Because I was licensed and practiced real estate in Canada, I believe it was a much tougher for me to adjust to the real estate profession in the Dominican Republic than it would be for someone coming in without previous experience in real estate. Regularly, I find similar evidence when explaining listings and commissions to buyers and sellers. If they laugh out loud or utter a phrase along the lines of, "you have got to be kidding me", or "wow like the wild west", I know they have worked in real estate in a first world country at some point in their lives. Why this divergence in broker practices when the buying process is so similar? Basically, the lack of a Multiple Listing Service or MLS and the reluctance of the established and powerful brokers to unite and form an MLS has resulted in a buyer broker system emerging that is very different from the real estate practices in North America.
The most notable difference is the "non-exclusive" listing. Because there is no MLS in the Dominican Republic, and the majority of buyers are shopping online, most sellers prefer to sign a non-exclusive listing agreement; which allows them to list with as many brokers as they wish. They are then only obligated to pay commission to the broker who brings the buyer that purchases the property. Sellers do this in order to maximize the exposure of their property. When they list with all of the major brokers they know that their property will be seen online by 99% of buyers whos' criteria matches their property, through at least one of the broker's website.
This "non-exclusive" listing practice is very self perpetuating. Buyers do not want to list with only one broker because they need to list on as many brokers' websites as possible in order to maximize the exposure of their listing. Brokers are reluctant to spend too much money promoting a listing because every other broker also has the listing and there is no guarantee of a commission. Independent online companies who offer brokers a free listing service in an attempt to provide a makeshift MLS, end up with multiple listing of the same property, often with conflicting information, which leads to a messy and untrustworthy site, through no fault of the sites owner, but rather due to the fact that so many brokers are uploading listings and most brokers have the same listings.
Due to this system, conflicting information and disputes over commissions are common. Sellers will list with numerous brokers and then change the price but forget to notify every broker. This results in the property being listed at several different prices which is very off putting for buyers, and completely frustrating for brokers, who are often accused of inflating prices and keeping any extra in commission. Most large franchises will never allow this practice. It is dishonest and would lead to nothing but lost clients because buyers in our times are very savvy and almost always have reviewed a property they are interested in on several other sites, before they make an inquiry.
Buyers will often visit the Island to look at real estate and arrange appointments with sales people from several different brokerages. This lack of loyalty from the buyer can again be linked to the fact that there is no MLS system. Buyers do not want to miss out on a property because the broker they are using does not have it listed (or has it listed at a higher price), so they "cover their bases" by going out with several sales people. The sales people match the buyer's criteria with the properties on the market, and because most brokers have basically the same listings, real estate sales people will often take a buyer to a property that they have already visited with another sales person. Not a problem until the buyer decides to put in an offer. Regardless of which broker the buyer submits the offer through, the other broker will still have a claim. Most brokers are able to work this out through general rules of thumb, professional courtesy for other brokers and open communication with the buyers. But these problems arise at times even with an MLS so without an MLS they are inevitable.
I have adjusted to these very different methods in the real estate profession here in the Dominican Republic, and I have found that the KEY is communication with both your sellers and your buyers. When you explain the difference of non-exclusive listings to your buyers upfront and show them that you will work hard for them and are able to show them listings from every brokers' website, most will work with you exclusively. For buyers who insist on working with other brokers explain that it is imperative that they let you know if they have seen a property with another sales person before you show it. Also make them aware that if they see a property with you and then make an offer through another broker the seller is put into a situation where they may be forced to pay two commissions which will likely result in a loss of the deal. With sellers simply let them know that it is vital that you are able to register a client with them when you show their property, stress how important it is that they notify you of any changes to their listing and explain how damaging it is to their listing when it is advertised at different prices.
Most clients, both buyers and sellers, appreciate your honesty and work with you to tame "the wild west".
Joanne Hammond is the broker/owner of Remax Ocean Side Realty in Puerto Plata, Dominican Republic. Joanne worked in commercial real estate in Canada for 7 years before moving to the Dominican Republic 4 years ago where she established the Remax franchise along with her husband. For more information on both Dominican Republic commercial real estate or Dominican Republic real estate residential listings check her website or call her directly.
Joanne Hammond MBA
BrokerRE/MAX Ocean Side Realty,
Puerto Plata, Dominican Republic
Dominican Republic real estate
info@dr-remax.com
Cellular - 809-657-4141
Office - 809-261-1168
check out our Dominican Republic Real Estate site information.
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