BUYING/SELLING A PROPERTY, ALL YOU NEED TO KNOW
Buying or selling a property, all you need to know
1. HISTORY PROVED THAT REAL ESTATE IN LEBANON HAS ALWAYS BEEN A GREAT AND SAFE INVESTMENT:
Prices of lands in Lebanon never went down but reached a plateau in the worst case scenario for the following reasons:
a- Supply is low due to what is known in Lebanon “Scarcity of Lands”:
A large part of the lands in Lebanon (between 25 to 30 pct) belongs to أوقاف (religious institutions) and are not for sale.
A large part of the lands in Lebanon belong to Lebanese expatriates who left Lebanon decades ago and belongs to a large number of heirs, therefore almost none sell-able.
A large part of the lands in Lebanon are مشاعات belonging to the government and therefore cannot be sold for one cannot build on.
Basically less than 50% of the lands in Lebanon could potentially be for sale. That is why, even in recession times it is very difficult to find a good clean land in Lebanon that does not have technical or legal problems, at a good price!
There are almost no more good lands for sale in some districts like in Metn for example where it is saturated and sooner or later Lebanon is gone face a shortage of lands everywhere.
As for houses and apartments, the market is flooded but there is nothing decent, and the good ones are over-priced even in today’s recession time. Any seeker with experience will tell you how difficult it is to find a good quality apartment. How hard to find a property with a good quality/price ration.
b- Demand is high:
Following the near collapse of the worldwide once unbreakable Anglo-American economic system in 2008, no place in the world has become a safe investment and since then, many Lebanese abroad started to buy properties in Lebanon their native country, something that was not usual before the worldwide economy was hit. Lebanese diaspora and expats are 3 to 4 times bigger than local Lebanese (around 12 to 16 millions) and many of them still have roots in Lebanon or plan to buy a property in Lebanon.
N.B. The Lebanese economy proved to be immune to the worldwide economic system of the democratic world. This is not due to the superiority of the Lebanese economic system but rather to the under developed economic system which turned to our advantage in this instance.
The Lebanese expats in the Gulf area knows that their staying there is temporary and one day they have to move out and plan to have a safe haven house in Lebanon.
The security situation in Lebanon has become a regional one, even worldwide one, and therefore Lebanon is no less safe than any other country in the Middle-East. As a matter of fact, the security situation and security agencies in Lebanon proved to be better than all neighboring countries and Lebanon is safer from terrorists attacks than far away countries like in Europe.
Lebanon has always been the favorite tourist place for the Arabs of the gulf who love to have a piece of property in Lebanon. And who does not! Although this trend comes and goes due to the situation at times, but the trend is there and will eventually return as their population is growing, and they love لبنان for holiday and a house for summer. Lebanon is small and beautiful and the local Lebanese population provides a strong purchasing power.
The 3 purchasing powers of Lebanese expats mainly the ones in the Gulf, Arabs of the gulf and local Lebanese creates a large demand in a country where supply is so limited due to scarcity of lands.
c- Other factors:
Lebanon has oil and gaz. Sooner or later this is gone be exploited and the economy boosted.
Syria conflict shall end sooner or later. The reconstruction of Syria is gone cause a shortage of workers which shall increase construction cost and therefore inflate properties in Lebanon.
You can read my article entitled: “Buy When There Is Garbage In The Street”
2. FOR INVESTMENT PURPOSES WHAT IS THE BEST PLACE TO BUY A PROPERTY IN LEBANON?
a- Normal regions:
There are two types of regions in Lebanon where one can buy a land. Lands in some regions go up when the overall trend of real estate is coming up.
I call those regions ‘Normal Regions’.
b- Exceptional regions:
In some regions, some lands goes up, even when the overall market is at a standstill.
For instance prices in Dbaye zoomed up over the last few years while the overall market in Lebanon was at a standstill. I call such region ‘Exceptional Regions’. Today, there are few exceptional regions where in my opinion prices shall go up, even when the overall real estate market is at pause.
Jbeil and Jbeil district for instance is one of those. You can ask me why later.
1. WHAT YOU NEED TO KNOW ABOUT LANDS IN LEBANON
a. There is no perfect land:
There is nothing under heaven such as ‘a perfect land’ but there are good lands. Good lands in Lebanon are almost impossible to find or extremely over-priced. The key is to find a land that has a good quality/price ratio.
b. What makes a good land?
