Buying or selling a property in France is a lot different than in the US. Learn how US real estate works and how to prepare to be an American property owner.
Are you French and interested in buying property in the US? Before you start looking, it’s important to know how searching for and buying property differs from back in France. Be it for commercial or residential real estate, the fundamental difference between the US and France is how listings (mandats) are handled and the relationships and contractual obligations it creates. Let’s take a look.
Real estate listings
In the US, agents share listings. All real estate inventory is listed through a platform known as a multiple listing service (MLS) that is accessible to other agents. That means no matter what brokerage you work with, you will get to see all the properties for sale in the area where you are looking, not just your broker’s listings. And in fact, for residential real estate, agents are required by their state regulatory body (in California, this is known as the DRE) to publish their listings on the MLS.
Ninety percent of closed transactions are actually shared deals, with multiple agents representing the various parties. Typically, the buyer/lessee is represented by one agent while the seller/lessor is represented by another.
The benefits of the MLS and multiple agents
This system has been around in the US for a long time, and it truly benefits all parties involved.
Benefits
1- Sellers (or lessors) benefit from a greater exposure of the property they want to sell or rent.
2- It reduces conflicts of interest. Buyer and sellers each have their own agents with clear fiduciary duties who will negotiate the best deal for their client.
3- A public inventory of properties clearly benefits buyers with a wider range of choices and real-time information.
3- This transparent real time information allows buyers and sellers to make educated and well-informed choices about sales price, terms, and more.
4- This system also shares information across multiple submarkets, allowing for greater comparison.
5- The system creates a greater and faster rotation of transactions, thereby increasing commission volume for agents.
How are American real estate agents paid?
Agent compensation (in the form of a commission) is almost always borne by the seller (or lessor). If you are buying a property in the United States, you will most likely not owe your agent a dime. A listing agreement always contains a clause stipulating the commission for the transaction and how the agents will split it. Buyers (or lessees) almost never have to pay for the services of their agent. That’s good news for you!
Why you should work with an agent
In the US, real estate agents must abide by a code of ethics and have a lot of important duties and responsibilities that vary depending on the side they’re representing. As discussed above, when two agents who are experts in local laws, real estate procedures, and common challenges, they ensure each side gets the best deal for them, resulting in a fairer transaction for everyone. Commercial and residential agents have different responsibilities, we we’ll cover those in another post.
Author : Franck MORINEAU
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