Suppose I Sell – then What?

Estate agents in Berlin all seem to face the same issue at the moment: While there is any number of prospects eager to buy, few owners wish to part with their apartment blocks. It is one of the reasons explaining the price hikes. Yet many estate agents have failed to shift their approach: They mainly continue to explain why buying property in Berlin is a good idea. It is a story they tell well, because they have spieled it for many years.
To be sure, it has not always been easy to cite convincing arguments in this context. On the one hand, however, direct real estate investments have become “the thing to do,” while, on the other hand, the arguments in favour of investing in Berlin have made the rounds.
But what is an estate agent supposed to tell the owner of an apartment block who might sell but wants to know first: “Okay, suppose I sell – then what? What am I supposed to do with the money?” Perhaps the estate agent will be able to offer him an apartment block in a Berlin district or in a building age category that has not experienced major price hikes yet. But as often as not, no such property will be on hand.
So what is he going to reply in answer to the question “Suppose I sell – then what?” After all, people wish to invest their money in real estate these days, and so they should. The interest returned by Federal bonds is so low as to undercut the inflation rate. Equities are too fickle for many, and bullion has already become too pricy, at least in the eyes of many. Which leaves real estate – especially given the historically low interest rates – the investment of choice. If this is so, why would you want to sell? To be left sitting on a big bag of cash and wonder where and how best to invest it?
Agents are agents. Selling real estate is what they do. But most of them sell real estate only in their hometown and place of business. The thing is, there are many cities in Germany that have not yet moved into the focus of domestic and international investors, and where real estate prices have not been quite as fast to rise. With all these buyers concentrating on the major metropolises where prices have soared, are buying opportunities not likely to be much better in cities that more or less ignored – so-called Grade B locations?
Why, for instance, would a Berliner not buy in Hanover? The answer being: Of course, most people understandably prefer to buy in their hometown where they know their way around and are better positioned to appraise a given location.
This is an aspect where estate agents should provide a better service: They ought to collaborate and enter into joint ventures with estate agents in other cities. They should offer well prepared market information that will make the market for apartment blocks in another city more transparent to the reader. They should also organise briefings together with good estate agents from other cities.
Only an agent who gives a plausible answer to the question of “Suppose I sell – then what?” will turn property owners in Berlin who could make a profit by selling now from potential leads into actual sellers. Finding buyers in the next step will be much easier, given the many arguments that speak in favour of Germany’s capital.
In short, estate agents need to reshuffle their arguments. The story they have learned to recite by heart (“This is the time to buy in Berlin”) has outlived its usefulness on a market where a shortage of buyers has given way to a scarcity of sellers.