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Insatiable greed for property profits

Going round the forums over the last several months, and with experts now saying in the media that buyers are starting to look again at buying oversea homes, plus talk of house prices bouncing back in the UK,  I wonder if anything will change in the future in the property market.

Will the insatiable greed for profit from property abate and have we learned any lessons from this massive crisis regarding credit (debt)?

Looking at human nature, it seems unlikely. Will we ever take responsibility for our personal spending? We should learn from the mistakes that have lead to a global credit crisis which has left so many individuals in deep debt. But the more you consider what happened, the more you wonder.

Acquire more at all costs has been the order of the day.

Was it greedy developers, agents, vendors or greedy buyers which kicked the whole thing off? Well, it doesn't really matter. The most important lesson is that it was ever continuing greed which escalated personal debt to today's horrific level.

We did an article on profligacy : something which you don't see amongst Bulgarians, who are the least reliant on credit and the most thrifty of people. However, in many western countries many came to believe that it was a 'right' to have whatever credit you wanted and have as much as you could get. Everything was bought on credit... and this spilled over into overseas property.

Cheap and quick mortgages allowed people to buy property, extend themselves way beyond their means, believing the property would end up as their 'pension'. Then, the bubble burst. The dream turned to nightmare, although not for all.

Reading the forums you would believe that it is entirely down to dishonest agents and rogue developers, wanting to make money out of buyers at every turn. In reality, there are far more greedy and profligate purchasers.

The problem is that those who exercised financial caution and did things right keep quiet, so you don't get to hear about this. The dream did not turn sour for everyone. In our survey, we found that the huge majority (nearly 90%) had an excellent or very good experience of buying in Bulgaria, belying all the moaning and groaning. These are most likely those who didn't over extend their credit and bought in the right place for the right reasons. They weren't looking to make a quick buck.

The other thing which seems to have been completely missed on the forums and in the press, is the effort which some developers are making... helping buyers transfer to existing completed projects, upgraded properties, delayed or split payments. Along with agents, who have often drastically cut their commission levels and will cut them further to ensure the deal goes ahead. They are also trying to convince vendors that often their prices are unrealistic in today's new age.

Yes, there were developers out there to make as much as possible, probably too much, but in reality they couldn't build the projects quick enough as it was the buyers plungeing in recklessly to desperately buy pretty much anything available. Yes, some agents took outrageous fees but how many buyers checked - and, indeed, did they care?

Now, the greed continues.

Some buyers, who have now become vendors as they endeavour to resell, are feeling that a profit of 20,000 euros is not enough, it should be 40,000 or 50,000 euros. They somehow think that this is a loss which they cannot accept! On top of this, they are also complaining about the agent not being interested in selling their property. Yet, they have not recognised that it is their greed (again) which is now leading to market stagnation because they won't reduce their price to a realistic level.

We all need to stop looking for that 'quick buck' and look long term at overseas property, buying the right home in the right place, of the right quality, for the right reasons.

As the Italian proverb says, 'big mouthfuls often choke'. Don't rely on getting rich quick, concentrate on the fundamentals of your property buying decision.

Buyers must verify that the property ticks all the boxes, not over extend themselves financially, get proper answers to questions and undertake due diligence. If it all turns bad, there will have been either one key question you didn't ask or a major consideration you overlooked - and there is only one person to blame.