Correct valuation, transparency and double fees come under scrutiny at Realty

Newsroom 02/11/2009 | 15:21

But now brokers are seeing more clients looking to cut costs at the expense of quality. “We lost a valuation project to a company that not long ago used to do transactions with old residential units, which had no experience in valuation,” said Grigore. “Too many people have got a pat on the back from valuers in the past, but the valuer must criticize the project if necessary, and say if the value has gone down. Many valuers have been told by their clients that they need a certain figure to get their loan, which shouldn't happen anymore,” commented Andrew Pierson, MRICS and country manager with King Sturge in Bulgaria. When it comes to ethics in local real estate, Tim Wilkinson, joint managing director of DTZ Echinox, said there were few opportunities to learn such a moral code in Romania. “The main problem of unethical behavior in the local market has stemmed from a combination of the lack of available real estate education and short-term greed to close transactions in any way possible. Such behavior tends to come from a minority but impacts the majority by dragging the property industry's image down,” Wilkinson remarked. Despite the competition between real estate agencies on the market, they should share certain information and even research on occasions. “Much about ethics is based on greater transparency,” said Wilkinson. Sometimes agencies give different market values, which confuses the client, who will choose to do what he thinks best, said Radu Lucianu, managing director of CBRE Eurisko Romania. As for the phenomenon of double fees (where the agency gets a fee both from the seller or landlord and from the buyer or tenant), which still goes on in Romania, real estate brokers say this practice was common in the first days of real estate activity in the country. “We also did it in the early years, but CBRE doesn't do it,” confirmed Lucianu.

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