Credible System: The US Model
Cover Oct 02, 2020
I believe that sales convenience and transparency are indispensable components of the international real estate trade.
According to the report of the amerıcan national associatıon of realtors, international investors purchased $74 billion worth of real estate from the USA between April 2019-March 2020. The June statistics also show that there is a 22% increase in sales to international investors within a month. China, Canada, Mexico, and India are among the countries that show the most interest. Even COVID-19 and the tense mutual relations between countries couldn’t decrease the passion of the investors in the US real estate market. To have a credible real estate trade system is also greatly important in decreasing risks as well as reasons such as the USA having the strongest economy in the world, its currency preserving its value against other currencies in a long-term, and the desire to diversify investment instruments and the expectation of high income in a mature market. We need to talk about the real estate trade system in America when we talk about the keys to the real estate trade. You can see the summary of this system in the following items:
· 89% of the people who sell their houses in America exclusively work with a listing agent. In other words, they give power to only a listing agent to sell their houses. They sign a contract for a
certain commission (generally 6%) from six months to one year. In this period, the authority to put the house on the market only belongs to the listing agent with a contract.
· The American system is built on cooperation
between realtors. After making the contract with the seller, the listing agents have to put their portfolio to the pool of the local Multiple Listing Service. In short, they have no right to say that “this house is my portfolio, so no one can find a client except for me”.
· Investors looking for a house in the same market come to a listing agent who they already know and trust and inform about their investment criteria instead of individually finding listing agents with a portfolio. The buyer’s agent can reach all real estate lists in that region by pressing a few buttons and all their features through the Multiple Listing Service.
· Bidding, technical expertise report, title deed, and similar procedures are tracked for the investors to reach their real estate goals.
· Upon completing the title deed process, half of the commission collected from the trustee seller is allocated to the seller’s
agent and the other half to the buyer’s agent.
Our main goal is to provide convenience to investors
As you can see, buyers give no commissions, they don’t have to be a US citizen or have any kind of visa. You also don’t need to give a power of attorney to anyone or have a bank account in the US. Offers are e-signed, and the price of the house is sent to licensed trustees who are mostly advocates. There is scarcely any bureaucracy. Therefore, everything is based on making it easier for the investor to purchase real estate. Eventually, a solid system based on a central database and purchasing convenience and transparency are essential in international real estate trade.