Great in depth analysis by Tom Thiele, experienced broker
Some blame the economy and the crisis, some blame high prices but what are the main reasons Croatian real-estate is not selling even though we are an attractive tourist destination?
Tom Thiele, experienced broker and CEO of Top Adria Luxury Real Estate wrote an interesting indepth analysis which we are publishing in full, with his permission, of course.
Potential buyers don’t do their homework. Many times buyers can’t or won’t define the most basic question “who wants to buy what?”. For example, instead of a single buyer or couple, several people show up at a viewing including siblings, cousins or friends who all may or may not be involved in the decision making process. The result has never been an agreement on anything, just confusion. The same holds true for the type of property itself. Despite attempting to clarify this upfront, viewings get scheduled for a certain type of property such as a cheap stone house in the interior of Istria but the desired property should actually be a larger property directly on the sea (for the same low price). Frustratingly, clients often don’t know if they actually want to buy, build a property or look in other regions. At the same time several estate agents get contacted for the same and/or different properties.
Timing. Most potential buyers look for properties while they are on summer holidays in Croatia which is, of course, exactly when other people are on summer holidays in Croatia and most properties are let to those holiday makers – showings are then only possible on Saturdays between guest arrivals and guest departures while a property gets cleaned, which many potential buyers don’t find convenient for them. This results in much fewer showings taking place and properties not looking their best.
Unrealistic price expectations. This holds true for sellers and buyers. Many Croatian sellers are hoping for “golden retirement money” or other dreams come true from selling their property. Many foreign buyers have nostalgic memories of when Croatia was part of Yugoslavia 30 years ago and prices were LOW. The result: both sides are too far away from each other to come to a mutually satisfying compromise on the sales price.
Unprofessional behaviour. Unfortunately while on holiday some people tend to forget what is normal behaviour and a certain degree of professionalism. The list of “don’ts” ranges from making appointments and not taking them seriously to not keeping them at all, to wanting estate agents to be everything from taxi drivers to tourist guides, however all at no charge. Not to mention showing up in beach attire because “it’s hot”. Unfortunately also many sellers don’t prepare their properties for sale professionally, leaving them untidy, cluttered or used by someone at the time of the showing who obviously doesn’t care or want that the property gets sold.
Lack of statistical data. Croatia doesn’t have and hence doesn’t make available what foreign buyers are used to from their home countries: Property statistics showing what has sold where at what price, what the value of properties are in different markets etc. As a result a sort of “Wild West” situation prevails in Croatia with lots of people having many different opinions on what the value and prices of properties are or should be. The internet offers an additional “playground” resulting in many “pseudo experts” talking about the property market as if they had been in it for years, mixing topics, not knowing about or interpreting laws, or “knowing everything” and distrusting anyone etc.
When it looks like “anything goes” very little happens…