Foreign property sales get lost in translation
A good percentage of the real estate sales in Cyprus are concluded within the foreign market with an average of around 44% of total sales.
The percentage refers to the number of units and not on the value of properties sold. As such, bearing in mind that foreign sales are on the upper scale, the percentage is much higher.
Also, E.U. nationals are considered as locals, so if they are taken out of the equation, at the end of the day foreign buyers will be over 55% and in terms of value over 70% of the sum of total sales.
The foreign market, up to recently, comprised mainly of British and Russian buyers, but more recently over the last 34 years we have demand coming from the Chinese and other eastern/Asian countries, whereas developers, in their effort to expand sales, are promoting their product in countries such as India, Vietnam, Korea — markets unknown to us up to very recently.
Whereas there is a certain level of common understanding between Cypriots and Europeans and a slightly lesser one with Russian speakers (and we took some time to understand each other) in terms of the legal system, understanding the contract terms, as well as the common expenses law, with the more recent “arrivals” we are having problems both in the translation and understanding each other. So, there is an added difficulty in the meeting of minds here.
We have used translators in our correspondence and other communication, but Chinese and other languages not being a commonly spoken, we have ascertained after some time, that the translators translated whatever they felt like and offered properties other than those which we were offering.
In this way, the translators were getting at least 5% commission, as opposed to our own offer of 2%.
A large difference and a lucrative scam job (it may be only our experience since we understand it is not widespread).
Another problem that we have encountered, is the measurement system where some nationals are knowledgeable of the metric system others are not (being more familiar with the imperial system (and the quoted square metres are sometimes mistaken for square feet).
On one occasion our client was delighted to know that having a 200 sqm apartment was not 200 sq. feet (and this after we concluded the deal mind you). Imagine if it was the other way round?
Communication of minds is a major prerequisite for any buyers, but since in this case (real estate) we refer to relatively large investment capital, it becomes more important.
This becomes important when trying to open a bank account for money transfers to Cyprus and the newly introduced KYC and laundering of money investigation are most provocative and time-consuming for buyers.
This coupled with the personal data restrictions makes one wonder how a much sought after sales deal can be concluded.
In a recent case of ours regarding a sale in the Famagusta region (around EUR 400,000) to a Dutch potential buyer and having his loan application approved in a preliminary form, we are still waiting for the deal to go through by bank officials (delay of over 3 months). On another occasion, a Belgian millionaire sent his down payment for a deal of EUR 1 mln to a Cyprus bank.
The local bank informed us that this was a scam (transfer from HSBC bank).
A furious client objected to this and as a result, we duly received an apology from the bank, but we almost lost a sale.
If one adds to the “negotiations” the translation confusion, one can appreciate the problems that we are facing in the market.
Our Poseidon Gardens project that we manage with a Ukrainian client, had a communication malfunction that was however by-passed with the consumption of our local zivania and his vodka (with souvlaki to go).
Chinese clients are not necessarily influenced with food and drink and this makes life more difficult.
Communication of minds involve also personality clashes (even among the locals) and recent buyers from the foreign market have issues regarding “arrogance” — the higher the budget the bigger the problem on this count.
Some of the problems are created by the buyer’s advisors, such as lawyers who want to be part of the real estate sale so in addition to their legal fees, there is a hefty commission which they can claim from the seller (quite illegal mind you).
Regrettably, the money involved is huge making thirdparty involvement inevitable.
So, dear readers, do not get the impression that real estate sales are plain sailing in calm waters.