It was exactly one year ago.
I had decided to buy a house in Sarajevo, and it wasn’t going well.
First, this is an extremely difficult real estate market, and most people prefer apartments.
Very few houses come on the market, and most are not in good condition. So you can spend weeks or months searching the online ads without finding anything even worth looking at.
Second, we finally found a place that we liked. But the owner was lying to us.
It was in a quiet, historic neighborhood overlooking the city, with amazing views. It had a beautiful entrance and a small, enclosed, internal garden.
My wife and I loved the place, but there were some problems with it, including a moisture and mildew problem on the first floor.
The main problem, though, was that the owner was impossible to negotiate with. And far more seriously, he had lied to us systematically over a period of six weeks.
It wasn’t just one untruth that he told us. It was an entire series of lies, which he later admitted to be untrue, one by one. He also broke his written agreement with his real estate agent.
The most serious issue, which he admitted in the end, is that part of the house was illegally constructed and needed to be “legalized.” This created all sorts of problems and left a question mark hanging over the entire property.
In the end, after wasting six weeks of my time on this, I just needed to walk away from the deal. I had a crushing amount of work to do, and couldn’t spend any more time on it.
Above all, you just can’t do business with someone who lies to you, so I was forced to give up.
Another Door Opens
A few days after officially giving up, my wife received a telephone call from a real estate agent we had met earlier.
The real estate agent told us that a new house was coming on the market in the same neighborhood we liked.
No one else had even seen this house, and she set up a showing for us immediately.
After the last experience, I wondered, Should I even get my hopes up? I didn’t know, but there was no harm in taking a look.
When we saw the house, we liked it immediately. It was in a great location, in excellent condition, had three floors, and an even better view of the Sarajevo skyline than the other house.
It was much larger and also less expensive than the other place. In fact, it was better in nearly every way. And compared to other properties in Sarajevo, it was a bargain.
We made an offer that was accepted (pending inspections), and I had my assistant Maja schedule inspections immediately, and also check the legal paperwork for the house.
That was finished within 48 hours, and everything checked out perfectly.
Now came the moment of truth . . .
The real estate agent asked me to make a 10 percent non-refundable cash deposit on the property!
Once I made the deposit, she would take the property off the market, and it would be ours alone.
To Trust Again?
Of course, nothing like this would happen in the United States.
Yes, deposits are required, but they are held in escrow accounts, by a third party, until the actual sale takes place. You just don’t hand a pile of money to a real estate agent and hope for the best. But then again, this was Bosnia.
It was a bit confusing. I don’t remember the exact details, but she told us that if the deal didn’t go through, we would receive twice the amount of our deposit back from the owner!
Of course, that sounded a bit dubious. But we were on the fast track to buying a house that no one else had ever seen — or even would be able to see, if I went ahead with the deposit.
While a sale in the United States can take six weeks to close, we were in a position to own the house in only one week.
So, what should I do? Should I feel comfortable handing over $10,000 to a real estate agent, after being lied to consistently for six weeks by someone else — and also having a bad landlord who broke a lease with us?
In the end, I decided to trust again. I signed on the dotted line, headed to the bank, and handed over the money.
As we arrived at the bank, across from the Cathedral in Sarajevo, there were some teenagers standing out front with signs advertising “FREE HUGS!” (see photo above).
I felt like having a free hug, but only took a photo instead.
In the end, while I had sweaty palms, I decided that the real estate agents were not going to take the money, leave the country, and never be seen again.
My reasoning behind this is that they had a very successful real estate practice they would not place in danger for that amount of money.
In fact, there was something extremely unique about these real estate agents, which separated them from every other real estate agent we had met in Sarajevo.
Everyone else in Sarajevo was struggling for business. But this was not true of Elmedina and Meho of Luxuri & Partneri.
In fact, every time we saw them, their mobile phones were constantly ringing. It was amazing. They were clearly movers and shakers who loved their work. And they had the business everyone else seemed to lack.
They were professional and efficient. They wanted to make deals, close deals, and move on to the next deal.
They would never want to endanger the vast amount of business they were transacting, which set them apart from everyone else.
So I said, “Yes, let’s go to the bank, and I’ll give you the deposit.”
Everything then happened very quickly, and we assumed ownership of the house the following week.
After that, we had reason to celebrate. So I threw a small dinner party at a beautiful restaurant, high in the hills overlooking Sarajevo.
We invited everyone who helped us while we were buying the house: the real estate agents, my assistant and her family, and our baby sitter.
I had learned to trust again, and we ended up getting a beautiful home in the process.
- How to Live Like a Foreign Ambassador for Less than $30,000 a Year [the Secret of Geoarbitrage]. Explains how to save money by living overseas and how I bought the house described in this article at a 20% discount because of the fall of the euro against the United States dollar.
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