I’m Confuzzled
I’ve been reading and obsessing about the US property market for about a year and a half now, and do ya wanna know something silly? I still don’t get it. Compared to the process over here, your way seems bloody complicated to say the least. I don’t mean to be rude by any means, our way is not necessarily better, but if you’re gonna try to sell houses to folks from overseas then you need to know what they’re used to.
Ines has just written a great post about this, bearing in mind she lives in one of the sexiest parts of the US, it’s not surprising she gets people from all over the world wanting to buy houses from her. But as she’s found, dealing with people from other cultures can sometimes cause some tricky situations.
How do us Brits do it?
So for all of you who may be wondering how we buy and sell houses in Britain, this video should explain it. I decided to use video because a) it’s cool and b) I confused myself when writing the process down. If you’ve got any questions about our process then hit me in the comments, I’ve tried to explain it as clearly as possible but probably failed miserably along the way!
ines
October 12, 2008 at 10:34 am
You are just too cool Poppy! So I’m interpreting UK estate agents to be listing agents only – there is no representation for buying and buyers are pretty much left on their own to find properties, coordinate appointments and “hope” their best interest in being represented.
Definitely easier but not necessarily better – now it makes sense about the BRAND which is an eye opener because a lot of us that decided to leave the major brand because of unflexible corporate bureaucracy would probably be at a loss because most Brits would start looking at properties with the big brands…..unless they are google savy of course.
I do see a window of opportunity in The UK for someone to consolidate estate agents sites so the consumer has one place to go find properties……hmmmmm
John Corey
October 12, 2008 at 10:55 am
The UK and US is very different. Scotland is also different from Wales/England.
Some key differences for folks who know the US system…
No buyer representation in the UK. No MLS with the majority of the market data, limited history of recording sales at the Land Registry (4+ years). Offers are not binding in Wales/England and agents are not licensed. Anyone can collect a commission if they want to claim they are an agent.
I invest in the US and UK; about 25 years in total. Recently I have been asked to help some UK investors find deals in the US. I am putting together a document to explain what they will need to know.
John Corey
Phil Campbell
October 12, 2008 at 11:00 am
Great! – nice work. always good to see you on video. love that hat.
C Tann-Starr
October 12, 2008 at 11:18 am
Wow, you guys do it totally different from how we process it over here. In New York State we start by going over the disclosure forms to explain real estate agency relationships. A Seller’s Agent is am agent who is engaged by the seller to represent the seller’s interests. A buyer’s agent is engaged to represent the buyer’s interests. A broker’s agent is an agent that cooperates or is engaged by a listing agent or buyer’s agent (but does not work for the same firm as the listing or buyer’s agent) to assist the listing agent or buyer’s agent in locating property to sell or buy, respectively, for the listing agent’s seller or the buyer’s agent buyer. In this case the broker’s agent does not have a direct relationship with the buyer or seller and the buyer or seller can not provide instructions or direction directly to the broker’s agent. The last item we go over regards the Dual Agency (with or without designated sales agents). In this case that is when a real estate broker may represent both the buyer and the seller if both parties give their informed consent in writing. (I bet you thought you were confused before – LOL). If done with designated sales agents, the broker will assign one of the firm’s agents to the buyer and another to the seller.
Jon Angevine
October 12, 2008 at 11:26 am
Any clients that I have dealt with from the UK are really shocked and amazed at the amount of work that we do for them as Buyers. I get some interesting question and it is always an interesting conversation talking about how things are different here in Canada than in the UK.
Unless you have worked with clients from the UK moving to Canada then you do not have an understanding of how different it is. Thanks for the insite into the process on the other side of the pond!
Bob
October 12, 2008 at 12:29 pm
We used to do it that way here in the Colonies. You only sold your own agency’s listings. The reason the MLS was created was to facilitate a way to allow agents to cooperate with each other and get paid.
IDX changed that, and as a result, it changed public perception as well. The MLS is now viewed as the defacto database of all listings and not as just the vehicle with which to offer compensation.
Poppy’s video is an excellent example of why, to most consumers and 3rd party listing sites, It would seem natural that we would go full circle on this, but for another huge difference between the US and the UK – our legal system.
