Am I being Ripped off?????????????????

Discussion in 'Romania property' started by David howe, May 18, 2008.

  1. David howe

    David howe New Member

    There has been a thread on this forum 'Am I being ripped off in Romania' It has got many views and many replies and personally speaking I think it is derogitary to Romania and Romanians. I therefore propose to give clarity to how this thread should be called and that is, 'Am I being ripped off in the UK & Ireland.


    Am I being ripped off in the UK & Ireland.


    There is an agent who is currently advertising properties in a development outside of Bucharest on their web site at just over 350,000 euro and describes them as exceptional.

    Investment Romania can get you a similar property in the exact same development for 195,000 euro if you want it because after having it advertised locally on the Internet and newspapers for the last 2 weeks at this price we have only received one phone call and that was from an agent looking to sell it for us.

    As for studios which everyone seems to want to get this agent is selling them now at over 140,000 euro. We have a person who came to us and asked us to sell 3 at 95,000 2 months ago. We have been able to sell one locally at 95,000 and still have 2 more left at this price. The buyer bought at about 200 euro under 95,000 in August 06 and the only reason we were able to sell this studio was the buyer was not from Bucharest, but Constanta on the Black Sea and was not familiar with the area or realistic prices.

    In September 06 Investment Romania sold a 104 meter 2 bed apartment to clients who looked at these studios then. The 2 bed apartment is approximately 200 meters from the Intercontenental Hotel in the center of Bucharest and is now worth in excess of 200,000 euro and is attaining 900 euro per month rental return.


    The moral of this story is People are not getting ripped of in Romania, they are getting ripped off at home by their own. Therefore, before we get another bnegative slant on Romania I will share another story with you.

    A client recently asked me would I speak to a friend of hers who sold overseas property and was very interested in doing something in Romania. He was very creditable and trustworthy.

    We subsequently spoke with this person and explained what we did and how we worked offering him half our commission of 1.5% of purchase value. (3% commission in total)

    He then asked us why would he sell property in Romania for 1.5% when agents in Bulgaria were giving him 12%? Maybe because you do not want to be ........... people!!!!!!!!!!!!!!!!!!!!


    If people are being ripped off or deceived in Romania it is not Romania that is doing it, nor Romanians. This market offers exceptional opportunity and if anything it is getting better due to the demand for rentals which is now around 7%, but bear in mind 7% will only be applicable to a good purchase not some of the crap people are being deceived into buying.

    la revedere

    David Howe LLB. LLM

    Investment Romania - Property Romania, Invest Romania, Investment Romania
     
  2. well put

    Indeed. Many foreign agents sell properties in Romania and most of them have no other thought but to maximize their profits in a very limited time.

    David, thank you for revealing to us the price asked for these foreign agents selling outside Bucharest. I find it a complete deceit and if it is the development I'm thinking of, I would not pay more than 130 - 135k on a flat there.

     
  3. David Graham 1000

    David Graham 1000 New Member

    I checked the website of who I thought you were talking about. A friend of mine bought of these gangsters a few years ago in Portugal and the building is still not complete. Can nothing be done to prevent this sort of thing happening, these boys should be jailed.
     
  4. Agree it's sad, David Graham. It's heartbreaking to see hard working people wasting their money for some opportunist and schemers to benefit.

     
  5. come and check us out, if you are looking to invest in Romania, We only work with Name developers, and we o not charge over their prices, So no gauging as reported before.
    See urbancityproperties (dot) com for properties in Romania and USA
     
  6. One thing I would like to add to all potential buyers in Romania and Eastern Europe, , I have seen and heard all kinds of scams in Romania, The one thing with land, Is they show you papers to a piece of l;and, that looks similiar to another piece of land you think you are purchasing, However they are selling you land that is worth less ( not the one you think you are purchasing.. thats the most common, Please check everything with reputable lawyers, Most agents will sell you anything, in desperation and don't care about long term business or referrals, They just want the quick buck. So again to all of you buying in Eastern Europe, Be very very cautious, And don't beleive these joker brokers. Try to buy into developments with reputable developers, Don't buy into small developments, Many of them will never be finished. Make sure the developer is fully funded on their project before you buy, And make sure the broker is not trying to charge you a premium over developers prices, Most will , even though they get paid by the developer a commission. Unless you agree to it.

    Happy Hunting.
     
    Last edited by a moderator: Jun 2, 2008
  7. David howe

    David howe New Member

    Whilst I agree in principle to a lot of what you say there are several things I would like to draw peoples attention to in relation to what you say.

    1. In relation to the scams you speak of about land this will only be applicable to someone who trys to take short cuts and save money to their detriment. Anyone who does due dilligence will not get caught out like the manner you state. Only those who try to stupidly save money will!!!

    2. In relation to what you say about agents, I cannot stress this strongly enough but the biggest crooks in Romania are the overseas property agents from the UK & Ireland who now hold themselves out as experts and in reality do not know the difference between Bucharest and Budapest.


