Have you had any clients from Croatia purchasing luxury homes in New York? No, but I have worked with one Croatian lawyer. The big money comes from India and China, the Middle East, especially Israel and Dubai, and from South America. We used to have a lot of clients from Greece and Ireland, but that was ten years ago and it disappeared with the recession. It's the same with London; the money dried up after the Brexit vote. A lot of foreigners are choosing to buy homes in London instead of New York because the prices are lower due to Brexit, at least that's what they say.

What makes the New York market special?

To be a buyer in New York, you need to be well-off. Our real estate buyers are in the top 5 of the wealthiest people in the world. On Manhattan, one-bedroom apartments can reach $1 million, which means that if you buy it, you pay a mortgage, commissions, fees, and taxes, the apartment will cost you around $800,000 per year. That's not something everyone can afford. People who want to own a home in New York usually won't live there because they live in other parts of America. Most of our buyers are investors who invest hoping that the property will be worth more in the future. Of course, there is also a smaller number of people who buy homes and apartments as their first property for living.

In your conversation before the interview, you mentioned a 4% yield on real estate, but it doesn't seem a lot compared to other investments.

Actually, it's more than that. The 4% is just the rental yield. For example, if you buy a $1 million property, you pay $6,000 per month in rent, which is not unusual. That's $72,000 per year, of which $32,000 will go to taxes and maintenance, and you'll be left with $40,000 profit, which is 4%. But the New York real estate market is very speculative. If you sell that property in ten years for $2 million, after deducting $200,000 in fees, you'll have $800,000 in profit, which is $80,000 per year, or 8% yield. So, in total, it's 12%: 4% from the rental income, and 8% from the speculation. Plus, you need to add the tax deductions, around 1%. One of the reasons for the relatively low yields is that real estate is a secure investment; you can easily find subtenants so your property will never be empty. Since all the buildings have doormen and concierges, you can live in Croatia and own a home in New York without ever having to go there. Someone else will take care of your property. I once sold 12 properties to a client, a former lawyer from Hong Kong, without ever meeting her.

Croatia is a completely different market, small, with slow price adjustments, and over 90% of citizens own their own property. How can parallels be drawn?

If you want to increase sales, you need to educate potential buyers about the benefits of investing in real estate. It's not just a decision about housing, but it's the largest investment of your life. You can start a business, rent it out, or solve the problem of retirement when you sell the property for three times its original price. The fact that most people own their own property is astonishing, but it probably means that you don't move around much. In New York, you own a property for about six to seven years, your life changes, sometimes you need more space, sometimes less space.

What is it like to be a broker for luxury homes and apartments?

The headache is buying real estate, but it's a fun part of life, starting something new. That's what real estate agents do in New York, they're passionate about life. 50% of residential sales is logic: you look at the distance to school, work, how much time you'll spend commuting... The other part of the story is how sexy the property is. In a joke, I usually say that I help wealthy people find a better and more beautiful place to love, that's what I do. In their new home, they want to feel special, they expect to be happier. Will the home make them happier? No, but it will give them excitement. That's what we do. In one building where I sold an apartment, Chelsea Clinton lives there, and I actually sold her a property ten years ago. That building has a pool and a gym on the top floor where Chelsea Clinton works out every day from 6 to 7 pm. And in New York, everyone loves The Clintons; I love The Clintons too. So, I planned to bring the buyer in the evening; we come up in the lift to the top floor, and through the glass wall, you see the gym - she's there working out. The effect was: if the apartment is good enough for Chelsea Clinton, it's good enough for me. That's a small trick, but the secret is to infuse the property with special energy that will inspire the buyer.

How have technology and social media changed the rules of the game in the real estate market?

To be a successful agent, you need to work with many buyers, which takes a lot of time. Facebook is a trap, it doesn't really provide much information. Softwares like Perchwell, for example, allow us to present properties, even to the smallest detail, to buyers and filter which ones are best for their preferences. Facebook and Instagram are great for telling a story to a large number of people, but without details. LinkedIn is especially useful for us because our buyers, the "decision makers," spend less time on LinkedIn, but make more decisions. We use the most software in New York because that's where the most money is. It was much easier to work without technology; then we had all the control over the information, and today it's mostly in the hands of the buyers. That's better for the market as a whole because it provides greater transparency, but it's bad for our earnings (smiling). If the Croatian market is like that, where people don't move around much, a similar technology might help your market get moving.

What's crucial for a successful sale?

Photographs are the ones that create passion for the property. If a broker spends his time and money to hire a photographer to take good photographs, clients will rarely hesitate about the property, unlike when the photos are bad. The problem is that taking photos costs around $500, sometimes even $800, depending on the property. If a luxury property in Croatia costs around 1 million euros, and the broker's commission is between 2 and 3%, that's a negligible part of the commission. Don't forget that after selling the property, you'll show the same great photos to new buyers and create new business. My job has literally exploded in a positive way in the past 12 years because back then, few people were taking great photos, now everyone does. We also do videos, depending on the price of the property; it's worth paying a few thousand dollars for a professional video with actors.

How much do you, as a real estate broker, invest in "staging" the property, or in other words, in decorating it before presenting it to buyers?

Last year, I spent around $260,000 on video production, photography, organizing parties for buyers, hiring professionals cooks, and advertising in newspapers... The staging, or decorating the property, usually includes buying furniture, curtains, and the smallest details; in most cases, the owner pays for it. Sometimes, I'll bring in a lamp for more light or a painting. We recently had a case of a property worth $6 million, whose owner invested $120,000 in staging. That's a lot, but normally, staging a $5 million property costs around $50,000. Although the owner will pay for it, I'm the one who leads the process to ensure the property looks exactly the way I want it to.

Does staging make sense for non-luxury properties, say for an apartment worth 100,000 euros?

It all depends on the math. If staging can interest more buyers, maybe you can sell the apartment for 106,000 euros. From my experience, out of 20 people who see the property, I get one offer, and I need at least three good offers to get a good price. So, I need at least 60 buyers to come and see the property. You need to calculate whether it's worth spending 2,500 euros if the profit is 5,000 euros. Many people invest too much money that doesn't come back.

How have the market and prices recovered since the 2008 crisis?

After the Lehman Brothers' collapse, property prices plummeted, credit lines almost dried up, and people lost their jobs. I survived that period by selling completed properties to a few banks. Prices eventually rose again, but today we're seeing them fall again. The reason isn't the same as in 2008; there are fewer foreign buyers now, and there's a massive supply of properties on the market. I've even sold properties myself, and I own a home where I live and an apartment building with 80 apartments.

Croatia will never be like New York or London; what would you recommend to local players on a small market?

I'd advise them not to listen to me (smiling), it's not a small market. I live outside New York in a small town, Cold Spring Harbor, it's a very small community with relatively high prices, not like a city, but similar to Croatian prices. There, brokers make more than a million dollars per year. I believe I could move to Croatia and make a million dollars per year selling properties. There's no such thing as a small market; you just need to recognize its needs. Look at where growth is happening, how people's needs are changing, and focus on that.

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