Alex Mackay of Mishon Mackay takes a look at what makes the property market go round.
When Michael Douglas as Gordon Gecko in the 1980s film, Wall Street, said, “Greed is good” it seemed a rather shocking statement.
Well, greed is rather good in property. Greed works. Greed – or to put it more gently, ambition – fires the market. It is people’s ambition, however humble or grand, that makes them seek new homes for themselves, their families, their jobs, their asset bases, their pets, their toys, their lifestyles or their statuses. It was ever thus.
But ambition also maintains the status quo. The ambition of a purchaser to buy a property for as little as possible keeps in check the ambition for a seller to achieve as much as possible. In this respect greed works because it forces realism into the market and provides a platform for deals that are acceptable to all sides – albeit sometimes grudgingly. In a way the friction of conflicting greed provides the heat that ultimately forges market value.
The trouble comes when one side is more ambitious than the other – a little too greedy than is good. Greed tempered by reason is one thing. Blind greed is quite another. An unrealistic offer is as useless as an exorbitant asking price. Both get nowhere.
This is a time of greatly conflicting property market reports. Some commentators say that prices are still going down – great for buyers – while some say prices are creeping up – great for sellers. All, somehow, blame the current economic conditions. But they miss the real point.
Despite the Greek, Spanish and Italian fiscal precipice, the Euro Zone conjecture, the lack of discernible growth in the UK, the ambiguous US economy, the Arab Spring, the booming London luxury property market, global trade protectionism, the drought, the wet weather, the Olympics or the Duchess of Cambridge’s wellies, if a purchaser makes a reasonable offer, and a reasonable seller accepts it, both will achieve their ambitions – even in this market and despite what else is going on in the world. That is the point.
On the face of it an estate agent’s job is to sell property. In reality it is to manage the expectations and ambitions of buyers and sellers – reasonable or otherwise – to achieve agreeable results for both sides. After all without that no one is going anywhere – however ambitious he or she is!