Wednesday, January 23, 2013
I could tell at a glance that Chuck liked his brand names. He wore a logo’d shirt, designer jeans and an expensive celebrity-endorsed watch. So when he started talking about a potential property purchase, it figured he’d buy something with a name. A name he was familiar with. A name he could trust. A name he’d happily pay a premium for.
After all, it was a sure-fire bet, right?
But Chuck’s belief in big-ticket names took a battering when he talked to me. You see, Chuck didn’t get one of the fundamentals.Those big-ticket names attract people like Chuck. Those big-ticket names get to charge big-ticket prices. And those big-ticket names are often no more than a name.
Chuck wanted to buy in a building because he thought he knew the people behind it. Wrong. The developer was a so-so local developer who had paid to use a big-ticket developer’s name. The local developer would build the condo tower. He’d choose the finishes. Chuck would pay him directly. The only involvement for the big-ticket personality was collecting his fee from the developer and showing up to a couple of publicity events.
It’s not just big-name developers. The same applies to brand-name real estate agents overseas, too. They carry a name that you know from back home. It gives you a feeling of security and comfort. But these names are simply franchises. A local real estate agent pays for the right to use the name. They don’t get the same training or exams their counterparts get back home. They aren’t bound by the same buyer protections that apply when you’re buying back home, either.
So, when you’re buying overseas, do your homework. Don’t take those familiar names at face value. Dig a little deeper. Look at local market values and pricing trends to see if it’s worth paying extra in a building with a celebrity name tag. And find out if that big name protects you if anything goes wrong, whether it’s a developer or real estate agent.