Information Brokerage vs Brokerage Service

This is one of the anomalous transactions in real estate that is very much closely associated with multiple agent scenario.

Information Brokerage is a scenario wherein the agent A tells agent B that he has a nice listing. Then agent B tells agent C that he has a nice listing. The same story goes on the buyer side wherein agent D tells agent E that she has a buyer. Then agent E tells agent F that she has a buyer.

In that case above, only agent A has listing agreement with the property owner, and only agent D has engagement agreement with buyer. Hence, agent C and agent D are in the business of Information Brokerage.

There are documented worse incidents when either or both agent A and agent C has no engagement agreement with their respective “seems to be” clients.

Information Brokerage is the anomalous business of most real estate agents, licensed or unlicensed. This is the root cause of multi-layer agents sharing the commission and perking up of prices. Agents pretending as buyers or pretending as sellers normally use this technique to play with fire in evading the RA 9646. This technique is hard to understand only done by people who are extremely good analytical skills and evasive maneuver. Most of the times, when the execution of this technique goes wrong, this multi-layer agents who broker information violate the code of ethics because the individual offers properties without agency agreement from the client. Information Brokerage will naturally disappear when the Online Philippine National Listing is up and running at full swing to be operated by the so called Integrated Professional Organization of Real Estate Practitioners in the Philippines (IPORESP), which is supposed to be formed before the end of January 2010 but we are not yet feeling any sign of it because of possible hijack that I can smell.

Soon, a perfectly open market shall rise, wherein real estate brokers will no longer make money in the awkward business of hostaging the contact information of buyers and sellers, brokering information of buyers and sellers, or pretending to be buyers and sellers. In the new open market scenario, a new breed of brokers shall rise, and the old ones reborn, to provide professional services in guiding customers through the correct processes and provide negotiating services that bridges the opposing prices of well-informed buyers and sellers.

The impact of the PNLS in the long run is that buyers and sellers will directly find and match with each other quickly. This will naturally eliminate information agents who claim shares of the commission for merely "finding" the buyer or seller. In a free market scenario where rules in the service will become loose, the only broker who will most likely survive is the one who can provide "equal security" to both sides, good reputation of excellent documentation assistance, professional services, lower professional fees and commissions, and most important is returns of wealth to social-welfare projects -- and these would be the exclusive buyer agents, the for-sale-by-owners (FSBO). So, to prevent the extinction of the real brokers, a strong brokers "union" should be established and the IPORESP is the only material organization for this purpose.

No comments: