Anti-Bankruptcy Measure

The real estate agencies have taken an illogical decision: they increased their fees to cover the lack of customers. The realtors go bankrupt one by one, and those who resist have taken into consideration rentals, interior design, or moving. The paradox is that, although they do not sell anything, they will increase their commissions because "the properties are more difficult to sell".

More and more real estate agencies go bankrupt as a result of the crisis that has blocked the real estate market. After the little agencies disappeared one after another, the larger companies affiliated to the Romanian Association of the Real Estate Agencies (ARAI) started to have problems. "In the last six months, 10-15 real estate agencies members of ARAI have suspended their activity. The other members, due to no sales, started to take into consideration rentals, consultancy and even property management, interior design, moving, or cleaning", said Ruxandra Cleciu, the President of ARAI. The percentage is quite alarming and it represents 10% of the total 160 members of the association throughout the country.

LACK OF MONEY
The market is blocked because the banks no longer grant loans. "The problem is the lack of funding. The banks say they grant credits, but, in reality, they do not grant any mortgage loans. Also, the property assessments made by the banks result into values half the ones at the peak of last year for the old apartments, while the one for the new apartments are 15% lower compared to the price list", Cleciu said.

On the other hand, the bankers are complaining that the people are scared of the financial crisis, about the possibility to remain unemployed and postpone the decision to purchase a house. Those who have cash do not hurry to buy either as they expect the prices to fall further. The ARAI representatives consider that the old houses' prices will continue to decrease, but not to the values speculated on the market: 8000 dollars for an apartment. As far as the new houses are concerned, the realtors believe that the developers "have already done a lot effort", but they cannot go below the cost.

HIGHER FEES
The real estate agencies' decision to increase the fees could send away their few remaining customers. But the low number of property transactions completed in the recent months could lead to the increase in the fees charged by the real-estate agents, said the secretary general of ARAI, Carmen Mihaita.

"There is no reason for the fees to decrease. The conditions under which a property is sold are more difficult so it is normal for the commissions to increase. The real estate agents have more work to do in order to sell a property", said Mihaita. Now, the data on the market say the commissions of the real-estate agencies reach 3%, which is applied to the seller as well as to the buyer.