Some of the solutions that facilitate business in the U.S. housing market could be effective in Poland.

Poland should try an American approach to help make the residential market more fluid. That was one of the main conclusions of the meeting of the AmCham Real Estate Committee in June. The speakers at the meeting were Don Mucha, committee co-chair, and Ron Nawrocki, an independent residential real estate specialist in Phoenix, Arizona.

Mucha said real estate professionals in the U.S. have access to a database containing vital information on every property across the country. Users can drill down to find information not only about the property, but also about real estate agents, brokers, and financing companies. “I can look in Phoenix and find out who owned the house I’m interested in, how much they paid for it, when they owned it, and what were the problems back to the point when it was built,” Mucha said. “I can find everything I need to know. Here, you know what it takes to get information like that. It is not so easy.”

According to Nawrocki, a Polish equivalent of Craigslist—a centralized network of online communities, featuring free online classified ads, with sections devoted to housing—would help.

Another idea is the reverse mortgage, which is slowly entering the market in Poland. “Poland, unlike the U.S., has a lot of cash in properties,” Nawrocki said. “In the U.S., everybody has a mortgage. This is another opportunity.”

Short selling is another idea. “If there are some owners who are ‘upside-down’—their mortgage is higher than the market value of the property—and default, things that we do in the U.S. could be done here,” Nawrocki said. “Mortgage loan modification and short sales—you buy a house cheap and sell it for more shortly, or redo the house and sell it as if it were new—are a huge opportunity for investors.”

Nawrocki explained that sometimes banks will not lend to owners to do the fix-up so they could sell it for more. In that case, private investors are the right people to go to. “Those who buy a house when it looks like new are people with money who want to have the best and latest of interior designs and so on.”

Nawrocki noted that there is not much resale going on in Poland, however. One of the reasons is that the residential market does not seem mature enough, which means there are not very many houses to fix up. “So there is a question mark over this solution here, but it is a huge business in America.”

Again, the issue of reliable data on a property’s history popped up. “You need to have data what it will sell for when it is fixed up and that show you what you should be buying it for,” Nawrocki said. “We have a big advantage in the U.S. because we know what we are going to sell it for. We can predict pretty closely.”

The benefits of private investors being active in the housing market are numerous. According to Nawrocki they may offer sellers creative solutions, such as leasing their property for a period before buying it, which gives the sellers a chance to have some cash flow rather than losing the property. “The question is whether this can be done in Poland,” Nawrocki said. “The mortgage is left in place and the buyer covers the mortgage. Private mortgage loans are part of our business when banks are not lending. This can be an opportunity, especially since the legal infrastructure is there.”

Finally, financial education, especially in relation to the housing market, should be more widespread in Poland. “A lot of stuff I’m covering about the U.S. real estate market, people in Poland have no clue what I’m talking about,” Nawrocki said. “How many people in Polish schools get financial training? There is an opportunity there.”

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