common sense

A Broker Is a Person ‘Broker than You’ — Here’s Why, and How Most Brokers Mug Things Up

The large majority of real estate agents are on record for neither being overly bright nor having any feel for investing. Most of them are only employees working for some office they don’t feel very strongly for — and, to be honest, neither care about real estate nor investments in general. They are the people giving you “advice” though if you happen to be interested in a particular piece of property.

Bad luck, in most cases then.

While there certainly are exceptions of seasoned real estate agents who have got a hang for particular kinds of property or who are self-employed, sufficiently ambitious, and/or simply love the line of work they’re in, our own multi-year experience in many local real estate markets throughout one or two dozen countries worldwide has taught us many sobering lessons among the few situations that we were and still are really happy about. (Needless to say that we continue working with the brokers offering decent properties in a convincing and proper way and earned our business by standing out from the crowd, as described above).

Take, for example, Irish properties where one large auctioneer seems to be dominating a good portion of the country’s housing market today. While they do offer adequate online support (and even try and stimulate extra action once they feel there aren’t enough interested parties to make prices going the hoped-for way, which is clearly North of already overly expensive Dublin and generally Irish price levels), if you look closely you’ d be hard-pressed finding an agency mugging things up more badly (for the seller side as well as the prospective buyers) than these lackluster employees on their heavily subsidised and overpaid big bottoms.

As a real estate agent, you can hardly do anything worse to sellers’ interests than not provide good information in order to make the subject property as attractive as possible to as many potential buyers as possible. This is the only way of attaining as good a selling price (or final auction price) as possible. Failing to do this means leaving money on the table or torpedoing the chances of selling the property altogether.

Merely look at the fact that they regularly fail to even mention if there is any land included with a property or, if so, how much. It might, in my humble opinion, be possibly of interest to a real estate investor (or buyer) how much real estate there is, in fact, included. Remember, that real estate refers to investment in land, hence that portion of property features might reasonably be expected to be of interest to prospective buyers (if you want to attract them, that is).

Also note that they do have a shiny online presence outlining the properties up for auction in the next session. However, what good is such an innovative — and certainly attractive and very handy, if used in the right manner… — tool when it is more than obvious that listings are produced without giving any thought about the property listed, nor about the audience of these listings and their needs and matters worth knowing. From the very “presentations” themselves and even upon superficial browsing, you can clearly see that they have merely grudgingly sent out a bored trainee to the properties. Equipped with some point-and-shoot digital camera, this person then reluctantly drove by the subject properties without even stopping and regularly took between one (!) and three shots of the house out the side window of their car. No internal images, no details as to property size, not even any reliable outside dimensions of the house, no mention of outbuildings, no nothing.

When you still register or put some nice little house on the “My Properties” list, you may or may not receive further updates on the subject property later on — usually much later on, as in one or two days before the auction. These “further updates” then include essential legal documents (such as mortgage copies from which you cannot even see if you are buying morgaged property or property free of any bank or other liens) or in some — increasingly many, by the way — instances a notice that the auction reserve price has been lowered from such-and-such by 5000 euros (in that case a whopping 15%) or similar amounts.

It is painfully obvious that today’s housing market with its omnipresence of bubble pricing also brings about total incompetence on the part of the middlemen involved as a result of these unhealthy housing market distortions and price bubbles.

For illustration’s sake, look at what they’ve done with this sample Irish property auction offer, and note that only three outside pictures where available prior to the auction date. The desperately ones, needed for any reasonable decision whether to visit and view or not to view, mysteriously appeared the night before the auction — a clear example of Too-little-too-late. Also, that essential question whether or not the place of your buying-on-the-cheap dream comes with or without a €100,000 mortgage has still not been answered — leaving potential buyers in the dark as to what they would be bidding on.

We are watching how that goes and whether or not this particular lot will be sold in the upcoming auction.

For all the complaining, one thing is sure: even with “information” like this, there is a certain informational — along with some entertainment — value in these kinds of auctions. The information bit being some kind of gauge on the state of the Irish property market. As this particular country’s market seems too stubborn to adequately correct after the 2008 events — or even start correcting at all –, it is already of interest to receive at least some messages of “lowered reserve prices” on certain properties for these show that, even in Ireland, prices are now set to adapt, if only slightly, to investment reality.