Recently around the office we've been talking about the differences between real estate business here and in other countries. For example, in Australia, there is no multiple listing service, you call the agent whose sign you see on the property and go see the house with that person. This is a huge hassle for the buyers who have to contact a number of different Realtors if they want to see what's for sale in a given area.
I noticed the same thing in Scotland a few years ago. There was a street of Realtors (although there they are called “estate agents”) and you shop for a house the way you would shop for a new suit, you go from agent to agent to see what they have, and when you find one that has something you'd like to try on, you go inside and make arrangements to go see the property.
I have noted this week that it's also just that way in Italy and also in Turkey.
And speaking of the way things are done differently in other countries, there was a story in the International edition of the Wall Street Journal that in Ireland the foreclosure rate is very low. The story went on to say that a mortgage in Ireland had more standing that in the US. In Ireland if your f you get a mortgage was foreclosed upon, whatever you owed was NOT forgiven, the bank took the house and billed you for the difference, even a bankruptcy—which in Ireland takes 5 years to execute—would not clear that debt.
So if you were unable or unwilling to make your home payments, you would lose your house and the bad credit you would incur would “dog” you for at least 5 years maybe more. In Ireland, this has resulted in people staying in homes in spite of the fact they are “underwater”. In other words, walking away from what appears to be a bad investment is not an option. I must say the Irish don't give mortgages to every Mike, Pat and Sean, so for all the people who have home mortgages, they actually qualified when they go them—and most put 20% down--that's different than here in the US too.
The other option that the Irish banks offer is a foreclosure with a rental back to the foreclosed family. The rationale is that there is no benefit to the bank to have an empty house, nor is there a benefit to the family to have to move. So they will—as I understand it—allow the family to return the deed, but stay in the house as a tenant. There was no information on how much the rent would be, but I would assume it would be less than the mortgage payment.
In Turkey, homes—and I mean nice homes--are selling in the $35,000 range along the Mediterranean Sea. The buyers are Germans and English—same as Florida. And of course the business elite and executives from Ankora and Istanbul as well. Of course the prices go up from there, but in Kusadasi $200,000 US will buy you a mansion.
Naturally in Istanbul, along the Bosphorus, homes on the water start in the million dollar range and run up to (the most expensive one sold last year) a whopping $140,000,000 US. But the cheap ones are still pretty nice, and the boats tied up out front are spectacular. So the prices vary and the laws vary, but a house is shelter and we all need at least a place to live.
That's what makes real estate (as a business) so interesting and—for me at least—so much fun.
Dane Hahn is a real estate professional practicing in NH and Florida. You can reach him at 941-681-0312. Or see him on the web at http://www.danesellsflorida.com/