Guest Feature: Distressed Sales

Written by Mr. Favour Afolabi 

Viva Real Estate

Last week, there was some pandemonium in our industry - someone advertised "4400sqms on Cameron Road Ikoyi for N500m!" 

As expected, the phone networks went haywire - everyone wanted to do the deal - and of course, I got a number of calls asking me "do you know the owner?" Well, my response was simple "I am not interested!"

This brings to me this subject of "Agents and their addiction to Distressed Sales" - I have never for the life of me understood why anyone "would come to the marketplace calling what he wants to sell - Distressed?" Just as I have never understood why "intending Buyers would seek distressed sales?"

I hear it is because they want a 'good deal' so does that mean if you sell or buy a non-distressed sale you've done 'a bad deal?' Could it be that all the normal deals we do on a daily basis are 'bad deals?'

Well, I have a theory here - a lot of our fellow agents despise the valuations on the properties we sell especially in the Ikoyi/VI/Lekki/Privileged neighbourhoods. Many agents are actually unable to fathom why these expensive prices since they can't imagine using their own personal monies (if they can have it) to buy such properties - so if you don't believe in the price/valuation of an item, what makes you feel you'll ever be able to sell it successfully? It doesn't work logically; or spiritually! 

This is the reason why some agents are specialists at beating down the prices of properties - even more than intending buyers are - so many agents have a terrible reputation of never actually closing any deals with you after they make enquiries of properties; collect documents and surveys; there is a major problem faced by the larger industry when we have agents who go about suggesting to buyers they can get cheaper prices in the same neighbourhoods that have relatively defined valuations - these agents make those of us that believe in these fundamentals look as though we were thieves.

That is the ONLY reason anyone would be trying to offer 4400sqms in a medium density zone in Ikoyi for N500m - because such persons believe valuations of N1.2bn for 4400sqms in the same place is criminal and that he must be the SuperMan that would save the industry from those trying to reap off the market - it is the reason, agents would be willing to sell plots being cut out of larger plots that have unusable shapes ‎to uninformed buyers because they are trying to help them achieve ridiculously lower valuations to what the market is offering all in a bid to make a cheap fee - behaving like typical hustlers!

Oga, if you can't sell lands in Ikoyi; or don't have faith for this big deals, simply go and sell N500,000 per Plot in Mowe or Ofada - a lot of people have become millionaires doing that - and you can join that elite league as well - stop demarketing assets in our business environs by going about seeking good deals and distressed sales for your own brand of clients - and that a bank or AMCON offers you a list of properties to sell doesn't automatically mean they are 'distressed sales' and even if you were told so, doesn't mean you should take such definitions to the market place.

And please, does it even mean when you add 'distressed' to a sale, you will sell it overnight? Doesn't most of these same properties end up being on the queues of unsold properties eventually? Please, let's help this industry grow; selling properties in prime neighbourhoods is never for the faint-hearted; and these valuations classify as oestantatious sales - they were never for people struggling to buy properties neither should we be begging people to buy such assets; the right people who understand these valuations are the ONLY people that end up buying and trading in such assets - and that always been the case - those who don't have the monies to buy are always the ones who claim that the country is hard; there is no money; accept lower prices while those that can afford these assets have always gone ahead to buy irrespective of the prevailing economic scenario in the country and the state of the rate of the Dollar to the Naira.

Many of our fellow agents don't even understand that the current high discrepancies between the Naira and the Dollar works in favor of doing more deals in our market - a lot more of those that have dollar deposit can actually now afford more properties thereby - there has never been a time that the generality of the people would tell you things are easy- it is always tough yet deals are always been done! Why don't you get yourself into the flow of closing deals rather than being a commentator?