As you search properties it will quickly become apparent that you frequently see the same properties, at different prices, on different web sites. You can even see the same properties twice on the same web sites at different prices.
The reasons for this are complex and can be attributed to a number of different factors, which create a very unique market environment for the trading of real estate here in the Yucatan.
After 25 years of practice in a regulated market I found it a "shocker" to say the least, when I opened my doors for business here in the Yucatan. In order to best illustrate how the real estate industry operates here, it is necessary to cover a few key points to establish a frame work for the rest of the discussion.
So let's have some fun !!!!
Yucatan Real Estate Politics 101.
There is no multiple listing service (MLS) here in the Yucatan.
- Nor are there any licensing requirements for people trading in the real estate environment.
- Nor are there any real estate laws, concerning ethical practices or disclosure.
- Nor are there any boards, councils, or consumer protection agencies to complain to, in the event of fraud, breach or negligence, with exception of the courts which do not offer a practical remedy.
There are currently a dozen or so real estate companies catering to foreigners here in the Yucatan. Out of the above there are 4 or 5 key agencies who dominate the market.
In most cases home sellers refuse to sign a listing contract of any kind when selling their property through a real estate company.
Tragically; when the seller receives all the sale proceeds on closing, many real estate agents are regularly refused payment after successfully marketing the seller's property. Any real estate lawyer in the city can testify to this fact.
In short it's a free for all. However; in an attempt to operate on a professional basis, the realtors who came to the Yucatan ( who were previously licensed realtors and brokers in other countries ) continued to practice real estate the way they had always done so, using the same infrastructure and a professional code of ethics. Others did not, resulting in greater liability for the realtors who became involved with unskilled practitioners who see only the commission and ignore the obligation of disclosure.
Now the plot thickens!
In the absence of an MLS system, realtors wanted to remain competitive by at least having the same selection of properties as the other brokers in the market place. Because there was no legislation on how listings were acquired, this meant:
- that other companies could copy entire listing profiles from a competitors site and paste the profile onto their site, OR
- they could visit the owner of the home posing as an interested individual, take the interior pictures, and post the property to their web site without the owners consent or knowledge.
Most sellers will not sign a contract because they do not want to tie up their property with an agent that can't get results. Sellers generally feel that they will have the greatest advantage using an army of agents running around trying to sell their property, thus not caring whether every company had it on their web site. Additionally, sellers like to reserve the right to keep their private " for sale by owner sign" on the property, in hopes of selling privately to a buyer who ultimately wants to save the same commission the seller wants to save.
Actually the opposite is true, because experienced realtors don't invest their resources on sellers, who have no loyalty or over priced unmarketable properties.
When the house finally sells, a number of things occur:
Other realtors unknowingly leave the house on their site, because they have not been notified of the sale by the owner of the property or the selling broker and it just never gets taken off.
Six months later the current owner decides to sell the house ( perhaps it's a different color or has a couple of small renovations ) on another website at the current asking price.
So now you have the same house on different sites at different prices whether it be a current seller, previous seller or just a price increase by the same seller. This is obvious on some sites because the pictures are time and date stamped and you can see the pictures are years old.
You will routinely see houses listed on other sites , that were sold years ago and they were not removed from the company's website, even when the brokers knew the house was no longer available.
Why ? Three little letters !
"SEO." Search engine optimization. All of the real estate firms down here rely almost entirely on business which comes to them via the internet. SEO is a real science, and among other things, search engines rate each site on relevant page content and the number of pages in each site. This means out of date listings count as content, therefore increasing the sites ranking with Google, which owns about 85% of the market share.
Most other search engines derive their results through Google at some point.
The brokers don't want to reduce their page content, especially when they can bait and switch anyone who inquires about the property which is no longer available.
There 's nothing wrong with showing your client another property, but having them fly down here to see a property that you know is not available is ridiculous and very expensive for the client.
I cannot tell you how many times we have told a client, who wanted to list his property with YMB, that we can't get the money they want for the house, because it's on three other websites for $ 20,000.00 less . The owner tells us he never gave anyone permission to sell his house, he does not know how they got it and besides, the pictures are years old. They forget about that stranger they allowed into their home, who took pictures to supposedly show his wife. I can think of one instance where foreign owners were told their house was on a site without their consent and when they looked at the pictures they discovered, to their horror, that someone was actually living in their house.
YMB property management services eliminate this type of nonsense.
It gets better ! Most owners tell us they don't care who has it listed or at what price, because they will only sell it for the price they have just quoted YMB .
So now, as an agency, we have a choice. We can either put the property on the YMB site with the current owners instructions, and appear over priced compared to our competitors, and subsequently risk loosing a potential client who thinks he can get the house cheaper through another broker who does not have current information.
Buyers incur the costs of air fare, hotel and car rental, with no compensation if the house they came to buy is no longer available .
Most realtors do not put signs on their listings because they have no contract with the seller; therefore the sign is more likely to alert competitors as to the properties availability, rather than resulting in a sale to one of their own clients. That's why the information and pictures on other web sites is so vague and illusive .... they don't want the other realtors to know its location.
My signs are routinely vandalized because they contain the property I.D. number in the top right hand corner.
This number gives purchasers greater access to information and the ability to communicate with our office, to specify which property they are interested in, even when they are not sure exactly where they are during the house hunting tour in the rental car.
The bottom line is, regardless how hard you work for a seller, the only one who makes any fees on the sale, is the broker who had the purchaser. In a case where brokers cooperate and treat each other with professional respect, the outcome is more equitable.
Periodically; YMB works with a client for weeks on a specific property, who later submits an offer on the same YMB listing through another realtor. YMB does cooperate with other professional realtors when they bring their own clients to see one of our listings, however; we do not split fees with realtors who " walk through the door" with clients we have already been working for, and have months of emails to prove it. Professional realtors always inquire as to whether someone has been dealing with another realtor on a particular property.
Finally ; I am constantly asked if I expect an MLS system to be established for the Yucatan area, and my opinion is that it certainly won't be, at least in the foreseeable future.
Why?
Multiple listings services are basically set up to show case the properties listed for sale by their broker members.
Being a member of these real estate boards is very expensive, as you pay to join and you pay monthly fees for each of the sales people at your firm. Then you pay every time you post a property on the MLS system.
Don't forget, all the brokers here in Merida own their own websites, which work just fine for them now.
All of the above would mean higher operating expenses, in a market place where the sellers won't sign a listing contract. Sellers are free to accept third party offers with absolutely no compensation to any one else.
Even if the brokers wanted an MLS system, there needs to be legislation passed regulating its mandate and content. In order to post listings, it calls into question the credentials of its membership, which in turn leads to licensing requirements, courses and curriculum.
At the end of the day, the system would have to be set up to centralize information and the public will want some one, or some agency, to be accountable for its content.
In short, no body wants to pay for it or be responsible to the public for its accuracy, or be governed by a board that would have to over see it .
If brokers maintain a high ethical standard of practice including disclosure, I can't see government legislating into existence, a system which it does not have the tax base to service, or the infrastructure to administrate.
You now have insider information that 90% of the purchasers coming into this market know nothing about.
This does not mean the real estate industry is bad, it just means it's predictable and a product of it's enviornment.
The real message here is, find a good realtor. One who is knowledgeable and is easy to contact, and responds to your inquiries quickly.
Respect the value of the realtors time, their experience and the services they provide and the respect will be mutual.
