Wednesday, August 17, 2011
It was my first visit to this little beach town in almost four years. Back then it was buzzing, with tourists galore… and property buyers coming in droves to snap up their piece of seashore paradise. Waiting on the sidelines to assist those property shoppers was a motley group of foreigners. They’d all moved to the town two or three years previously, leaving their old lives behind, and set up shop as real estate agents. They wanted to cash in on the town’s property boom.
Today, the town still buzzes with tourists. But the property shoppers gradually disappeared with the meltdown in the US and Europe. And when the buyers stopped coming, the real estate agents closed up shop. They followed the real estate dollar to new markets and new countries, or quit the real estate business and went back to their old lives.
My host, a real estate agent himself, pointed out the locations of the offices of his former rivals. Today, my host is the only real estate agency in town. He started before the others. He watched them move in during the boom years…and move out when the lean years began.
He still makes a decent living, mainly in re-sales. Times are tougher when compared to the boom years, but he’s not moving on anytime soon. He has a young family, he enjoys his life in this little beach town, and he’s settled. Plus, he has local ties.
He’s exactly the type of real estate agent I like. He’s lived here long enough to get a feel for the local market in good times and bad. He knows the land with title issues, the homes that flood regularly, and the areas where you’ll never get permission to build. He shares his knowledge freely with buyers, trying to help them make the best choice when it comes to buying. His local connections help when he needs information or wants to track down an owner.
And his local community standing also tells me that he’s less likely to get involved in grey areas, and he’s less likely to decide to move on if a property deal turns sour.
That’s the problem with agents who have no local ties; they may not be there when you need them.
I’ve seen them move from Spain to Dubai when the Spanish market stalled, only to quit Dubai when that real estate bubble popped.
Now following the market is fine, in itself. But they often leave their buyers in mid-purchase…don’t deliver the property management they promised…or move so they can wave goodbye to a raft of complaints from clients.
Agents with strong local ties don’t have that option. As one agent we work with who’s married to a local put it: “my wife will kill me if I bring shame on her family???.
Now, it’s not easy finding a decent real estate agent. We’ve met with countless agents here at Pathfinder, and we only work with a tiny percentage of them. Most of the rogues we weed out immediately.
But even we’ve had agents who turned greedy after a while, or stopped delivering good service to buyers. We promptly cut them loose…but it shows that even your best screening efforts require continuous monitoring. (Interestingly, those we cut loose all had one thing in common: no local ties.)
We look for a few basics with real estate agents, and so should you:
1. Check the Licenses. Many countries don’t have a licensing system. In those that do (Panama and Brazil, for example) only work with licensed agents. That way, you have some recourse if things don’t go to plan.
2. Don’t blindly trust brand name franchises. Don’t think a familiar brand name will deliver better, more reliable, or more trustworthy service, than a local independent agent. The only difference is that the franchise holder paid a fee to use that familiar name.
3. Find an agent with local ties. If your agent was born in the area, married a local from the area, or has lived there for a long time, he will usually have more in-depth knowledge of local market history, dynamics and pricing. And if things don’t go to plan, he’s more likely to try and fix it rather than flee.
Follow these basic rules, and your overseas buying experience should go more smoothly. For detailed tips on picking an agent, follow this link to my article on how to choose your overseas real estate agent.
P.S. As I said, we only work with a small group of real estate agents. You can follow the link to see a list of our international agents (and the real estate developers we work with, too).
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