NICE PRICE! Nice area, nice location, nice neighborhood, none obstructable, nice slope, panoramic views etc …of course. But also a good land is a land that has clean and clear official documents with no technical or legal issues which is something not easy to find. Almost every land has a problem of some sort like no road access, high voltage over it, irregular shape, steep slope, views that can be blocked, low zoning, narrow street, bad neighborhood, old buildings around, legal issue etc… or a neighbor in an old building constantly hanging his old underwear to dry. Basically good lands are very hard to find and when they are on the market they go very quickly.
c. What makes a weak or strong potential buy?
Believe it or not 50 pct of transaction fall unexpectedly at the last phase, within 24 hours before the transaction is due, as the buyer, the seller or even the broker sometimes change his mind. From the moment the buyer and seller agree verbally, a kind of a war of nerves or poker game starts where everyone is tense, suspicious of everyone else and scared of making a mistake or being cheated. Adrenaline everywhere runs high. A weak potential land is when buyer, seller or broker are not 100% determined of their move or not sure of their information. As an agent myself, whenever I see a buyer or seller hesitating or sounding not trustworthy, I immediately pull out. For I don’t want my reputation to be negatively affected by someone else’s. When any party involved is hesitating and not 100 pct sure of his intention, I call the land a ‘Weak Land’. A weak land is also a land when several brokers are involved which opens the door for mistakes or dishonesty somewhere.
A ‘Strong potential or strong land’ is when buyer, seller and agent are professional and determined in their intentions and sounds trustworthy. And of course when official documents are clean and with no legal issues.
d. What kinds of land should I buy?
There are two kinds of lands:
‘SHORT TERM LANDS’: Lands that are in developed areas with the potential to move up quickly in price in a rising market, and therefore very liquid lands. i.e. Not difficult to resell on the short term if needed, i.e within the year.
‘LONG TERM LANDS’: Lands that are in area that are ‘under development’ which give it a great potential on the medium to long term. Slow at the beginning but eventually it will turn out to be a greater investment than a ‘‘SHORT TERM LANDS’ if one looking for a longer term investment.
e. How can I find a discounted land, a لقطة ?
This is a very peculiar term for usually what is a لقطة in someone’s eyes might not be so in someone else’s. Actually most people who are offering their land for sale will pretend that they are selling it because they are in desperate need of money…etc… But when you check the price of the land, it turns out not to be a لقطة at all. However, rarely, every now and then, a great opportunity arise, a real لقطة . Meaning offered at a price that is discounted by 25 to 30 pct. These lands are sold within days before they even hit the market as there are many well connected hunters around, waiting for such opportunities. A hunter has money ready and can hunt it within 12 hours… These lands are very difficult to get hold of, but occasionally, even beginners with a big heart manage to hunt a discounted land every now and then. But generally these are almost impossible to get. If one searches well, has a good agent, has vision and discernment, he could get a land discounted by 15 to 20 pct which is very good.
f. How to evaluate a land?
As an expert in the field, I have a pretty good idea of the value of a property I am assigned to market. But what I try to avoid is to evaluate a property when the owner asks me to. Usually a property owner is often emotional and irrational when it comes to market his precious property. Because of emotional attachment, it is very difficult for a property owner to make a rational evaluation. Also, he is often misguided by none professional advises of people around him. On the other hand, a bad agent will tend to under value a property they intend to market in order to increase their chances of success. Therefore I often advice property owners who are planning to sell their property, to have it evaluated independently by a professional sworn evaluator who has experience in the area where their property is, and who at the same time, is not a broker himself, in order to avoid conflict of interest. I advise them to have a formal proper written evaluation which shall cost them around $ 250.
g. What makes a good or bad real estate agent?
Whenever someone hears about a ‘Simsar Aradi’ fears of being cheated or falling into the hands of a crook start rising in his whole being.
Sadly, and for a long period of time, most real estate transactions use to be done through individual real estate agents (Samasrit Aradi). Most of those Samasra do it as a second job and are not professional. Around 30% of Lebanese tries to work as real estate brokers, and that is around 1 million person. But those who are really involved range in the 10’s of thousands and are mainly, the local barber, the Moukhtar, the Baladiyeh people, the grocery shop owner and his brother, the butcher and his mother etc…Unfortunately, the majority of the 10’s of thousands of ‘Samasrit Aradi’ gave the real estate sector in Lebanon a very bad reputation not only for their none professionalism but mainly for their lack of integrity wanting to make a kill on every occasion. Those affected the most by the majority of none trustworthy agents are the few honest and professional agents that are trying to do their job in integrity and honesty. The good news is that the real estate market in Lebanon that has been running loose for a long time is starting to be regulated.