Matt Stigliano
October 12, 2008 at 12:53 pm
Poppy – Thanks for breaking it down for us. I’ve spoken to some of my friends back in the UK since acquiring my license and they are amazed at the complexity of the way we do things. One of my friends thinks the kind of client-oriented service we provide would be a welcome touch to the UK as he feels its all a bit impersonal. Of course, he spends a lot of time in the US for work, so he’s used to things like free refills at restaurants every five seconds. Basically, our country has spoiled him with our love of customer service.
Matt Richling
October 12, 2008 at 11:00 pm
Must admit, watching the video definitely helps me understand the difference. Oh and Poppy, your accent sells the whole process and makes me consider about getting my UK license. haha jking but where were you when I had clients from London trying to explain it to me?
Dan O'Halloran
October 13, 2008 at 6:24 am
Thanks for that Poppy, definitely explains why it took me a bit longer to explain the process to some clients of mine from London. I think people who have had a Buyer’s Agent in the US would find that it was an invaluable experience and having someone there to guide and advise you through the property search and purchasing process saves a lot of sleepless nights!
Poppy Dinsey
October 13, 2008 at 10:20 am
Ines – Hehe, glad you liked it! We’re definitely used to the big brands here, it obviously has it’s drawbacks as there’s no real pressure to work hard for your clients…your good name is not on the line.
Phil – Very sweet 🙂
Carolyn – It does seem confusing and like there are a lot of hoops to jump through in the US, but you don’t need any training/qualifications or anything to sell houses here…how worrying is that?!
Jon – You’re welcome and happy thanksgiving!
Matt – What’s funny in the UK though is that sometimes we hate too much customer service, we’re v.cynical people and so American over the top niceness may seem fake and cheesy here, whereas in America it’s standard practice. We love it when we’re there, but it’s not something I see coming about here any time soon 🙁
Matt Richling You’re too kind!
Dan – I don’t know, who pays the buyer’s agent? It seems like a middle man that you don’t really need to me, but that’s having grown up never having them in this country. I guess because your system is more complex, the qualified agents are needed to help. Here, the agents aren’t even qualified, so to add another unqualified middle man seems unneccesarry.
Jonathan Dalton
October 13, 2008 at 11:21 pm
Maybe I need to listen again, but it’s not too terribly different … sounds like pre-buyers agency still in effect. Which I suppose is good if you have a monarch. Not as much of a fan, but that’s another story.
The other difference is it sounds as if no one expects to be represented when they’re purchasing a property. That was one of the issues here. People though they were being represented only to discover that they weren’t.
John Corey
October 14, 2008 at 6:25 am
The differences are too easy to miss as some of the comments show.
1. There is no MLS. That means no central place to find all listed property. Granted the Internet has helped. As there is no MLS there is no co-brokerage. You cannot explain to one agent what you would like and have all properties matching the criteria pulled up. What you will get is what that agent’s office offers but nothing else. As there is no co-brokering there is no lockbox or the ability to easily visit when the owner is out.
2. The sales process means an offer is not binding. You tell an agent what you are prepared to pay and they tell the seller. Once there is an agreement you get to order a survey, arrange financing and do some other things that trigger costs. The seller can still back out. The buyer can back out. The costs are just wasted money if one or the other party backs out. The next step is to exchange contracts. The lawyers review the details and a deposit is paid. Up to this point you can see either party trying to change the verbal agreement (raise or lower the price agreed).
3. Lawyers represent the buyers and sellers. Solicitors if you want to use the local term. They help with the paperwork. They have no view as to the property, what is on the market or anything like that. Brits are used to not being represented by a buyer’s agent. Even in the US where both agents could work for the seller their advice can still help. Here you are on your own and the agent only knows their firm’s inventory.
The system in England and Wales does work. It clearly could work better. The idea that it was only 4 years ago that all sales had to be recorded in the public record means there is no history of price data. It takes 6 months before the Land Registry records a transaction and makes the data available. Hard to see what recent sales have been when there is no MLS and the recorded data is 6 months out of date. What do you do for comps? As a buyer how do you get any comparable (comp) data? Sellers can get an agent to offer a view based on their firm’s inventory but they cannot see the full market. The Internet does help with showing what is on the market but not what has sold.