    3. As for trying to buy with reputable developers whilst Ideal people have difficulty in doing this and if you look how reputable developers off load liability this to can be a problem, not to mention some of the Scum and I do not use this word lightly who currently hold themselves out to be reputable to the detriment of naiv e investors. One current example we have is of a large so called reputable company selling property outside Bucharest at prices from over 350,000 and we can offer the same property today at 169,000, or apartments starting from 135,000 that we can offer at 90,000.


    4. Small developments. These offer better value and are more attractive on the domestic market, regardless of what agents say Romanians do not want to live in new massive tower blocks that resemble Ballymun or Milton Keynes. Big developments in Bucharest have so far been bought by mainly foreigners with only a 10-20% to Romanian buyers, regardless what the agent stated. We are now soon going to see these buyers soon having to look to sell or rent and they are just not desirable. Small intimate developments are much more desirable domestically and generally better located. However, existing properties still offer the best opportunity as you see what you are buying and have no fears of bankruptcy of the developer, you also see the design you are getting.

    5. Always ask for references of anyone you deal with to show their history in the market and how other consumers have found them.





    One thing I would like to add to all potential buyers in Romania and Eastern Europe, , I have seen and heard all kinds of scams in Romania, The one thing with land, Is they show you papers to a piece of l;and, that lo his will not be


    In relation to what you say in relation to land looks similiar to another piece of land you think you are purchasing, However they are selling you land that is worth less ( not the one you think you are purchasing.. thats the most common, Please check everything with reputable lawyers, Most agents will sell you anything, in desperation and don't care about long term business or referrals, They just want the quick buck. So again to all of you buying in Eastern Europe, Be very very cautious, And don't beleive these joker brokers. Try to buy into developments with reputable developers, Don't buy into small developments, Many of them will never be finished. Make sure the developer is fully funded on their project before you buy, And make sure the broker is not trying to charge you a premium over developers prices, Most will , even though they get paid by the developer a commission. Unless you agree to it.

    Happy Hunting.[/QUOTE]
     
    Last edited: Jun 2, 2008
  8. I do agree with some of the points you have drawn up, I have been here in Romania for several years, I have been a agent for a while. I do know the market pretty well, After many years of experience in other markets, I can tell you, that if you are buying outside of Bucharest with lands sales these things can happen and still do happen. Ask any reputable lawyer, Yes I do know several unscrupulous overseas property agents. Most of them do have no clue of the market you are correct in that aspect. However, Besides them, I can tell you that many local agencies will do the same and still really have no clue of the market, Thank God many of them have left the business. And despite all the warnings and sad stories. I still do beleive the Romanian Market is still a good investment, As long as you buy in the right areas at the right prices. Not just in Bucharest. But many other areas are better buys at this time.

    Now speaking of smaller developers, Yes the bargains may be had with them, However, I can tell you that some developements that had begun construction, Have now been abandoned, Right now the Market here is experiencing a stagnation, and a correction. Land prices have dropped by 20% within this first quarter as reported on local news papers with no end yet to bottoming out, The apartment prices are starting to decrease, I beleive the Bubble is bursting somewhat. Most developers are reporting at most 30% of their units sold with no one coming in to purchase right now. As there are some risks right now in the Romanian market, Due to overvalued pricing. And credit crunching by the banks. With higher lending rates. Though I do beleive the market will begin to pickup steam in mid to later 2009. After the correction. With most of the unworthy agents that are left , I beleive will be gone by then.

    By the way, I am not a overseas property agent, I live and work here daily, I may not be Romanian, But I am not a scammer in any way shape or form. I have not made much money here using these tactics, But my reputation is not shattered.
     
  9. Why Some Will Lose Their Money

    Our experience showed us the local agents are most of the times serious. There are however occasions when one bumps into irresponsible or even naive local agents. The deceitful category you speak of are also part of the landscape, nevertheless if you keep your eyes open and your ears tuned, you will not be deceived.
    On the other hand, some of the foreign agents operating here are amazing! They have the nerve to show people crap and despite all evidence to still call it gold. Transylvania Investment had been contacted countless times either by the foreign developer's agents with sophisticated names and blown up advertising budgets as well as by so called "investors" who were looking into free marketing research and not admitted opinion polls.
    As for the knowledge of the market, I don't think any of us is the possessor of the absolute truth or as some of us elegantly call it "insight".
    The truth is Romanian economy is slowing down, oil and food crisis strike Romania as well, capitals return to the economies that generated them, therefore leave Romania and at the same time "developers" are systematically destroying whatever parcel of green space left in places like Bucharest in order to build some horrific giant constructions. I have never seen so much lack of imagination placed in buildings in my entire life and also I was shocked to see how many foreign investors adored these mammoth constructions and it made me wonder why the hell they criticize Ceausescu for being obsessed with big buildings.
    For the developers and agents one of the reasons beside the lack of any aesthetic feeling is the need to make more money out of the plots of land that were already spicy.
    To add more hay to the fire if any of the people here think it is normal to pay 5000 EUR/ 1 sq. m. of built space in Bucharest at this time, it means I should stop posting anything and mind my own business.
    I think we all agree the market is slow. And we also know that for, I dare say, 99% of these humongous developments the "correction" will be so drastic that would bring some on the verge of heart failure. Perhaps things will start collapsing in August (some little birds gave us some clues in the matter) however we think it's for the best. If the market doesn't adjust now, things will stuck and crush much worse later.


