28 November 2007

Stealing Beauty









One of the things that comes as a surprise to many is the incredible variety – both literally and figuratively – of the American landscape.

Much more than cookie cutter holiday villas and midtown skyscrapers, there are small villages everywhere, north to south, east to west, all different from each other and distinctive in any number of ways. There are breathtaking vistas, climates of every sort and, except in urban centres, an astonishing amount of space.

One of the things I want to do here is to introduce you to places you never knew existed. Quirky, perhaps, certainly unique, always enchanting.

If you fancy something that satisfies on any number of levels, imagine this spectacular view, picture yourself standing here with a cup of tea, awed and comforted at the same moment.

Yes, by goodness, a real long cabin. But not just any old nostalgic piece of rustic real estate, rather a sublimely well fitted out home, from the two full baths, central heating and cooling systems to the exceptionally sophisticated kitchen.

But imagine further. Imagine all this AND a local community renowned for the quality and reach of its local theatre, not to mention superb trout fishing. A community which belies all stereotypes and is warm, welcoming and eclectic.

It is tucked into an unspoiled corner of the American southeast, affording absolute privacy, yet close to anything you might fancy, whether it be the arts, music or even airports.

And who could imagine that it can be had for a mere €200,000?

21 November 2007

Real Estate Agents: how they work

The process of purchasing property in the United States is really quite straightforward, although one might not appreciate that while immersed in the game.

Real estate may be purchased directly from the owner or, if it is listed with an estate agent [“real estate agent”], he will necessarily act as a middleman, handling all discussions and negotiations with the seller. The reason for this is that the real estate agent in the States is acting FOR the seller, as their agent, not as yours. This is how they earn their commissions, a percentage of the purchase price which come directly out of the proceeds of the sale. While this obviously gives them a financial incentive for obtaining the highest possible sale price, their motivation to actually close the sale can be even more paramount.

The “listing agent” may not be the person who is actually showing property to you, however, since, if the property is “multi-listed” [that is, not an “exclusive” for the listing agent], then any other agent can advertise, show and “sell” the property. In this case the agent with whom you are working will negotiate with the listing agent who will, in turn, negotiate with the seller. If a sale is made, the two agents will then split the commission.

Yes, double the incentive to keep the sales price high.

Is there any way to avoid this ménage à troi?

Yes, if the property is for sale by owner [meaning not listed with, and thus under contractual obligation to, an agent], by dealing directly with the listing agent [who might be more amenable to a lower sales price, since her commission will obviously be higher than if you were dealing with another agent] or by using a “buyer’s agent.”

Buyers agents are just appearing in Ireland, but they have been around for quite some time in the States. The idea is that they, unlike the real estate agents, are working for you, the buyer, acting in your interest, negotiating for more favourable terms and so forth. They do not work for free, of course, charging the buyer flat fees and/or a percentage of, yes, the purchase price on the property. This can create a fairly convoluted dynamic, raising questions as to possible collusion between the buyer’s and seller’s agents [again given the incentive to maintain an elevated sales price], whether or not the buyer’s fee can be financed and various other issues.

I have never used a buyer’s agent myself, and most of my experience with real estate agents has been fairly benign. Given the nature and complexity of the industry, I have found that, despite all the obvious caveats, successful agents tend to be remarkably knowledgeable, smart and flexible.

My best advice would include:

Research the local market as much as you can. This includes reviewing the “comps” [details of completed transactions of similar properties in the area] yourself, rather than having them cherry picked by an agent or seller.

Carefully evaluate any potential agents, preferably before they show you a property [since once an agent has shown you a particular property, you will be stuck with her if you do decide to purchase it]. Ask to see her sales records and references, investigate the agency with which she’s associated and make sure she’s fully conversant with any and all regulations concerning foreign nationals.

If you do decide to use a buyer’s agent, do all the above and then some.

20 November 2007

But Where?

Perhaps you have a long honed fantasy of a beachfront Malibu bungalow or a sleek Manhattan condo, a hilltop spread overlooking the valleys of Northern California or a luxurious nouveau-palazzo in Florida.

Or perhaps you haven’t a clue.

If one were to believe the standard buzz, all “foreign” buyers in the States are limiting themselves to scooping up condos in Florida and New York City. I believe the term 'self-fulfilling wishful fantasies' might apply, since those are two markets with some of the highest inventories of unsold properties in the country.

Now I will admit to having very firm preferences of my own, but that comes from having lived almost everywhere in the States. Seriously. Boston, Connecticut, south-central Pennsylvania, the suburbs of Washington DC, Baltimore, Savannah [Georgia], Michigan, Texas, San Diego, LA. OK, I’m starting to appal myself.

I have also holidayed in Orlando and Captiva in Florida, Hilton Head in South Carolina, Philadelphia, Chicago [seriously!], Manhattan, Atlantic City and Cape May in New Jersey, and, well, to hell with it, let’s stop there and just assume I’ve made my point.

If you’re planning on spending any time at all in your American property, then it really is important to have – even above and beyond the numbers - a sense of the place. The world of difference between, say, a New England village and a city like Los Angeles goes far beyond the obvious disparities of geography and size. It would be more akin to the contrast between a retreat in the Cotswolds and Ankara.

While you will most certainly be plied with sterling numbers and avowals of profitability, you will also meet with naïve assumptions of your thorough familiarity with a property’s neighbourhood, mores and culinary heritage.

My suggestion is to spend as much time learning about the above as possible, even if you’ve actually visited, and fallen in love with, the place. At the very least read the local newspaper, especially the adverts [if you find an abundance for bail bondsmen, cheque cashing services and furniture rental emporia, then you know you’re in the wrong place, or at least in the dodgy end of Savannah or San Diego. Or, frankly, in an increasingly large portion of the American panorama.].

Depending on your fancy, you may wish to see if there’s a library in town or a non-franchised “Irish” pub, a ban on outdoor smoking and/or drinking on the beach [seriously], more houses of worship than restaurants and criteria of similar ilk.

As for me, it would be a very old stone cottage set in the rolling, smoky hills of Connecticut, but, then again, I came back to Ireland.

19 November 2007

caveat emptor, really

A bargain hunter’s paradise. The best investment in the globalised universe. The perfect parking place for those SSIA monies.

Or so we’re being told. At least by the glossy adverts for Manhattan penthouses and Florida condos. The endless round of overseas exhibitions flogging far-flung enclaves for the rich and not so famous.

But the truth is there really are incredible deals to be had, and they get more and more incredible every day as the dollar sinks ever lower to our fair euro. Unfortunately, for every honourable estate agent [no, not quite always an oxymoron] there are an abundance of fly by night scam artists, and for every profitable venture there is a property supplement or ten worth of shoddy, overpriced “villas.”

I am neither estate agent nor shill, but rather someone who knows the US market intimately. My hope is that I can help provide prospective buyers with important links, sound advice, reputable resources and even, occasionally, something exciting that won’t be found in those corporate supplements or exhibitions.