So what is MLS?. According to Almighty Wikipedia, “A Multiple Listing Service (MLS, also Multiple Listing System or Multiple Listings Service) is a suite of services that enables brokers to establish contractual offers of compensation (among brokers), facilitates cooperation with other broker participants, accumulates and disseminates information to enable appraisals, and is a facility for the orderly correlation and dissemination of listing information to better serve broker’s clients, customers and the public. A multiple listing service’s database and software is used by real estate brokers in real estate representing sellers under a listing contract to widely share information about properties with other brokers who may represent potential buyers or wish to cooperate with a seller’s broker in finding a buyer for the property or asset. The listing data stored in a multiple listing service’s database is the proprietary information of the broker who has obtained a listing agreement with a property’s seller.”
Having said that, how is Real Estate done in Panama?. What do Real Estate agents do?.
The way it works here is as follows: 90% of brokers in Panama do their listing as “Non Exclusive“, meaning the owner of the property welcomes every other agent to bring in clients and the Broker does not commit with the owner to sell. Most of the cases, there is no strategy, no marketing plan, no follow-ups. Brokers go online, upload a few pictures (sometimes taken by owner because the did not take the time to visit the property), write a review and wait to get lucky. Sometimes owners say “they hate to be limited” to only one Real Estate company; so they send their listing to over 20 Brokers (even more) promising a commission if they have a buyer and every Real Estate broker can advertise the way they want it. Now, here comes trouble: owner decides to drop the price because 3 months are gone now, and yet not a buyer. Owner goes online and logs in to every website they advertised and reduce the asking price. Turns out, Broker 1,2,3, and 4 didn’t know this, nor they followed up. Why they did not follow up?. Because they are not committed to the property nor committed to the owner. They have no interest what so ever unless they find a potential client. So they keep advertising their listings with the same asking price, now different from the owners. But hey, plot thickens…Broker 2 decided to raise the price of this property. Why?. Just because. The way they see is “So the owner wants 200k (of course that includes the commission); so I will advertise for 215k and I keep the extra 15k plus the 10k from the commission”. Sweet deal huh?. Now you did not notice, but you have Owner selling his/her property for 175k. You have Broker 1,3, and 4 advertising for 200k. And you have Broker 2 advertising for 215k. All of this to one single property.
What do you think is the result of this. Think it over as a buyer. No. Wait. Think of this as if you were a foreign buyer (most foreign buyers rather work with a Realtor than deal straight with the owner). You go to http://www.encuentra24.com (Most popular Real Estate page in Panama, where even my dog can post anything) and you find 5 different asking prices of the same listing…even the same pictures!. I bet you would not consider this as your top choice and maybe you pass the page over and continue your search. Or maybe you call one of this brokers and then you find out that the Owner is selling for 25k less.
What I just explained happens everyday in my country. And even more things happen. Sometimes some “brokers” go out fishing. What does this means?. They create a listing of this really nice house, with 4-bedrooms/bathrooms, a pool, 9000 square feet lot in a prime location for $135k. You might think “WOW I just found my house in Panama!”. Wrong. You just bit the dust. Once you call and schedule a visit they will tell you “the house sold last week, but I have this house for 750k…are you interested?”. Is that a legit way to do business?. I think not.
Panama became a major Real Estate destination for many people from all over the world and thanks to them, our economy is even better now. We need a proper system that serves everybody to a 100%. There is no room for “honest” mistakes here. If the owner wants to sell on his own, perfect. You go and do what you know. Go online, advertise, newspaper, etc. But that is that. One listing. With one price. Sold by Owner. If you want to work with a Realtor, find the one you trust. Go online and do your research. Doesn’t matter where you are from, you can get the info you need and contact someone reliable. You need to ask the right questions of course: How is the market?. Who is selling a property similar to mine?. What is the right price for my property?. Who is your target?.
So what is the best way to do it without an MLS?. Definitely, a Realtor is key. If you want to promote your house to the fullest you need a realtor who knows the market and THE PROCESS. Finding a buyer is important. But knowing the process after accepting the offer is also a big deal. Determining the exact amount of tax to the government BEFORE accepting the offer (I do this when Im listing the property, actually), knowing the process with each Bank, closure of 90 or 120 days, etc…Even while promoting the property go to the Public Registry and MEF in order to find out if the values match (if values doesn’t match, there goes another 45 days). All of these things you get with an Exclusive Listing. Do not think working with one company reduces your chances. That’s not correct. Because this Realtor will share his listings with a list of Realtors representing a potential buyer. Splitting commission 50-50 is a common procedure among brokers. Like I always say “if the price is right and the marketing is good, it is going to sell”.
For the last 5 months we have been pushing Panamanian authorities and proper institutions to develop a regulated real estate system serving all brokers and buyers/sellers. Hopefully we will have one soon.
In my next blog I will include some pictures of the “wrong” listings you find on the internet so you can learn the “NOT TO DO’s”. Thanks for reading my blog and I wish you an great week. See you next Monday.