By Boris Goldshmit
Here is part 3 of Boris’s article, with advice on how to hire a suitable real estate agent in Brazil. To read the previous parts click the link at the bottom of the article.
Taking on a listing
In order to publicly advertise a property for sale (newspaper ads, web site listings, etc) it is necessary for a broker to have an exclusive listing contract.
It is a very unfortunate fact that in many cases brokers do not bother to get exclusivity nor take any steps in order to investigate or even to visit a property they are expected to sell.
In the ideal case, the broker would obtain exclusivity (lack of MLSs, competitive market, and poor working relationship with the public often result in properties advertised by a number of brokers/agencies with different prices), visit the property and conduct preliminary due diligence investigation.
Such investigation should include obtaining historical title extract (Certidão Vintenria AKA nus Reais), and any additional documentation that could shed light on the legal status of the property and its owner(s).
It’s been estimated that about 40% of properties currently on the market in Brazil have some issue with the title. Confirming that the person selling the property is actually the owner and there are no any other immediate irreparable impediments to the ownership transfer should be one of the first steps of preparing a healthy listing.
The broker should make at least one visit to the property to confirm and investigate its location, integrity, and peculiarities. It is imperative to speak with the owner, neighbors, sindico (condominium administrator), and any other source that could potentially provide valuable information that could not be found on legal documentation about the property.
As a client you can contribute to increase in professionalism and combat of informality on real estate market by always making sure that the real estate professional you are working with is legit and that all the necessary preliminary steps have been taken before visiting a prospective property or allowing your property to be listed.
The state professional association – CRECI (Conselho Regional de Corretores de Imóveis) – can offer little but a professional reprimand and judgment by peers.
Hiring a broker
Technically, a client/broker relationship begins with the signing of a listing or a service provider agreement.
The set of contracts that can be signed between a broker and a client is generally known as: CONTRATO DE INTERMEDIAO IMOBILIRIA (Real Estate Brokerage Service Contract.
The following types of contracts are recognized:
CONTRATO DE INTERMEDIAO IMOBILIRIA PARA FINS DE VENDA – Listing Contract
CONTRATO DE INTERMEDIAO IMOBILIRIA PARA FINS DE COMPRA – Buyer Agency Agreement
CONTRATO DE INTERMEDIAO IMOBILIRIA PARA FINS DE LOCAO – Property Rent Authorisation
CONTRATO DE INTERMEDIAO IMOBILIRIA PARA FINS DE PERMUTA – Property Barter Authorisation
CONTRATO DE INTERMEDIAO IMOBILIRIA PARA FINS DE ADMINISTRAO IMOBILIARIA – Property Administration Agreement
Despite the fact that a service contract is obligatory (by professional and legal standards) between a client and a real estate broker, there have been numerous cases where commission rights had been granted to a contesting broker even when no such contract existed.
Part 4 next week…
Previous articles by Boris: