Charming nest For Sale? Beware bad eggs
My wife saw an on-line advert for a joglo. The traditional peak-top
Javanese homes are rare in East Java so she
called the agent’s listed number.
Five dead calls later a grumpy man answered. He said he couldn’t remember the property as
he had so many listed.
The advert offered a safety selling point: It was next to a police station.
It wasn’t. The joglo was
about a kilometer away. The owner was surprised
to get visitors but kindly gave a tour.
He said it had been on the market for six months. We were the first to show interest but didn’t
buy. He was asking for Rp 200 million
(US $15,000) less than the agent’s advertised price.
In darker days real estate salespeople were ranked alongside
second-hand car dealers. The work paid
commission, not wages. It was the job
taken only when there was nothing better.
No longer. In many
nations the business has been cleaned up by governments angered by dodgy
practices and complaining consumers.
In New
Zealand agents have to pass a lengthy and
costly course to get licensed. This has pushed
practitioners to polish their skills. In
short, they’ve had to turn pro.
The first principle:
They must tell the truth and warn potential buyers of all known problems
with the property. They must help steer
the purchaser through the legal labyrinth so every sub-clause is understood.
In the US
it’s similar. The National Association of
Realtors, which claims to be America's
largest trade association, says its 1.4 million members are obligated to treat
all parties honestly under its ethics code.
Real estate agents’ offices in Indonesia have to be registered
with the Ministry of Trade, with at least two directors certified as competent
brokers by the Labor Ministry.
That’s according to Rudy Sutanto, CEO of Asosiasi Real Estate Brokers Indonesia
(AREBI) in East Java. The organization has 1,200 members nationally.
However Mr Sutanto told Indonesia
Expat that individual salespeople don’t have to be licensed.
“We are working to lift standards equal to those overseas,
like Singapore and Australia,
but this will take time, maybe five years or more,” he said.
“We’d like the government’s help with laws that ban
unethical behavior. The public needs to
be better educated about buying and selling homes and do thorough research on
ownership of advertised properties.”
Smart buyers will read developers’ plans and check repayment
options, preferably using a lawyer.
It’s common to see For Sale
signs on houses include TANPA PERANTARA
– No Agents.
Mr Sutanto explained: “Many sellers don’t want to pay
commission of between two and five per cent. There’s little legal protection
for buyers apart from going to the police, so best to use an AREBI member agent
as we have a code of ethics.”
Another factor could be lack of trust so sellers reckon they
can do it themselves. Wariness is the
watchword.
Here’s how the joglo
offer could have been handled.
As any call on an agent’s phone could be Ms Keen Buyer flush
with cash, every ring should be answered.
If the agent hasn’t been fully briefed they should promise to call back
asap – and do so.
A dozen on-line photos of the home and every one shot with
care and reproduced with clarity can help boost interest. ‘Two W/C, 3 BRm’ is little inducement.
Aspiring agents don’t need to travel abroad to sharpen
skills. Just Google Homes for Sale
in any Western city and see how it’s done.
Also, Bali and to a lesser extent Lombok,
where some entrepreneurs are pitching to the ex-pat market.
It’s reportedly illegal for foreigners to own Indonesian
land in their own names, but sometimes may have hak pakai (right of use) rather than ownership. Best consult an independent lawyer.
Marketing is now serious business. In Jakarta
and other big cities where developers are selling apartments and villas the TV
commercials are often masterpieces of charm.
Decently dressed salespeople with well-rehearsed scripts
explain the advantages – from location to security, from value to comfort. They don’t hand out smudged monochrome
photocopies but colorful brochures published on glossy paper.
Most sellers’ key questions are: ‘How much is my property worth?’ and ‘What’s
the market like?’
In Indonesia
few agents can answer with accuracy.
Elsewhere the gathering and processing of sales data has become so
sophisticated agents need to understand statistics and economics to handle the
information.
The best will be in regular touch with local government and
know of town plans. Is the seller
offering a bargain because a toll road is heading their way? Failure to disclose could lead to much
distress.
In many Western countries sales are recorded along with
handy extras: How long was it on the
market? How many visitors turned up on
Open Days – and what percentage were not serious, what Americans call ‘tire
kickers’?
Were they young first-homers, investors, renovators, expanding
families or oldies downsizing? Were prospects borrowers or offering cash?
Crunching the numbers builds a profile of who’s looking and
what they want – then the promotion can be pitched to that market.
In Indonesia
it seems the greedy just think of a figure, double it and hope someone is daft
enough to open their wallet. The rest
ask neighbors and WhatsApp contacts.
Someone will have a friend who knows a cousin who made a
mint by selling their home for a billion (US $73,000), so that’s what should be
asked.
This is shooting in the dark. Well-established homes have often been
renovated and expanded to suit the owner’s individuality, so unless the street
is full of look-alikes built at the same time, one price won’t suit all.
Is the place on a through road or a corner next to a bus
stop? What are the noise levels? Can commercial operators start a business
next door? When these factors are put
into the equation there can be great gap between dream home and reality.
Said Mr Sutanto: “In Indonesia it’s still buyer and
seller beware.”
(First published in Indonesian Expat, 26 February 2020)
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