Recent detractors of the U.S. local multiple listing service (MLS) broker marketplace model misrepresent or fail to understand why other countries around the world seek to emulate it. As a broker of more than 25 years in Israel, and founder of Israel’s first-ever local broker marketplace, I have seen first-hand the consumer benefits and increased competition that come with how U.S. real estate works.
The majority of homes in the U.S. are listed on local broker marketplaces, which offer the widest pool of buyers for sellers and a comprehensive database of available properties for buyers. Alternatively, in Israel, we don’t have centralized databases, and listings are often shared between brokers via WhatsApp groups, which opens the door to various issues regarding transparency, accuracy, reliability and access.
For the U.S. to regress to what some would advocate for in the disorganization, inefficiency and lack of transparency of markets like Israel would not only be a major step backward for U.S. consumers, but it would also hinder other countries that are trying to adopt a model we all know works best – the local broker marketplace model.
Let me explain.
In Israel, there is a large problem with ensuring the transparency and accuracy of listings, mainly because 60% to 70% of transactions are made without brokers. That means listing data is not submitted or verified by professionals, so it can be incomplete, inaccurate and in some cases misleading or fake. These unreliable listings are then advertised via Facebook ads and emails, which can also include incomplete or fictitious information.
Ultimately this hurts consumers, who have a much longer and more stressful buying experience as they try to decipher which listings are accurate.
Another major issue with the model in Israel is that while real estate agents legally must provide all the information they know about a property, we typically have less information than what agents are accustomed to in the U.S., partly because there is no centralized location to upload and update listing data.
In the U.S., local broker marketplaces store an abundance of listing information, including critical facts like property layout, dimensions and previous transaction history, and are a place where listing information can be updated or added for posterity.
The common use of WhatsApp to share listings among Israeli brokers is another practice that hinders consumers’ ability to weigh all their options and make an informed home sale or purchase. In Israel, brokers and real estate professionals create WhatsApp groups to publicize listings among other brokers who may have interested buyers.
While this practice seems convenient, it severely limits who has access to certain properties and does not ensure data is accurate or uniform, making it much more difficult to serve and guide home buyers and sellers.
For example, there is no way of verifying listings shared via WhatsApp, meaning it’s common to find fake listings in those chats. These groups have no regular cadence of being updated or maintained, leaving many out-of-date and sold listings still visible as properties for sale.
Also, WhatsApp is far from a professional place to conduct business. How would you feel if the largest purchase of your life was conducted on a messaging app? Personally, I think that if you’re paying for a professional broker, you deserve the highest level of service, with tools and processes designed to facilitate the transaction.
Lastly, transactions typically take three to four months in Israel, which includes the time from getting an exclusivity agreement to handing it off to lawyers to finalize.
On the other hand, you can typically expect closing on a house to take 30 to 45 days in the U.S. As of September 2021, the average time to close a home purchase was 50 days.
In the U.S., these pitfalls are avoided because of local broker marketplaces that ensure accurate, up-to-date and verified listing data. While listings can still be shared via Facebook or WhatsApp, they are also verifiable via local broker marketplaces, which most international markets lack. In local broker marketplaces, participants set and agree on how to input and maintain listings in the database.
This agreed-upon protocol provides an additional layer of transparency and reliability for listings consumers wouldn’t have based solely on Facebook, WhatsApp or email advertisements.
Local broker marketplaces in the U.S. make the buying and selling processes more efficient due to the centralized nature of listings, which helps result in quicker closing times. There isn’t as much information available in Israel, meaning consumers have to spend extra time searching far and wide to find the right property.
In the U.S., this is all cut out by having a local broker marketplace that has all the available listings and data in one convenient place.
Local broker marketplaces promote professionalism in the real estate industry because they allow the broker to provide the highest level of service, largely enabled by the comprehensive data they store. Local broker marketplaces also ensure all consumers have access to the same, accurate and reliable listings, regardless of which broker they work with.
These are the main reasons why I think the introduction of local broker marketplaces is a step in the right direction for our housing market, and why many other countries are looking to adopt it.
As someone who has studied the U.S. model and found it preferable to ours, I can confidently say Americans should not take this for granted. Imagine consumers getting possibly fake home information. Imagine consumers not knowing if home information is current.
Imagine consumers getting a fraction of the details they’re looking for about a home they want to purchase. This could be your new reality. Appreciate and defend what you have because you don’t realize how good you have it.
Assaf Epstein is the founder of Israel’s local broker marketplace, chair of the Chamber of Real Estate Brokers Jerusalem and vice chair of the Chamber of Real Estate Brokers Israel.