InternationalLiving.com

Beware the markets of the Wild Wes

By Lief Simon

Real estate agents outside the States are nothing like their U.S. counterparts. Over the years, I've come to think of them as carpetbaggers. Often, that can be the kindest way to describe them.

Typically, they're gringos. Full of energy, good talkers, poor listeners, with strong opinions, and ready to sell you anything they've got on their books. What you're actually in the market to buy is an irrelevant detail. The point is to make a sale at any cost. They're protective, competitive, and in it only for themselves. They don't work for the seller they seemingly represent…and they sure don't work for you. They work for the commission.

They're able to thrive in largely unregulated Latin America. These are Wild West markets where you not only have to work to put a buyer together with a seller, but you also have to make sure you get credit for making the connection. These guys quickly learn to watch their backs.

Anyone can join their ranks. Identify a piece of property for sale and convince the owner to pay you a commission if you find a buyer. Voila, you're a real estate agent in most Central and South American countries. You don't need to take a test. You don't need a license. You don't need to register with anyone. You don't need an office. You just need to find a buyer.

Once when addressing a group of readers at an International Living conference, I made this point for the audience. I gave the example that the guy presenting himself to you as a real estate agent in, for example, Honduras, could have, the day before, been, say, a travel agent back in the States. He showed up that morning and declared himself a real estate agent. In the back of the room, some guy stood up loudly and walked out abruptly.

Turned out, he was a real estate agent from Honduras, who (guess what) had been a travel agent in the States before moving to the island of Roatan.

Not all gringo real estate agents in Third World emerging markets are bad guys, but you have to remember the critical point, as I've explained: They don't work for you, the buyer. In fact, there is no such thing as a buyer's agent in most markets. Listings are not proprietary, so anyone can sell anything as long as he can get the seller to pay him a commission. And the commission is the only thing these guys have any loyalty to.

How do you protect yourself? Ask how long the guy has been selling real estate and also how long he has been trading property in the particular country where you're shopping.

In addition, you can seek a reference from your attorney. Assuming you are working with an attorney you trust, he can be a good source of information about local agents. He's probably worked with most of them at some time in the past.

Third (and this is important), don't feel like you have to buy whatever the agent feeds you from his property listings. If he isn't showing you what you want to see, tell him. If he doesn't have what you are looking for, ask him to contact you when he does and move on with your search. Professional agents will follow up when they have what you asked for. The fly-by-night ones won't give you a second thought and will move on immediately to push the listings they have to the next guy.

Finally, speak with as many agents as possible in the area where you're looking. Remember, listings aren't shared. Each agency in town will have its own. Also, the same listing, while not "shared," may appear on the books of more than one agency…but not necessarily at the same price. So, to get a real idea of what's available, you've got to speak with several. IL