Four Curious Ways International Real Estate Differs from North America

Four Curious Ways International Real Estate Differs from North America

Not all land markets are created equal. The differences have fundamentally supported by the principle of cooperation.

International land authority, Carlos Matias, explains that the first difference across global markets is rooted within the presence or absence of systems and policies supported cooperation. As founding father of leading global land technology companies, GryphTech and Phoenix Software, Carlos has 20+ years of experience helping global land companies in over 60 countries grow and is uniquely qualified to know this.

According to Carlos, four of the foremost significant challenges unique to land markets outside North America are as follows:

1. Lack of Systemic Cooperation

Without an MLS system, associates are reluctant to cooperate, buyers struggle to understand what's on the market, and sellers have limited property exposure to get a fast sale at the simplest price. With quite 800 MLSs in North American land, broker cooperation is that the norm and broadly perceived as beneficial for both sellers and buyers. Sellers enjoy increased exposure for his or her properties and buyers enjoy access to all or any MLS-listed properties while working with just one broker. Whereas outside North America, there are only a few areas with an MLS, so brokers, as a rule, don't typically share their listings. As a result, the way during which consumers look for, buy, and sell properties and associates service their clients varies significantly.

As an example, a couple of years ago Carlos experienced this challenge first-hand when trying to find a property to get in Portugal. to start his search he traveled to Portugal and walked into a true estate office asking to ascertain some local listings. He was shown only three or four listings represented by that agent and when he asked if there have been any others he was pointed to a different land office down the road. When walking into this second office, Carlos was again shown just a couple of listings and directed to yet one more office a couple of streets over to ascertain if that they had additional listings. This was clearly not the foremost efficient model from a buyer’s perspective nor did it serve the seller’s best interests.

When competitors cooperate it benefits everyone involved within the transaction. It also provides for max exposure of properties, which is sweet for both buyers and sellers. Without an MLS, brokers create their own separate systems of cooperation, fragmenting instead of consolidating property information. This fragmentation inhibits the quantity of exposure each listing receives and limits referral opportunities between associates.

2. Open Listing Agreements

Open Listing Agreements limit seller opportunity thanks to the prices of undedicated representation and misguided buyer perceptions. Unlike North American markets where exclusive listing agreements are largely the norm, within the majority of markets outside North America, open listing agreements are commonplace. 

When competitors cooperate it benefits everyone involved in the transaction. It also provides for maximum exposure of properties, which is good for both buyers and sellers

In Europe for instance, it's common for property owners to solicit multiple land associates to sell their property. during this case, when a property sells, the commission is merely paid to the associate who brought within the buyer. From the owner’s perspective, more associates equate to more potential buyers and competition between associates adds a way of urgency supporting a quick sale.

The challenge, however, is that the competition open listing agreements create between associates often leads to a race to bring forward a suggestion, any offer, so as to secure the commission, instead of finding the simplest offer for the owner. Also, associates are likely to prioritize their exclusive listings over their open listings, often lengthening an open listing’s days on market driving down the worth. Buyers can also interpret a property having multiple associates represent it as a symbol that it's difficult to sell, suggesting there might be a problem with it or it’s overpriced. All of those occurrences are to the seller’s disadvantage.

Overall, with an exclusive listing, one that's listed with just one broker, associates are much more motivated and personally invested to find the proper buyer and price for the vendor he/she represents. within the end, the purchasers win: Buyers find the simplest home for his or her families from all the possibly inventory properly represented by an agent and therefore the sellers get the utmost price for his or her home faster by exposing it to as many buyers as possible from other agents.

3. Lack of Regulation & Enforceable Law

An unregulated industry leaves all parties exposed and lacking confidence. In North America, land professionals are subject to rules governed by boards and associations who issue licenses and enforce laws and regulations. These laws protect agents and consumers and supply everyone involved during a transaction with a way of security and confidence. there's no such equivalent on an equivalent scale outside North America. In many markets, there are not any qualifications or licenses required to sell land nor are their enforceable regulations to control transactions; almost anyone can sell a property and sometimes anything goes. For those laws that do exist outside North America, they vary significantly in type and enforceability and are typically only within a little geographic area and almost never at the national level.

Lack of regulation has its consequences. For instance, it reduces the willingness of associates to separate their commission on a transaction and when commission disputes arise (such together associate claiming that another associate didn't pay their split), they often got to undergo small claims court which may be expensive and take an extended time to resolve. a scarcity of regulation also can cause associates finding creative ways of selling properties so as to avoid paying a commission split to their broker. Together, these issues cause challenges in the least levels of land from inaccurate data and financial reporting to a scarcity of clarity on the rights of all involved.

4. Portal Dominance

Internationally, land portals are a necessary evil. to satisfy growing seller demand, associates are listing properties at a big cost. Property search has evolved over the years and portals became powerhouses with important market share. They invest heavily in marketing to make and sustain consumer demand. It’s estimated that there are over 10,000 property portals around the world and growing. Portals are quite just classified sites. Some act as advertising giants selling ad space and making use of rich databases of consumer information they’ve gathered, who then sell the knowledge to other advertisers. Others promote products and services from other verticals, like automotive, careers/jobs, short-term rentals, and eBay-type marketplaces. This multi-purpose model often mitigates the effectiveness of land listings and their ability to get qualified leads.

With the worldwide market flooded with portals, it’s causing a battle for listings, web traffic and web leads between portals and land brands. Portals are perceived by some brands as a threat to their value proposition. it's increasingly common for sellers to demand that their associate list their property on the dominant portal in their market, no matter the value to try to so or likelihood of causing leads, with indifference given to their listing being placed on the brand website. However misguided this might be, it's a challenge for several brokers and associates, as portal fees are often expensive and act as a chance cost for other marketing.

 

 

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