Brokerage Global
Last week I traveled to London, Paris, and Geneva to meet with residential agents affiliated with Warburg’s international partner, Barnes. I was struck by both how very different and how very similar the brokerage business remains as one travels from country to country.
During my meeting on Tuesday with our London partners, the executive with whom we were meeting couldn’t put down his mobile phone. When I asked him what was going on, he explained that he had just made a deal on a large house and that, after the price was agreed, a Russian buyer came into the picture and offered more. He was (he used the term although I had believed it was exclusively American) gezumped! So his buyer raised his offer the requisite 50,000 pounds, less than 1% of the agreed on price of 6 million, and the Russians gezumped him again! Luckily this time our partner was able to persuade the seller that he had given his word not once but twice, and that he might well end up losing both buyers if he wasn’t careful. The seller signed with our guy.
In Paris, where I was midweek, this cannot happen. There is no gezumping, and no overbidding either. The French system is more orderly, with the asking price serving as the upper limit to what buyers can offer, and the seller being obligated to accept a full price offer. The offer and acceptance are memorialized in writing immediately so no other bidder can upset the deal. Prices in New York and Paris seem roughly equivalent, while London still costs a bit more. But the French apartments, even those selling in top location for 7 or 8 million euros, tend to offer very low monthly fees but minimal service. A concierge is usually on site and available during business hours to receive enquiries or packages, but they offer nothing else. They don’t unload, they don’t carry, they don’t announce visitors: it is altogether a different system than that to which New Yorkers in doorman buildings are accustomed.
Interestingly the Parisians don’t stage their listings, regardless of condition, to make them look fresher and more up to date. For a city which is all about chic, a number of the properties I viewed were in poor condition but lacked even rudimentary attempts to make them look attractive, even for prices of 4 or 5 million euros. Several were empty, needed painting, had extremely soiled carpets – there was a lack of focus on presentation which we in the U.S. cannot get away with anymore.
In Geneva, foreigners cannot buy unless they commit to permanent residency. So it is not as much of an investor market, since French, Chinese, American, and Russian buyers cannot invest here unless they declare Swiss residency. Many do, even though the tax laws today are not as favorable as they once were, and the cost of living is extremely high. (According to a young university student with whom we spoke, Geneva and Lausanne sell the most expensive Big Macs in the world, costing more than twice as much as those in Paris!) STILL, the Swiss franc is a strong currency (a Swiss franc and a dollar are roughly 1:1), there are no immigration problems, and the government is stable; it’s an attractive spot for international citizens to settle. And the real estate shows it: we saw one villa overlooking the lake asking 20 million francs, and a grand but tired 3-bedroom apartment with very large public rooms in the elegant “old city,” which is gorgeous, asking 11 million. Not for the faint of heart!
The agents we met in every city made me proud to be a broker. Knowledgeable, intelligent, and insightful, they comprised an impressive group of professionals full of local knowledge and dedicated to client service. Plus, they all love what they do, as do I; several expressed to me the excitement of each day bringing new challenges and opportunities, all over the city, with buyers and sellers from all over the world. No wonder our profession has one of the highest comparative job satisfaction ratings of any line of work, no matter where you do it.