Are Brokers In Central America Playing Hard-To-Get With Their Listings?
This post is the third in a series that explains how the real estate market works in Central America. Here we look at why buyers in Central America may feel that brokers are playing hard to get with their listings.
Imagine this …
You’re searching online for an ocean view condo in Panama and you come across a listing that takes your fancy. It looks like there’s a nice open floor plan and exactly the kind of kitchen you’re looking for. And maybe that’s a surf break you can see out of the bedroom window. Looking good… So you scan the listing to find out where the property is located.
Now here’s where the information gets scant. In fact, you can’t find any location information whatsoever. “Why?” you wonder in frustration, “Is the broker not giving me this crucial detail?”
Is this a real listing?
Most likely you’re looking at an ‘open listing’ or a ‘pocket listing’. As it is ‘open’ any agency can list the property. But only the agency that introduces the buyer earns the commission.
You can see why it makes sense in this scenario for the real estate broker to keep the listing information vague – they want to reduce the chance of competing brokers finding the owner and taking the listing for themselves. For some properties, brokers and agents may take this one step further and not have any information on the listing on their website.
Open listings and inventory hoarding by brokers is common in the region. It’s a factor of not having an MLS system.
What about exclusive listings?
There are exclusive listings in some markets, (they seem to be more common in Belize for example), But again, in the absence of an MLS, exclusives don’t always work very well.
This is because everyone, with the exception of the listing agency, will view the exclusive listing as one that does not pay a full commission, as the listing agency will expect a commission share.
If you’re a broker, why show an exclusive property for a shared commission when you’ve got open listings on your books that pay a full commission? (In US industry terms a full commission comprises both the “listing” side and the “selling” side of the commission, known as “both sides of the transaction”).
Towards better location information
Things are slowly getting better as the online marketplace evolves. On this site for example we plot each master planned community on a Google Map. We also provide an estimate of driving time to the nearest international airport and the nearest town with a decent sized grocery store. (Here’s an example). It’s our Central American version of the DriveScore.
Of course we’re still a long way away from arming consumers with the kind of data they have in the US. But the data supply is increasing and transparency is starting to improve.
What to know more about how real estate works in Central America?
Here are other posts in the series: