For those of you in countries/markets without a MLS, you know your real estate market does not operate in the same way as it does in the US where a Multiple Listing Service is the norm. At first glance things may appear the same – there are ‘real estate agencies’, ‘listings’, ‘property registrations’ and so on – but dig a little deeper and you’ll find it to be quite different. This article looks at how the market works for Nicaragua real estate, but much of this holds true for other countries in Central America.
Marketing tends to be cursory
Welcome to a world without an MLS. In Nicaragua ‘open listings’ are the norm. Sellers list their property with several real estate agencies and informal sellers at the same time, but only the person who brings the buyer receives the commission.
The upshot is that agents are not highly motivated to market the property because the time and money they spend can easily go un-rewarded if a competitor ultimately sells the property. There are exceptions of course, but marketing tends to be cursory for most properties. Perhaps a website listing, but little else.
A daunting experience for buyers and sellers
Buyers are left having to trudge around on property viewing after property viewing with multiple agents from different agencies in order to see all properties that may be suitable. This is time consuming and still leaves buyers with the real concern that they have not seen all there is to see.
Sellers also have to be determined. The only way to give their property good exposure is to take the information round to each agency individually and then follow-up on a regular basis to keep the property front of mind. If the seller lives abroad, this can be difficult.
How about exclusives?
North American sellers are sometimes surprised that brokers in Central America don’t jump at signing up exclusive listing agreements. Some may simply wish to avoid the hassle and follow up required, preferring the uncommitted nature of the seller/agency relationship. But more significantly, in the absence of an MLS exclusives don’t work very well.
This is because everyone, bar the listing agency, sees the exclusive listing as one that does not pay a full commission, as the listing agency will expect a commission share. And if the listing agent decides not to share the exclusive listing with other agencies, sellers will only be getting the benefit of the marketing muscle of the single agency.
Despite the obstacles of not having an MLS type system, broker collaboration is starting to increase Nicaragua and split commission agreements are becoming more common.
The internet is also helping. Blogs, opinion websites and news sites are improving efficiencies and shedding light on the more opaque aspects of the market. Buyers can now do a great deal of research, choose which brokers to work with and learn about the market without even getting on an airplane.
And sellers now have more options to take control of marketing their international property, listing them not only with ‘bricks and mortar’ agencies in-country but also with online advertisers, international property portals and their own dedicated property page on the web.