4. There are no apartment buildings in the UK. What would be a condo in the US is called a flat in the UK. You can have a building with 50 units and most or all are individually owned yet rented. No need to make sure the building is 70% owner occupied. That can be bad for repairs and future value as landlords are not going to take the same view as owner occupants. Lots of other subtle differences.
John Corey
Real Estate investor in the US (25 years) and UK (14 years)
derherold
October 14, 2008 at 7:08 am
Nice video !
I´m a real estate broker in germany. I can say that the “german way” is comparable to the UK.
There is no MLS.
Offers are not binding. As John (#13) said, all costs during the process are wasted money until the seigning of the contract in front of a special type of lawyer, called “Notar”.
Buyers agents are not popular – so called “co-brokerages” are possible, if real estate agents were unsuccessful to sell a listed property to the potential buyer and try to find a “matching house” in the listings of different agents.
Difference to the UK: Besides commercial properties “brands” are not representative for real estate service. In germany the “corporational structure” of real estate brokerages depends on two businesses: bank controlled real estate service (“Deutsche Bank Immobilien”) and small offices you would call “pop-and-mom”. Here are some franchise systems for more than 15 years (for example ERA or RE/MAX) but their market share and “brand awareness” is way below their position in other countries.
Dan O'Halloran
October 14, 2008 at 7:10 am
Poppy – It’s easy to go on forever about all this so I’ll try to keep it brief. Here in New Hampshire the seller sets a predetermined commission with the listing agent for the property and that commission is typically split with whomever brings the buyer to the house. There are “buyers” who set up all their own showings and just go straight to the listing agent for each property they are interested in. In these cases the buyers will either represent themselves or enter into a duel agency relationship with the listing agent…in Duel Agency the listing agent owes completely confidentiality to both seller and buyer and cannot advise specific counter offer #’s to either party…The issue of agency can get even more intense, but hopefully above shines enough light on the nuts and bolts of it.
The need for a buyers agent–For example if you were to up and leave London and move to my town of New London NH, where would you decide to buy? How would you find the cool area’s with amazing views of the lakes and mountains? How would you know exactly what’s been happening in the area for values? How would you know if your home inspector does excellent work?
This is where the buyers agent comes in. Whether you are relocating, buying an investment property, or just locals who’ve grown up in the town forever, typically a good agent who is focused in that community will be able to open their eyes to properties that they didn’t even know about or were even an option.
Glenn fm Estero
October 16, 2008 at 3:37 pm
Poppy – thanks for the explanation of buying and selling a home in UK.
You mentioned Century 21 – are there other US based real estate franchises operating in the UK? Are those franchises trying to change things to be more like the US with a MLS?
@John – you did a good job of going a iittle further into detail.
Guy in Madison Wi
October 17, 2008 at 10:33 am
Poppy,
A great subject.It is really interesting to have an aquaintance in the industry, if I can call you that. My guess if that because there is no branding of agents, then the agents don’t usually do blogging and things to individually bring in business. Maybe agents are more like order takers and hence lower paid like employees.
I have an english accent, not as cute as yours, but I am from Bexhill Sussex. I hate the way real estate is done in the UK. The fact there are no written contracts, so once your bid is verbally accepted, the seller can accept another from another buyer and “Gazump” you, ie ditch you. This leaves the agent/industry looking tarnished.
Also there is no close date in the UK (until the closing date). You close when the solicitors get around to it and all ducks are lined up in a row. That could be 3-4 months. Here (US) when you get an offer accepted, you know the close date, and price. For a long time (until exchange of contracts i believe, correct me if I am wrong), buyers or sellers can just walk.
when I arrived in the US 15 years ago, I found out about Buyers agency. Exactly what you are saying is not good. I fell in love wiht the idea of taking someone around all the best available homes and working wiht them fright through to the closing. It is such a great experience for buyers and agents.
If you were buying in the US. From out of town. Wouldn’t you want a professional on your side? For example to tell you if the property is $10,000 over priced and to advise you on negotiations. Only a buyers agent can do that. Now instead of contacting every company to see the 6 homes you want to see, you just call your trusted professional, to see them all, you get an unbased assessment from one person who knows they will sell you something, but are not attached to any particular property. Do you see how that can benefit a busy professional seeking a new home?
Hope this sheds some light on your very interesting post.
Guy