A World Without Real Estate Brokers?

Imagine a real estate market where no one had a license to help others buy and sell properties. At first, this might sound like a good way to avoid the extra expense of hiring a real estate agent. When you look a little closer, though, it becomes obvious that a world without brokers would turn into chaos.

What’s a House Worth?

Real Estate Worth

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Cuba recently made it legal to buy and sell real estate. Currently, there are few regulations and no licensed real estate agents. As the people try to understand this newly created market, they often find themselves confused about the value of property.

Many “real estate agents” have taken advantage of this situation by offering to help people explore their buying options. By charging high prices, the agents stand to make more money. Without experts who can guide buyers and sellers, who can say how much a property is really worth?

Bribes and Secret Deals

Real Estate Deals

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Since Cuba doesn’t have a regulatory agency to oversee real estate agents, people filling the positions aren’t bound by any rules. This means that bribes and secret deals have become common within the new market.

Some people claim that they have paid bribes to avoid extra taxes. Others say that real estate entrepreneurs have made deals that appear mutually beneficial. Without a regulatory agency, though, it’s difficult for anyone to know whether the entrepreneurs will follow through with their promises. They could just take advantage of less-affluent people to gain more wealth and power.

No Training, No Resources

Real Estate Training

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Real estate agents in the United States must undergo training and pass tests to get their licenses. This helps ensure that the agents understand regulations, but it also means that they know more about the resources that they can use to help clients.

In Cuba, real estate agents don’t have any training. To make matters even worse, they don’t have the kind of resources that American realtors use. At best, Cuban real estate agents might have street connections that help them identify properties recently put up for sale. In the U.S., though, agents have databases that tell them all they could need to know about properties.

What Are Buyers Really Buying?

Buying Real Estate

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For over half a century, all property in Cuba has been owned by the government. Individuals could not own their own buildings. Unfortunately, the Cuban government didn’t take care of the property that it technically owned.

Many of the homes in Cuba have fallen into disrepair because the people living there don’t have enough money to maintain them. This means that most buildings have unknown pasts that could include serious structural damage. Buyers, however, might not know about these problems until they have already purchased the properties. Without reliable resources and trained agents, they have no way to access the information that they need to decide whether they want to buy certain properties or not.

The next time you complain about an individual real estate agent, stop for a moment to think about how regulations and licensure protects buyers and sellers in the United States. Cubans might have more freedom now, but they don’t have those protections.

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