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The perils of selling international property

publication date: Oct 28, 2008
author/source: Andrew Potter
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andrew potterAndrew Potter, former head of Hunters Overseas Homes Network has issued a warning to estate agents looking to boost their income streams by selling international property. 

Andrew says, “In these extraordinary times, it is not surprising that agents are looking to boost income by diversification, but be careful!” 

Andrew has been selling international property since 2000, and has only recently returned to the UK having worked in Spain, Bulgaria and Turkey. He also works in a number of other countries including Portugal, Southern Cyprus, Panama, Brazil, US, Australia and Thailand. 

The most common mistakes agents make, according to Andrew is not doing their homework on the developer or intermediary agent before they start selling to their clients. A recent poll of his clients found that almost all (97%) said that the only reason that they made the decision to buy overseas was the reputation of the UK agent. 

Andrew says, “When things go wrong, who do you think the client is going to turn to?” 

Therefore it is imperative that the relationship you have with your international partner is open and honest. Andrew has also noticed that there is a clear correlation between getting paid on time and how professionally your international partner treats your clients. 

Andrew’s first experience of having problems in receiving payment was in Bulgaria. He recalls “We had sold quite a bit of property in Sunny Beach for one developer; their head office was in Sofia. I was told to send the commission invoices to that office.” Andrew emailed the invoices, after a few days he followed up, only to be told that is was the wrong kind of invoice and that he had to get a “factura book” from the local stationers and that the invoices should be in Bulgarian. Andrew continues, 

“Of course I should have checked first, but for a few Levas and thanks to a Bulgarian colleague I got the right book and translation.” 

He was then told to post the invoice to the head office. Andrew said, “I don’t care what anyone says about the Royal Mail in the UK, unless you have experienced other countries’ postal service, you will not know how lucky we are here!” He decided that he would deliver the invoices, which totalled many thousands of Euros, by hand. From Sunny Beach to Sofia is a seven hour car round trip. 

Having turned up at office with his invoices - in Bulgarian and using the correct forms - he was told that he needed to sign each one in Bulgarian! Andrew said,

“As it happened I was taking Bulgarian lessons. After learning the Cyrillic alphabet the next thing is to know how to write your name, so it was not a problem, of course this was just stalling and the whole relationship which had been professional up until this moment was destroyed”. After much hassle Andrew finally got his payment. 

So what tips does Andrew offer for agents looking to going into International sales? 
1) Ask the developer or intermediary agent who else they are dealing with and get at least one reference. 
2) Make sure your agreement is in both the local language and in English. 
3) Make sure the terms of payment of your commission are clear and that there is no room for misunderstanding. 
4) Make sure you know what the process is for sending invoices, language and process before you start selling. 
5) By law, you have the right to charge interest on any outstanding commission payments as long as you are dealing within another EU country. 

Finally, make sure that the developer is who they say they are. It is amazing how many intermediary agents or master agents are out there. Are you genuinely dealing with the developer or is the commission coming through another party? Don’t forget, if you are not dealing directly with the developer, they have no obligation to pay you. The contract the developer has will be with the intermediary agent only. 

Ultimately, selling international property can be a profitable addition to the services you offer your clients, but a few simple steps now could alleviate a great deal of hassle later on. Andrew says, “I have dealt with many developers and intermediary agents over the years, most are very professional but some can cause you problems. The trick is to know which is which”. 

Andrew Potter is a member of National Association of Estate Agents (Overseas) and offers advice and support to estate agents and developers worldwide. 

Contact details: 
Telephone 0844 330 2512 
Mobile 0791 746 1962