The multiple listing service in Warsaw, Poland, only lasted one hour.
Janet Choynowski told Inman that she started working in Poland at the end of the Cold War. A number of American companies soon found her and hired her as a consultant as they searched for property, and by the mid 1990s she was running a brokerage in Warsaw.
But coming out of communism meant that Polish real estate wasn’t as developed as the U.S. industry.
“They had no rules around the trade of private property, there having been no private property,” she recalled.
One of the things that Choynowski said was particularly lacking at the time was a multiple listings service (MLS). The result was multiple agents representing the same properties, agents who were unwilling to share information, and a “thicket” of confusion that hamstrung the real estate industry.
By the late 1990s, Choynowski and others in the area had finally convinced the entire Warsaw real estate community to come together and create an MLS, with “even the most arch enemies seeing the plus there.” It was around 1999, and everyone got together in a local Marriott ballroom. Then the leaders of the gathering began going through the listings.
“In the cases where one person had one listing, then that was your listing,” Choynowski said. “But where seven of us had the same one, we had to draw to see who that one was going to belong to. They would put it in a box and mix it up and pull it out. They went through every listing that was for sale in Warsaw.”
The meeting dragged on for two days, and agents literally refused to leave the ballroom the entire time lest a rival come in and scoop up their listings.
“No body would trust anybody,” she said. “If you leave, you’re going to get cheated.”
After days of sorting, finally the Warsaw real estate community brought order to the chaos. Listings were organized and an MLS was born. And then, one hour later, it fell apart.
“One of the brokerages in town downloaded the entire MLS,” Choynowski said. “They took a copy of it and then said, ‘we’ve thought about and we’ve decided this isn’t for us.’ It was the end of the MLS. There was a free for all.”
Choynowski eventually sold her Warsaw brokerage to investment giant CBRE, but today she still works in international real estate as the founder and CEO of training, data and technology firm Immobel. And she said that in all the intervening years, not a lot has changed.
“It keeps a lid on the profession in a way,” she added.
Choynowski’s tale of the “one hour MLS,” as she called it, comes from just one country.
But the episode also highlights the way real estate in much of the world operates very differently compared to the U.S. To get a better sense of what some of the main differences are, Inman recently reached out to agents and industry leaders across the globe. And while every place has its strengths and weaknesses, the consensus from these conversations was the some of the biggest things that differentiate the U.S. from other countries are MLSs, agent compensation and cultural attitudes that shape agents’ relationship to both work and their listings.
The MLS and exclusive listings
Again and again, the real estate professionals who spoke with Inman for this story pointed to a lack of MLSs as one of the primary differentiators between the Anglophone North America and other parts of the world. For instance, Phillip Gagnon works in consulting and franchise servicing and has focused on France. And he said that despite trying, the country still doesn’t have an MLS.
“They’ve been working on it for 25 years,” Gagnon added.
Peter Schravemade — an Australia-based former broker who now works for real estate imaging firm BoxBrownie, which serves agents in multiple countries — made a similar point. He said Australia has a popular News Corp-owned portal for consumers, but no MLS that syndicates listings to the portal. As a result, the portal itself is expensive for agents to use.
“What’s the cost of putting something on the MLS? Well, you pay a yearly fee,” Schravemade said of real estate in the U.S. “I hear complaints about putting listings on multiple MLSs, but here we have to sacrifice our first born child to put our listing up.”
“It’s not user friendly,” she said. “In Colombia, what I noticed is you can’t search by city. It’s not a smart MLS.”
Jon Sterling — who worked on the launch of Keller Williams in multiple countries and today is based in Tbilisi, Georgia, running international real estate firm Espatriati — said these kinds of conditions are common throughout the world.
“There is no MLS anywhere else I have found in the world (with a few small exceptions in Mexico where they serve mostly American clients and have licensed US MLS software),” Sterling told Inman in an email. “Even with the exceptions, the MLS has no real ‘power’ to enforce cooperation for the purposes of sharing commissions other than the threat of banning the offenders from the system.”
One of the results of not having an MLS is that listings in many other countries tend not to be exclusive the way they are in the U.S. Most of the people who spoke to Inman for this story also said this situation results in less cooperation among industry professionals. And agents in other parts of the world tend to focus more intensely on sellers than buyers.
“You can’t go to an MLS and just search listings,” Gagnon explained of the focus on sellers rather than buyers. “You really don’t have anything to sell.”