     
  10. David howe

    David howe New Member

    I do not totally agree with what you say or perhaps I have misinterpreted.

    I agree the market has slowed, but the reason for this is the amount of land comodity transactions have now diminished thereby reducing numbers. Apartment sales are also down.
    However, I disagree that well located existing properties will fall in price and still continue to drive on. The main losers will be the new properties the market makers have create an illusion of Growth on when in fact these properties have actually grown so much in price that many are now worth what the UK and Irish agents sold them for, not the artificial price these agents said they had grown.


    As for the crash you speak of do you honestly think the good stuff in the center of Brasov will crash or do you refer to the new stuff on the peripheral?

    Certainly good existing in Bucharest has not fallen in price and rental yields are up. However, if people have bought wrong in terms of location, size and price then it is a natural reaction that they do not benefit from a good investment and it is their recklessness to blame not a failing market.

    Also what you say in relation to economy slowing I totally agree with, but these problems are global not just applicable to Romania. The strong point that Romania and especially Bucharest is the fact that there is an under supply of good properties in the market.

    Investment Romania - Property Romania, Invest Romania, Investment Romania



     
  11. I very clearly refered to the new developments in areas like Pipera and Tunari and to many other such developments around Brasov, Cluj, Sibiu, Timisoara, Iasi, etc, etc, etc. The country is too full of them.

    No the price of properties in the centre of Brasov will not slump because the price per 1 sq. m. was and is still a very good one (1500 - 2000) whereas in Bucharest 5000 means they have reached their peak and will not go up any further if they are in central area. It is ridiculous to ask for a property in Bucharest more than for a similar one in Hague, Paris or Prague. Simple, common sense issue.

    I agree there is undersuply in Bucharest, nevertheless whatever it's being built there and will go on to be built in the area is not covering the real demands of the locals with few exceptions. If your office is on one side of the city and your residence in some village on the other side of the city, you will spend between 2 and 3 hours to go to work and 2 and 3 hours to get back from work, because Bucharest has a mess of an infrasturcture, to many cars, too less parking spaces and a shabby public transport.
    Bratislava shows prices of over 5000/sq. m because you can actually bike to Vienna and many offices moved from Vienna to Bratislava and also despite the massive new development they have a smooth infrastructure, decent public transport and parking facilities.
    So as long as the authorities are not establishing some rules re building in Bucharest and don't put money in developing the public transport and the infrastructure, asking 5000/ 1 sq. m. even in the centre of the town is pure madness.


     
  12. David howe

    David howe New Member

    Exceptional investment properties are still available in Bucharest at around 2000 per meter and if Invesors stick to the center or the metro lines there is still very good value to be had with rental yields in and around 6-7%

    www.investmentromaia.com



     
  13. One in 100,000 properties still values 2000/ 1 sq. m. in Bucharest. The regular price is 3000 to 3500 for central area and the metro lines.
    We've offered and continue to offer exceptional deals on our website, however the occassions when we come across something around 2200 are rare and I am sure it is the same in your case.

     
  14. David howe

    David howe New Member

    Actually no, we can still get very good centrally located & Dorobanti at under 3000 a meter and Unirii Bvld at 3,500 stacking up to 6-7% rental return. Anyone looking good quality new build on metro line is available at Dristor and Golescu at 2000 per meter some with guaanteed rental contracts in place.

    INVESTMENT ROMANIA - Investment in Romanaia, Property management, Due diligence, Renting in Romania



     
  15. If one takes the ads placed by owners on Romanian real estate websites, for example he will see ads at 5,000 EUR/ 1 sq. m, as well as ads at 2,200/1 sq. m, because there is not even a common sense rule operating on Bucharest market. A valuator alone can say how much a place is worth, but that would not necessary stop owners and agents to sell for a higher price. We've also recently sold in Unirii area for 3,250 EUR/ 1 sq. m. However the trend of Bucharest is high prices for low quality. We've recently been shown an apartment on Dorobanti purchased for 5,000/ 1 sq. m. and another for sale in Herastrau area for 5,200/1 sq. m. and this is by all standards, sick!
    Glad to see you offer quality for the new development in Dristor. This is rare for new built/ off plan. I salute you and congratulate you for this offer!

     
    Last edited: Jun 4, 2008
  16. If one takes the ads placed by owners on Romanian real estate websites, for example he will see ads at 5,000 EUR/ 1 sq. m, as well as ads at 2,200/1 sq. m, because there is not even a common sense rule operating on Bucharest market. A valuator alone can say how much a place is worth, but that would not necessary stop owners and agents to sell for a higher price. We've also recently sold in Unirii area for 3,250 EUR/ 1 sq. m. However the trend of Bucharest is high prices for low quality. We've recently been shown an apartment on Dorobanti purchased for 5,000/ 1 sq. m. and another for sale in Herastrau area for 5,200/1 sq. m. and this is by all standards, sick!
    Glad to see you offer quality for the new development in Dristor. This is rare for new built/ off plan. I salute you and congratulate you for this offer
     
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