Today there is an active ‘Syndicate of Real Estate Agents’ working hard on changing the laws and the regulations and also the image of real estate agents. Applicants have to take a course and sign a strict ‘Code of Ethics’ vowing to work in integrity, always telling the truth and never to charge more than the legal 2.5 pct commission fee. Market awareness of the syndicate called “REAL’ is rising. In 2015, although ‘REAL’ agents are still around 150 members, 52 pct of all transaction were done through a ‘REAL’ agent. Out of the 10’s of thousands of samasras in Lebanon, 52 pct of all transaction were done through the 150 agents of the syndicate. We are working hard on changing mentalities and perceptions and one of my slogans is :
” Find one lie and pay zero pct commission”
This challenging commitment is a reminder to me in the first place that keeps me on my toes, making sure that every information I receive is true and accurate as I don’t want to fall victim of someone else’s lie. You as a seller or buyer need to find a real estate agent, and a good one, for 95% of transactions are done through real estate agents, why? Because you need someone who has certain legal knowledge, certain technical knowledge, knowledge of real market prices, certain investment and financing knowledge, certain banking knowledge, mainly on various housing loans, certain knowledge on various sale contracts, someone who knows how to find good properties and sell good properties, someone who knows how to retrieve all legal documents, someone who knows how to talk to clients inspiring trust and confidence, someone who is very knowledgeable of all social media tools and has good marketing skills, someone who has a lot of contacts and a good reputation and most of all someone who has wisdom and skills and capable of closing a deal etc.. Basically someone who knows and is of capable following the matter from the very beginning till the very last moment of registration. Some who tries to go direct without a broker end up finding themselves paying more and getting less than what they were hoping for, and often cheated by the other party.
N.B. The same way there are dishonest brokers, there are dishonest buyers and dishonest sellers, so honesty and integrity is the only way.
h. What are the official documents needed?
This is often a scary issue for some, but it is more simple than most people think and definitely very safe. Contrary to what most people believe, the administrative real estate system and documentation system in Lebanon is one of the most transparent and one of the safest in the world. It is not because we are good as Lebanese but because the system was established by the French before they left. Any person can have access to all the documents of any property at any time for just a small cost. Whether his property or someone else’s property. Everything is transparent. This very immaculate system is what protected the real estate market throughout the 20 years of civil war. No one lost a property even during the chaos of the civil war! Retrieving the official documents of a properties will take just few days and will cost around $100 only! The last document that is needed for registration called “ ” قيمة تأجيرية, takes around 10 days. But this document will be retrieved after the sale agreement is done at a notary public.
N.B. There is nothing wrong with our simple and safe system but what is wrong is with some crooks who makes people believe that it is complicated and unsafe. They do it in order to charge 7 to 8 times more! And often they take the money and don’t retrieve the documents or take 3 times longer. Since just few month ago, you can even check most of the documents of your property or any property online, for a tiny fee. $5 dollars of an إفادة عقارية for instance.
i. What are the main documents needed:
-A recent إفادة عقارية This documents will show who the owners are and the history of the land. i.e. Is it clean? Does it have any legal problems or إشارة? etc.. An Ifedeh Ikarieh is like a سجل عدلي"” of a person. (can be checked online)
-A recent إرتفاء وتخطيط This documents will show if there are any plans by the authorities to have a high way passing by the land or a ‘High voltage’ coming above it…etc..
-A map that will show she shape of the land, whether it is a nice shape or bizarre one. (can be checked online)
بيان مساحة- will show the exact surface of the land. i.e. how many square meters. (can be checked online if it figures on the إفادة عقارية)
-Title Deed , صك الملكية Green colored ownership deed.
-"رخصة إسكان " if the property is an apartment not a land.
-"نظام ملكية " if the property is an apartment not a land.
