US buyers used to operating in real estate markets governed by a Multiple Listing Service (MLS) are often surprised when they start to explore property opportunities in Nicaragua. In this article we set out the key implications and what it means for buyers.
1) As there is no MLS, there is no single source of information on properties available for sale. So while in the US it’s possible to walk into a real estate agents office, or visit their website, and access a complete list of properties for sale that meet your criteria, this is not the case in Nicaragua.
2) Each real estate agent in Nicaragua effectively operates their own listing database. Sometimes even different agents within the same firm will have different listings. There will be some overlap of course but don’t expect to be able to build an understand of what is available for sale from just one agent or firm. Remember also that the market is unregulated with not all listings are held by a ‘formal’ real estate agent. Your taxi driver, hairdresser and hotel receptionist will likely have a set of pocket listings they will be delighted to show you.
3) In fact all listings in Nicaragua are effectively pocket listings. Very few are exclusives. You’ll often find agents playing hard to get with their listings – for example not providing any location information on online listings – for fear that another agent will be able to locate the property and list it themselves.
4) Although some real estate firms will collaborate with each-other, in practice this behavior is quite rare. Furthermore agents are more motivated to sell a property they have listed for a full commission than collaborate with another agent for a split commission (especially when there are no checks and balances in place to ensure they would get paid if a sale eventuated).
5) Without a central database of properties that all agents can access, and given the lack of collaboration between agents, it makes little sense for buyers to grant an exclusive to an individual real estate agent. This also has significant implications for sellers.