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Why the U.S. real estate Brokers succeed more?

Posted by admin on 03/08/2018
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Why the U.S. real estate Brokers succeed more?

The US is certainly a world role model in the brokerage real estate field, becausethe working method used in America (which differs substantially from the one used in Israel), achieves high success rates, which brings 90% (!) of the Americans to use Brokerage services.

  • In the US, in most cases,there is no way that the same broker represents both the seller and the buyer (= the individual representation method). However, In Israel it is possible and even recommended (then the mediator becomes actually a "double agent")!.
  • In the US, owners of real estate networks understand that as a result of the opposing desires of a seller and a buyer, the mediator must locate the opposite customer via/by his colleagues (= cooperation), and this must be done immediately. By that: if the broker represents the seller exclusively – he can reach maximum buyers and by that can maximize the price, and if the middleman represents the buyer- he can reach maximum assets, and by that can minimize the price. In Israel on the other hand, the cooperation (if exists) is a delusion!.
  • In the USA the possibility to enter the brokerage world is significantly harder than in Israel:

BROKER – Owner of a brokerage office: The U.S. requirement is to have a seniority of work as a real estate agent, he goes through a special training course, after passing the course he will receive a certificate that declare him as BROKER, and he must also obtain a real estate brokerage license.

In Israel on the other hand, to become an owner of a real estate brokerage office does not require any regulatory obligations, in fact - in Israel anyone can serve as an owner and a manager of a brokerage office, and even hire and operate real estate agents.

AGENT – the American Real estate agent must undergo a special training + pass a test, and must have a real estate license.. In Israel only brokerage license is required, in order to act and work as a real estate agent.

  • Firm size, the success rate and the method of recompense:

An average American network Realty office consist of approx 80 agents - this fact, together with a high score of success and the the fact that most of the Americans (90%) use brokers/agents to sell or buy properties, allow the franchisee (the Broker) to pay his agents success fee of 70%-80% from the total brokerage fee.

Network office in Israel, however, since it consists in average 10 agents, and because the success score is relatively low , the success fee the broker can economically pays his agents does not exceed- 50% only.

  • Because of the high score of success in the US of closing deals by realtors, and the relatively high success fee (seventy-eighty percent of the total brokerage fee), the average seniority of an American Real Estate Agent working in an chain office is 5 to 10 Years.

In Israel on the other hand, due to the relatively low success score of closing deals and low success fee (fifty percents), the average tenure of a real estate agent is between a year to a year and a half only. The fact, that the departure rate is so high, makes it very difficult for the Israeli franchisee to survive commercially and financially .