I Wonder How They Practice Real Estate in China!

[photopress:world_map.JPG,thumb,alignright]Before I tell you why I’m blogging on this subject, I first want to tell you what I’ve been doing over the last months (instead of blogging). So I have an announcement to make. As I was building LTD Real Estate I studied several business models and I knew I didn’t want to build any of the traditional models like those I’d previously been associated with (the big 3). Along the way, I studied the RE/MAX model and liked it so well and the RE/MAX agents liked it so well, I decided to join the RE/MAX family. So today, I am officially RE/MAX Connected, Connected meaning not only developing internet marketing but especially here in the Pacific NW, where we do so much business with other Pacific Rim Countries and we all have so many European and Asian clients, too, so Connected also means connected to the world.

It wasn’t until my owner training however, that I realized what being worldwide means to a business. In my class alone, there were 6 countries represented, including Slovinia, Panama, Costa Rica, Dominican Republic, and Mexico. There was even a translation room for those that were non English speaking. It’s mind boggling to me to think of practicing real estate in a previously communist country. Apparently, when Slovinia joined the EU, they had to first license professionals, like attorneys, accountants, realtors, etc. The 20 something couple that bought Slovinia bought the whole country with a population just under 2 million. Slovinia is the first country that pulled out of Yugoslavia in 1991 after the fall of the Iron Curtain and so the young kids raised without Communism are now hitting their 20’s, have grown up on MTV and The Apprentice and been exposed to international trends and thinking and, of course, capitalism

So far, RE/MAX has only franchised non Communist countries but the company is now spending the next 6 months selling 30 divisions in China! I can not imagine what it must be like to work for profit in a country whose ruling party’s supposed ideology is anti-competition, anti-capitalism, anti-private property. Practices that we agents take for granted must still all have to be hammered out. Is there escrow or attorneys. What about disclosure? Is there such a thing as anti trust? Are the agents more or less controlled by government rules and regulations and will the new RE/MAX owners be allowed to develop their businesses without being taxed excessively? I wonder how Starbucks and McDonalds are doing. There is no private property in China. It’s all owned by the government who issues lands leases for up to 75 years for residential. The government issues the contracts, too. Who is being protected, buyer or seller in a lease transfer? I wonder if the title policies are simply a thread of lessees. Since there is no fee simple estate, what does a title policy consist of, just a leasehold interest? and I wonder how complete the records are. What will happen as a lease reaches it’s 75th year? ? I would think the lease value would diminish as the lease aged and make purchasing the lease much less lucrative than home ownership. I wonder if the lease has the ability to transfer via will, etc. Maybe a situation like Hawaii will occur where the leases eventually are sold by the (original) government to the current lessee. The typical agent gets paid 2% there, as a function of the lease value. I don’t know if you multiply the one year lease income by 75 and take 2% of that or not. Since there is no multiple listing service, agents must have to sell their own listings. If there is an inspection, does the state get involved with what the person holding the lease can and can not do? They do have lenders there, but loans are typically 5-20 years with 30-60% down. I’m especially looking forward to the direct referrals from China as agents at ReMax Guizhou! (Hope they speak English!)

Two years ago when I was in China at Christmas time I was amazed that all the large stores were featuring Santa Claus and his reindeer and having Christmas sales. I’m glad I’m living in this new world where previous enemies (some say still enemies, of course) have found a way to work together. Wouldn’t it be wonderful if the whole world was like that? I couldn’t find any mention of real estate agents in Iran. Wonder if there are any McDonalds. I didn’t see any in Viet Nam although they must be there. Maybe when that happens, the world will be a safer place.