Once all documents have been checked the transaction could happen at a ‘Notary Public’ to be registered later at the صرايا الحكومة of the region. The agreement is concluded at a ‘Notary public’ and later on, around 10 days later, the registration process happens, once the last document is issued, the famous “ ” قيمة تأجيرية (You can check online if you have some pending Mellieh taxes due on the property)
The “ ” قيمة تأجيرية is retrieved after the sale agreement is signed and the document estimates the renting value of the property. From that renting valuation and through a certain equation, the accurate value of the property is estimated.
Registration fees amounts to 6 pct of the estimated value of the property.
j. What service do I offer for buyers and sellers?
WHAT I DO FOR BUYERS AND SELLERS
For buyers
I selectively choose to offer my clients 1 or 2 properties out of 10 or 15 that I visit. I hunt for the best opportunity. A property that I don't like I don't market. I don't market it just for the sake of it. Everyone's time is so precious to waste. I look for properties that have a good quality/price ratio.
Once I identify the right opportunities for my clients, I do the following:
a. I do my own research to find the real value of properties in the area.
b. I identify several factors in favor of the property & support my study with facts.
c. I retrieve all official documents to make sure they are legally in order.
d. I consult an architect to make sure there are no technical problems.
f. I put all my study in a detailed pdf presentation with photos illustration & JPEG
slides for whatsup & send it to my clients before any visitation is scheduled..
g. I send my clients few selectively chosen properties, and for those chosen by my
clients I will arrange for all visitations to occur on the same day.
h. Once a client makes up his decision, I help him through the process of negotiation & registration from beginning to end.
My strategy proved to be very helpful & efficient especially with those living outside Lebanon for I do 99% of the work for them.
For sellers
a. I do not pretend to know everything and all areas and therefore I only market those properties that I believe I can get somewhere with. I honestly give them my opinion in an objective way and support my study with facts.
b. I don't try to knock down the price of my clients property for I respect everyone's decision and each one's property is a precious thing. I try to be as transparent as possible to both parties & take the legal 2.5 pct form each side but if any party catch me with one lie I will charge him zero pct commission.
Exclusive Agreement:
I always try to convince my clients to market their property on a 3 month exclusive agreement. An exclusive agreement work better for both seller and agent for the following reasons:
The cost is the same for the seller whether using one agent or a multitude of agents.
-It will give me the boldness and the zeal to put all my weight behind selling the property.
-There will be just one mouth speaking on the behalf of the property according to the agreed terms and strategy. That will prevent other sources from saying wrong or inaccurate information whether out of ignorance or on purpose. Many agents invent all kinds of lies to the buyer in order to entice him. There is no limit to the kinds of lies and dramas they can come up with. With some so called brokers, once a client assign a property to them, the client falls into moving sands not knowing how to get out of. And if he tries to pull out, the broker will character assassinate him and his property by propagating all kinds of lies out of revenge, in order to prevent the property from being sold. I can tell you hundreds of stories if I had time.
-The seller risk to have his property badly marketed or either over exposed or under exposed.
-A sole agent can better market the property. For instance myself, I would like to prepare a good file with a large set of photos containing all details, including photos of neighborhood, street, building from outside, and even paying special advertising fees…etc. By being so precise and detailed, any person can get all the information online, get to the property and reach the owner. He will never tell the owner where he got the information from, pretending he knew about it from the concierge or the local grocery shop. The owner will never know that the potential client reached him through my hard work and efforts. If he knows he might be honest and pay me my dues, but he will never know. That is why any agent who do not have a property on an exclusive basis will be very shy in marketing the property. He will put a couple of photos of the inside of the property with a photo of the views making sure no one will discover the location..etc.. You might not be aware but 95 pct of potential buyers in Lebanon work hard on trying to bypass the agent.
-The seller will have to deal with just one person instead of several ones. Many agents are so talkative and pushy calling property owners daily for the silliest information. A good agent is wise enough not to bother a property owner unless the issue is important.
-When I market the property I start suggesting it privately to my clients, than market it online on some respectable sight like ‘Property finders’, ‘Linkedin where I have 11,500 members’, my face book page etc… Then I gradually move to market it on ‘OLX’ and similar pages. And if these steps do not generate a timely good response, I liaise with a couple of agents friends of mine.
Bottom line through one agent a seller can reach all potential clients after all.
Basically a good agent will cost the same but can do a better job.
I DO MY BEST PRAY FOR IT TO BE BLESSED & GOD WILL TAKE CARE OF THE REST
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SALES AND MARKTING
7ycould i contact you, if possible?