The Market Price

I've known David for a few years. He's not a careless man. Quite the opposite: he researches, compares, checks. When he decided to invest in Bucharest, he did it after six months of thinking. He read articles, talked to people who had already done it, and visited the area several times before he signed. He was in no hurry.

He sent me a link on WhatsApp, with one sentence:

"Look. That's the market price."

I opened the link. The Romanian listings site, imobiliare.ro, the local equivalent of Israel's Yad2. Three apartments in the area, all priced close to what David was asking. He was sure he had settled the argument.

I told him: "Give me a minute."

The apartment was in a decent neighborhood. Not the city center, not the outskirts. The kind of place people look for because it's accessible, quiet and not too expensive. When he bought, the market was rising. The logic sounded right.

He did what the locals here call an "Israeli renovation." I didn't make that up; it's the locals' term. What it means: do the bare minimum needed for a tenant to move in. Paint the walls, new laminate flooring that looks decent, an IKEA kitchen that works. Not a renovation that raises the value of the property, a renovation that lets you rent it out.

He found a tenant, collected rent, and did the math in his head. A few years down the road, exit. The profit was obvious. Of course.

Now the moment had come.

He came to me with the price he wanted to get and asked me to find him a buyer. I heard the number, and immediately my old habit kicked in: open a window and check what's happening in the market.

I took his details. Size, floor, neighborhood, condition. And I checked what was available on the open market at the same price.

I found fully renovated apartments. I found relatively new projects with parking. I found properties with a clear history and proper documentation. All in a price range not far from what David was asking.

I knew I couldn't recommend that my client buy from him.

I told him so, eye to eye. Not harshly, not as criticism, simply as a fact. "David, at this price I can offer my clients better options. I won't be able to promote your apartment."

He didn't like that.

"How can you say the price is wrong," he asked, "when there are three apartments with similar specs in the same neighborhood at the same price?"

And then he sent me the link.

I opened it. I checked the first listing and clicked on the date. Four months. I opened the second: five months. The third: three months.

Three apartments. Three people holding on stubbornly. Three listings that weren't moving.

"David," I said, "look at the dates."

A short silence.

"They want more than the market is willing to pay. And you see them as proof that your price is right. But they're not proof. They're a precedent showing that at this price, the apartment just sits there."

He wasn't convinced. "They sold cheap," he said about the closed deals I showed him. "I don't have to sell cheap."

Absolutely true. He doesn't have to.

He went to an agent. One who didn't ask questions, who listed it at whatever price he asked, who promised to try. The listing went live. A week, a month, two months. I know because every now and then I go through the listings and see apartments I recognize.

David's listing is still there.

In the end, one of two things happens. Either the price comes down, slowly and painfully, after six months on the shelf, to something the local market is willing to pay. Then the deal moves. Or another Israeli comes along. Someone who didn't check closed deals, who trusted the seller because they speak the same language, because there's a feeling of "he's one of us." And then the deal closes close to the asking price.

An Israeli selling to an Israeli.

I'm not judging it. I'm describing it.

The problem isn't that David is greedy. He isn't. The problem is that he measured the "market price" by what others are asking, not by what actually closes. In real estate, and in life in general, the gap between the asking price and the closing price is sometimes small. And sometimes it's six months on the shelf.

If you're thinking of selling a property you bought abroad, before you set a price, don't just check what people are asking. Check when the listing went up. Check what actually closed. Those two questions are worth more to you than any appraisal.