Brokers who earn their stripes over time tend to have legends accumulate around them, similar to others who have accomplished something extraordinary in their lives. Yet, curiously, for these intermediaries, their “legend” is their anonymity; success stories are whispered in close circles rather than in the open media.
It is not their track record of units sold that do the talking, but rather the discipline that they bring into the process. The client walks away with the accolades and trumps the monies made while the broker sits quietly in the background away from the limelight, satisfied being away from the limelight. This is especially true in the age of social media where every deal is trumpeted across platforms. But the truly successful broker knows that the limelight always belongs to the client.
Investing is a thinking game. It is not a physical challenge, but rather a worldview imposed onto the landscape. It is a combination of temperament, experience and reactions of others that equips the person to identify and offer a series of deals curated to the individual client. It is a step away from the herd, and is part of the mental mosaic that forms the fundamental principles of the person.
This is why, curiously, despite the rise of technological disintermediation and that of discount brokerage houses, commissions have actually risen. But they are not available for all. Rather, these bespoke commissions on offer are for those who bring into the equation what Warren Buffett famously calls the ‘Money Mind’ into the equation. Regardless of ticket-size, these outsized commissions have been available for a select few who have recognized the discipline of compounding money, and how difficult it is when prices are at elevated levels.
In a rapidly urbanizing city such as Dubai, where the emphasis has been on primary market sales, the middleman has always been incentivized to steer the buyer to these offerings. Many have even bought for themselves in periodic episodes of speculative frenzy. But it has been the secondary market where the broker has earned his accolades.
Still rife with selling options
Whether to identify a first- or second home or whether for investment purposes, the true middleman has always been the one able to marshal the investment philosophy in a manner that is cost-effective, value accretive and not easily accessible in terms of price. Once those variables are identified, the journey has only just begun because after that is the ‘waiting game’ - a discipline of patience that is required for wealth to accumulate. As interest rates rise for the first time in two decades, the new investment landscape almost certainly assures a moderating price curvature and a more restrained appetite for mortgages.
Yet, for the middlemen these represent opportunities, rather than hurdles. For the investor looking to delegate, a number of principles have been thrown about by advisors in terms of what qualities to look for. The ‘Money Mind’ mindset only looks for one - identify a broker who already has invested in a property for the long-term rather than churn purposes. This attribute alone, will whittle down the list of prospective candidates to a handful of skilled professionals.
Inherent to the deal
A survey conducted showed that more than 90 per cent of prospective buyers turned to the internet for their next property purchase. There is no doubt about the role of technology. Curiously, the principles of investing have eroded as the ‘churn and burn’ model have taken root.
Looking at Land Department data, the outsized commissions paid have not only been through the technology platform, nor have they been exclusive to the high-ticket items. Rather, there has been a concentration among a select few individual entities in the secondary market, which have chosen to keep their successes quiet. German-born philosopher Dietrich Dorner describes the damaging patterns of thought that bedevil modern society in his book ‘The Logic of Failure’.
Failure develops gradually from its own logic. For the middleman as well as for the investor, the conclusions are clear: steering away from the herd is a pitfall few can avoid. But they do exist and they walk among us. Selecting the middleman therefore is as critical (if not more) than the asset itself.