What is the difference between realtors, their duties and work in various countries?
You have learned the profession in your country and got your real estate license or as a private seller you have an idea how realtors work in your own country (if not, then it is time to get this knowledge as you want to minimize your expenses and maximize the profit from the sale of your property). The same thought goes for a developer willing to hire the foreign realtors to bring foreign buyers from their countries to your newly built properties.
Here is the trap that we started talking about in the previous post: Assuming that in any other country realtors work the same way as in yours. They most often do not!
The differences may be in so many means:
-The licensing system and its requirements are unique in each country (in the U.S. even various states have their own rules) and some countries do not require any licensing for realtors at all;
-The real estate commission size and split between realtors are regulated in some countries or not at all in others;
-The realtors’ agreements with sellers or buyers are exclusive in some countries and non-exclusive in others;
-In some jurisdictions realtors are responsible for closing the deal and they pass the task to other specialists in other jurisdictions;
-Using MLS or similar systems is a must for realtors in some countries and such systems do not exist in others;
-Associations of realtors vary a lot in terms of rights and responsibilities of members in different countries;
-Even the name “Realtor” does not have the same meaning all over the world (speaking of their work duties and responsibilities).
By the way, throughout this blog we use the words “realtor” and “real estate agent” interchangeably although it may be not really correct in some jurisdictions.
Also the difference between the work that seller’s and buyer’s realtors perform should be always taken into consideration. If you hire a local realtor to sell your property commission-based, or you are this seller’s realtor yourself, then the realtor’s duty will be to market, advertise and promote the property for sale at the own realtor’s expense most of the time (hoping for a sizable real estate commission at closing).
It is a different picture with the foreign realtors. Usually as a private seller you offer the foreign realtors to find a buyer for your property for sale and promise to pay a real estate commission on sale, or as a local realtor for the property you offer the foreign realtors a real estate commission split on sale to a foreign buyer.
Obviously, the foreign realtor will act as a buyer’s realtor with no responsibility to specifically market, advertise and promote your property. In any such commission-based situation the foreign buyer’s realtor is actually serving the buyer, not the seller.
There might be exceptions if you as a seller ask the foreign realtors to act essentially as your seller’s realtor and advertise your property for sale in the foreign country, but then it is understandable that these foreign realtors cannot be exclusive and thus you are responsible for the advertising costs, right?
This is usually the best way to go for developers with multiple properties in various stages of completeness: To hire a local representative in a chosen foreign country and pay them not only real estate commissions on sales, but also for advertising and maybe salaries and office expenses if they work exclusively for you and channel all potential buyers from their foreign country to your development.
In the next post we’ll talk about how Russian realtors approach the international real estate commission issue.
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