At first look, the real estate business is pretty simple. You have a seller, you have a buyer and, in most cases, you have a couple of agents who represent the best interest of their respective clients and make sure that any meeting of the mind is properly expressed, orchestrated and executed. Simple enough. The problem (because don’t you know that there is always a problem in life when you make the mistake of looking for one…) is that there are hundreds of ways to define “simple”. It depends on who you are and where you are. It can be confusing. Correction: it is confusing.
Look at a typical real estate transaction. Sometimes, you have a real estate agent involved. Sometimes you have two agents. Sometimes you have more. Then again, sometimes you have none.
Depending on where you are in the country, an agent may write the offer and spell out all terms and conditions of the purchase. Sometimes the agent cannot do that much, as a “closing attorney” is necessary to draft a purchase and sale agreement.
Sometimes, an offer can only be written on one standard form. In some states, there are several different association forms. Sometimes, brokers’ proprietary forms are used. Sometimes, stationary stores’ forms are fine. Sometimes, any signed paper will do.
Sometimes, a title company is employed to do a title search, insure clear title and proceed with the escrow and the closing. Sometimes, there is no title company. Sometimes, there is no escrow agent.
Sometimes, listings are placed on the MLS, to communicate the property info to all participants. Sometimes, they are not. Sometimes, there is no MLS. Sometimes there are many.
Sometimes, agents are members of a real estate board or association. Sometimes, they are members of more than one board. Sometimes they are members of none.
Some agents are independent contractors. Some agents are employees. Sometimes, it does not make any difference about what they can or cannot do.
Some regional MLS are run by real estate brokers. Some are run by agents or a mix of agents and brokers. Some are run by MLS administrators or outsiders.
Some MLS only display brokers’ listings and sales. Some allow “For Sale by Owners” listings.
The number of years a real estate license is good for and how many hours of approved education are required to renew one’s license vary vastly among the states.
Some states issue a license the day a candidate passes the test, while others wait months to send the papers.
Some brokers use diligence to procure a buyer for their listing. Some are happy enough to have a listing and do not feel the urge of marketing it. Some would like to, but don’t have the means to do it.
As if it was not confusing enough to figure things out in the US real estate business, now, in the global age, we need to know and understand how business is done elsewhere in the world, where a growing fraction of our buyers come from. Our saving grace is that, when you look at the rest of the world, we don’t look that bad.
In many countries, real estate is anything but organized. Often, there is no licensing, no education requirements, no MLS, no brokers’ cooperation, no fiduciary duty to the Principals, etc. A lot of different people can sell real estate… And the problem is they do! Ouch!
It’s a zoo out there. When I think about what’s going on in the profession outside of our borders, it makes me feel better about how confusing it is within. We have 1 million real estate people doing business through 1000 MLS in 50 states, over 3,000 counties and nearly 20,000 towns––and going in all kinds of directions. The trend, it seems like, is to preserve and promote differences based on tradition, laws and local practices. Not a good idea at a time when the profession needs more unification to better resist the menace of new virtual predators interested in getting a bigger piece of our business.
I know it would be absurd wishful thinking to hope for total convergence of vision and methods, all over the map, between companies, agents & entities related to our core business. I nevertheless hope that the big picture guys running the profession will dare to try. Simplicity is the hardest goal to achieve in business.
By Alain Pinel, General Manager of Intero Prestigio International, Intero Real Estate Services, Inc.
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