This may all sound alien to North Americans, but the industry continues as is in many parts of the world because consumers support it that way.
“People don’t want to sign on for exclusive representation,” Alspaugh said. “They believe that signing a representation agreement will have a negative impact because other agents will not show their property.”
None of this is to say that any one system is inherently better than the other. But the industry members who spoke with Inman for this story did tend to overall be fans of the MLS system in the U.S.
“The lack of an MLS/cooperation system is bad for consumers. It’s like turning back the clock in the U.S. before buyer agency became a thing,” Sterling said. “Buyers have to talk to a dozen different brokerages (and get on a dozen email lists) to get an idea of all the properties on the market that might fit their needs, and sellers like to list with multiple agents because there’s really no advantage to giving a listing agent an exclusive listing when you have to rely on that one agent and that one agent’s database to sell the property.”
Another big difference between the U.S. and other parts of the world that many industry members mentioned for this story was the level of entrepreneurism.
“It’s a much less entrepreneurial environment,” Gagnon said of French real estate. “That mindset just doesn’t happen.”
Some of this difference may be a result of varying cultural attitudes.
David Hennessey — founder of ESREA France, which connects people to English-speaking French real estate professionals — told Inman in an email that “a good comparison with North America is that many French agencies are closed on the weekend or only open by appointment on Saturdays.”
“I do not think I have ever seen an agency open on a Sunday and yet a lot of people in France work Monday to Friday and are only available on the weekend to view property,” Hennessey explained.
All of which is to say that in some parts of the world there are simply different attitudes about how people should balance work and life.
Sterling agreed that cultural differences may explain a relatively low level of interest in entrepreneurism in other countries. But there may be other factors as well, such as the high cost of living in places like the U.K.
“It’s so bloody expensive to live there that people cannot go without a steady paycheck for a few months in order to launch a new business and simultaneously keep their homes, spouses, etc.” he said. “The fear, uncertainty and doubt over there is widespread and prevents many from taking any risks.”
In other cases, the entrepreneurism that does happen is more cutthroat.
Choynowski said that when she was running her brokerage in Poland, she discovered some of her agents had secretly set up a rival office across town and were paying off the receptionist at the main office to redirect leads to their clandestine operation.
“They had copied our database of listings,” she said. “In a sense they’re robbing the company blind.”
Over time, Choynowski learned that she had to install security cameras in her office and eavesdrop on agents in the break room to find out who was planning on cheating the company — measures that weren’t particularly out of the ordinary for Poland at the time.
“It was a walk on the wild side,” she recalled. “It was a cut throat environment in a lot of ways.”
One of the factors that stops this kind of thing from happening in the U.S. is agent licensing, as well as rules laid out by organizations like the National Association of Realtors (NAR) — both of which are also relatively unique to North America. But other significant parts of the equation include cultural attitudes about work and cooperation.
Commissions and prestige
Everyone who spoke to Inman for this story said agent pay tends to vary significantly from country to country. For instance when Alspaugh sells a property in Belize, she sometimes earns a 10 percent commission. In Colombia, on the other hand, commissions tend to land in the 3 percent range.
Gagnon said commissions in Europe also tend to be lower than in the U.S, and Schravemade made a similar point about his home country.
“Agents are paid less than their American counter parts,” Schravemade said.
On the other hand, because agents in many parts of the world focus on only listings, rather than buyers, they double end most of their deals.
Schravemade went on to say that agents are viewed very differently in different parts of the world. He noted that in the U.S. being a real estate agent is a respectable profession, and NAR even has the clout to get sitting presidents to speak at events.
“They’re not necessarily viewed as dodgy bastards there to take your money,” Schravemade said of U.S. agents.
By contrast in Australia, agents have less prestige. Schravemade said that if an agent showed up to a neighborhood barbecue he or she would probably try to steal the conversation away from their profession.
“I don’t believe anyone actually enters the real estate profession as a chosen industry unless they were born into it,” he added.
Schravemade noted that there are plenty of ways for U.S. real estate to evolve as well, such as more integration of services such as property management and agents upping their marketing game. No place is perfect, or fundamentally superior.
But whether it’s commissions or MLSs or simply public standing, the consensus is that real estate in the U.S. is unique.
“I personally think that what we have in the U.S. is better for everyone,” Gagnon concluded. “It’s because it’s more competitive. And when there’s competition in the market it benefits consumers.”