The bane in real estate agency practice (First of two parts)

Real estate in Cebu is booming like crazy. In Cebu’s major business districts, vertical constructions intended for commercial and residential use dominate the skyline. Residential developments have also mushroomed not only in the metro areas but have reached as far as Bogo up north and Sibonga down south.

By all indications, the real estate market has never been this good and record-breaking as far as Cebu is concerned. Thanks to the property investors who have put so much confidence on Cebu’s growing business potential and to the countless men and women who are behind them to support their sales and marketing efforts.

With the Resa (Real Estate Service Act) in full force, we will soon have a more trustworthy and professional real estate service providers.

While the Resa seeks to professionalize the practice, that does not, however, make the practice any lucrative for any Tom, Dick or Harry who sells properties for a living. Yes, I do agree that the Resa, to a certain extent, levels up the image and dignity of our real estate marketers, but it can only do so much in terms of providing the kind of protection (financial and professional) real estate practitioners need.

First and foremost, we have to understand that the Resa was enacted primarily to protect sellers from misrepresentation or from people who try to cash in on unsuspecting buyers. Thus, the Resa only seeks to remove the bad eggs that thrive in real estate agency.

What is needed now is to protect real estate practitioners from abuse. Brokers and agents pay for their exam or license from the Professional Regulations Commission (PRC) to legitimize the practice. They invest on seminars and some even go as far as getting a masters degree in real estate in order to improve the service and assistance customers deserve during the buying stage. Despite all the efforts to be of value to their clients, we still see a lots and lots of brokers who end up broke in their chosen career. Only a few actually survive in real estate. Only a small percentage of them make a decent living out it. 

The crux to the matter really is that real estate agency is unlike any other profession that you get paid after you deliver the service. A doctor gets paid after every consultation or after he/she performs a surgery. A lawyer gets paid after consultation and receives his acceptance and appearance fees while the case is on-going. An accountant is paid after he fixes the books and financial statements of a company. 

In real estate agency, it’s a totally different world. From the moment a client comes to inquire about a condominium or a house and lot in a subdivision, the broker or agent, spends time providing advice without getting paid, brings his client to the site of the property and makes calls every now and then to follow on him without getting paid. Out of the many processes involved in real estate selling, the broker or an agent gets zero for the service done. And from out of the ten clients he deals with, only one of them is likely to buy. And if he’s lucky, he seals the deal and waits like, usually, more than a year to get his commission from the developer -- that’s the sad truth. Worst of all, not all developers pay and if they do, many of them do not pay on time. Mind you, a lot of these developers are big names and often found in glossy magazines.

It beats every good and common sense why it would have to take more than a year for a broker or an agent to be paid by these developers. If they can afford to spend millions for a quick ad, why can’t be they so quick to pay those who make real money for them?

(To be continued…)

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