not to be heard at all, to be offered more or less the same crap they received in the past, overpriced, without clear papers (many times).

"I don't want to pay for other people's mistakes"
The clients transmit a simple message: "I don't want to pay for other people's mistakes". It is rough, raw, brutal, but this is what investors keep on saying:

• "I want to buy an opportunity, not to rescue someone who made a mistake and to take his place in trouble",
• "I search for a low basis for my investment, I don't care why someone else chose to start his investment from a higher level",
• "I don't want to risk",
• "In today's economy, money is a rare resource. I don't want to spend mine on properties which do not give me a clear sign why to buy them".

"So should we surrender to clients' wishes, just because they happen to have money today?"
"So what are we supposed to do? Surrender to clients' wishes and do whatever they tell us to do? Just because they have money now?" one might ask me. No, you should not. If you don't really need to sell, wait for better days. 2013 looks a much better year than this one.

But if you need the money now, stop avoiding looking at the mirror. Start investing in your property, making it attractive for investors. Add value to it and try to think of a price which will be closer to their expectations.

This does not mean that you should sell for "nothing". But between "nothing" and "everything", there is still lots of space for negotiation, isn't it?

2011: Another year with advantages for the serious professionals
I am 101% sure that during this year we will witness more transactions than in 2009 and 2010. The interest exists, there is a small portfolio of good properties available for sale at "a price close to buyers' expectations" and there are also tens (if not hundreds) of serious professionals ready to promote the deals.

But you will see that (except rare cases, with hidden agenda) almost all transactions will be driven by clients' wishes. This is why there can not be an argument like "you know, the owner bought it expensive". We need more and well structured arguments in order to bring people to negotiation tables and from there to the notary's office.

And the most important: We need more happy investors, happy with their investment. Without them, nothing will change.

The ones who will get it faster will be the ones who will benefit the most.