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

I get to think that real estate agency is probably the most expensive profession. Practitioners do not only invest in obtaining licenses, people who provide this kind of service also invest (usually for free) their time, knowledge and skills to ensure that sellers are properly represented. If we take a closer look of the anatomy of a real estate service professional at the pre-sale level, they just don’t sell or broker a deal for the developer-sellers. They offer a very specialized service that deserves more than just the meager commission that they ordinarily get. They are as follows:

* Value and Market Analysis - Providing a fair estimate of the home's value compared with       others;

Promotion and Exposure - Marketing and preparing the necessary papers describing the property for advertising and listing;

* Generating leads - Building social networks by participating in both online and offline organizations.

* Participation in Exhibits - Distributing marketing materials; entertain walk-in queries and schedules site visitation.

* Assessing buyers - Ensuring buyers are prescreened to determine if they are financially qualified to buy the property.

* Site Tripping - bringing buyers to the project or site of the property.

* Coordinating and Facilitating a Purchase - linking buyer to the seller and guiding a buyer through the sales process.

* Document preparation - assisting and obtaining for the buyers the needed requirements for the sale to take place.

But as I have said, it’s quite heartbreaking to learn that brokers or agents only get paid after the property is sold. If you see through what’s happening out in the field, you will find that brokers or agents spend from out of their own pockets to drive the buyer to the site (of the property) like gas and sometimes refreshments or meals. While there are developers who provide free transport for site trips, these free site trips cannot be availed readily or easily anytime. Developers have this habit (a bad habit I would say) of fixing site trips on days when buyers are usually not available. And so, the agency takes the initiative to adjust to the client’s schedule if only to accede to the needs of the customers.

Thus, the agencies that represent the developers are the real frontlines of customer service. And if you come to think of it, good customer relationship only happens on the part of the developer when the buyer is ready to sign the check.

What about commissions?   There is an “unwritten standard” of remuneration observed by the industry for every property sold which is 5 percent. That 5 percent is split up by the broker with the closing agent depending on their agreement. The question is, is 5 percent enough for the agency? If you consider the work done by the agents at the pre-sale level, 5 percent is definitely too small a fee. Worse, there are shrewd developers out there who force brokers to split the commission with their in-house “unit managers” shrinking all the more the commission to the bone. The worst thing of it all is that full commissions can only be had after a year and sometimes even two years! And that’s just OMG!

What is needed now is to protect brokers and agents from this bad practice by developers. If there is a law professionalizing the real estate practice to protect buyers and sellers, why not put up a law to protect the practitioners themselves? If there is the Real Estate Service Act (Resa Law), why not put up the Real Estate Agency Protection Law (Reap)? It’s about time for all the brokers and agents to unite themselves and put an end to the abuse that they have long endured. They can't just shut up and do nothing about these abuses. They need to act -- NOW!

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