Claire Killen’s sister recently sold her home in their native country of Ireland. Things did not go smoothly.
The selling process there, Killen explained, differs vastly from how it works in the United States.
“She had to do all of her own showings,” said Killen, a Minneapolis-based real estate broker and REALTOR® — a member of the National Association of REALTORS® (NAR). “People would knock on the door, and she had to show them the living room, the kitchen, the water tank.”
When her sister did land a buyer, she, as the seller, had to do a lot of the legwork before closing herself: making sure the buyer’s financing was approved, scheduling appointments with the surveyors (inspectors, in the U.S.), and coordinating with the lawyers. Finally, the sale closed — a whopping nine months after she had first accepted the offer.
In the United States, the process of buying or selling a home is much more streamlined, thanks to a consumer-centric real estate model that prioritizes equity, efficiency, transparency and market-driven pricing.
“Our market is very efficient, and there’s a lot of consumer protection built in . . . here whether you are a buyer or seller,” said REALTOR® Hanne Sagalowsky, a native of Denmark and a real estate professional based in Dallas.
Although fluctuating interest rates and other market turbulence can make home buying seem difficult at times, U.S. buyers and sellers have many advantages that consumers around the world do not — giving U.S. buyers a leg up in building long-term wealth through equity.
- Strong Representation for Buyers
Unless you’ve purchased a cottage in West Cork or a building in Bucharest, it’s easy to take for granted the representation that home buyers can access in the U.S. In many other countries, only sellers commonly have agents, which means the time-consuming tasks of finding available homes and contacting listing agents — not to mention negotiating and attending to dozens of details — are generally left up to house hunters themselves.
“You [as the buyer] have to deal directly with the seller’s agent,” Sagalowsky said. “The process is very much in favor of the seller.”
This lack of buyer representation can introduce uncertainty for both buyer and seller. In parts of Europe, for instance, property disclosures aren’t as common as they are in the U.S., where many states have disclosure laws, said REALTOR® Alina Aeby, based in San Francisco.
“[In Ireland], it is not the duty or responsibility of the seller to tell the buyer anything they know about the home,” Killen said.
Property disclosures protect buyers by alerting them to any issues with the property that could affect negotiations.
Without two agents managing the back and forth of the offer process, such as in Ireland, the seller’s agent may end up overseeing a bidding war between buyers who haven’t secured pre-approved financing, leading to offers that can fall through.
In the U.S., home sales take a median of 30 days to close, according to December 2022 data from NAR.1 But in some places abroad, because contracts aren’t always enforced until all the aforementioned work is done, another buyer can come along right before closing and outbid the original buyer for the home, a practice known in the U.K. as “gazumping.”
“[Home buying in other countries] is not a fast process,” Killen said. “It’s cumbersome, it’s clunky, and it’s uncertain for buyers and sellers.”
Further, in the U.S., real estate practice is government regulated — each state has a real estate commission, which requires professional education. That’s not always the case in other countries. “There are some countries where anyone can be an agent,” Sagalowsky said.
- Transparency Powered by Local Broker Marketplaces
The American real estate model is strengthened by a key differentiator: multiple listing services, or MLSs, which function as local broker marketplaces connecting brokers representing sellers with those representing buyers.
For U.S. homebuyers, these local marketplaces provide one centralized place for all listed properties in a given market, no matter which broker you work with. Brokers, despite being competitors, contribute and share listings to create greater access, transparency and equity for all consumers.
These local broker marketplaces also help first-time, moderate-income and other buyers achieve home ownership with equal access to up-to-date home status information, like price, property history, tax records, days on the market, and listing agent information. Much of this data gets pulled into the listing websites and apps where many buyers start their property search.
For sellers, local broker marketplaces increase the number of eyeballs on their property. And, they help create a more level playing field for large and small brokerages – as well as the consumers they serve – because brokers all have access to the same information.
“You can be a small broker out in the country and you still have access to an MLS, whereas in other countries, that’s not the case,” said Sagalowsky.
In countries that lack these centralized and cooperative databases, buyers become vulnerable to unverified and inaccurate property information. Aeby described scenarios in other countries where a property can be listed 10 times by different agents, all with somewhat different data. Without a single source of reliable information, sellers may not have an accurate estimate of their home’s value, and buyers can feel confused about how much to offer.
“As real estate professionals here [in America], we can go prepared for a listing presentation with the comparative market analysis [CMA], and [these] numbers speak volumes,” said Aeby. A CMA provides a fair market estimate of a property’s value by comparing it to similar homes in the MLS that have recently sold in the same area.
- The Reliability of the Fixed-Rate Mortgage
Then there’s the financial aspect. Americans who finance their home purchase can take advantage of the popular 30-year fixed-rate mortgage, which keeps payments static — and comparatively lower than shorter-term mortgages, which are more typical abroad. The fixed-rate mortgage helps create a stable market, insulating people somewhat from the turbulence of global economic conditions, inflation and high interest rates.
“It [also] gives buyers a sense of security,” Sagalowsky said. “They can plan; they can budget.”
“We have a lot of consumer protection [in America] when it comes to mortgages,” Aeby added. “You know exactly the terms of your loan and exactly when it’s due.”
Abroad, the fully amortizing, fixed-rate mortgage is more rare. Overseas consumers are more likely to get a variable-rate mortgage. In the U.K., for instance, when the Bank of England raised its primary interest rate in the summer of 2022, many homeowners saw a sudden jump in their monthly mortgage payment. 2
Consumers can run into other financing obstacles, too. In countries like Ireland, banks will typically look for higher percentage down payments from buyers, often 20 percent or 30 percent, Killen said — which can deter first-time buyers. (In the U.S., the typical down payment for first timers is 6%.3) Sagalowsky also pointed out that in many countries, unlike the U.S., banks own real estate companies, creating a conflict of interest.
- An Exemplary Model for Other Countries
Countries around the world envy America’s local MLSs and real estate practices so much that they strive to emulate them. The National Association of REALTORS® (NAR), through its bilateral partnership agreements with real estate associations abroad, helps those organizations implement systems and practices that encourage more professionalism, accountability and transparency. For example, Israel recently launched an MLS with the help of the Staten Island Board of REALTORS®, NAR’s ambassador association to that country.4
“[NAR] vets its [international] partners, and we make sure that the associations we have bilateral agreements with also abide by a code of ethics,” Sagalowsky said. NAR has formal relationships with more than 100 organized real estate associations in 76 countries.
Buyer and seller representation, accurate property data, process transparency and consumer-friendly financing all make the U.S. real estate model the gold standard, especially if you choose to work with an agent who is a REALTOR®. Purchasing a home, whether you move in five years or 30, helps build equity — and not just for yourself.
“People who are homeowners build more wealth for generations to come,” said Aeby. “I think that this is a global, universal message.”