The Image of Israeli Brokers
Jacky Mukmel, 28/10/2009
Brokers' offices worldwide are diversified agencies that engage in a wide range of activities in addition to brokerage, including consulting, valuation performed by their in-house assessors, management, and maintenance. The scope of these engagements has bestowed upon the agencies and the brokers a significant status in the business world, making brokerage offices worldwide pivotal in the handling of real estate matters by any self-respecting company – banks, insurance companies, and private business, large and small. At present, the overwhelming majority of financial organizations and high-tech companies use commercial real estate brokers to obtain professional advice before purchasing or renting property.
The status of the Israeli brokers is radically different from that of their colleagues abroad. There are several reasons for this difference, not all of them having to do with the brokers' abilities, professionalism, or integrity. One of the central problems is the lack of freedom of occupation of real estate agencies in Israel, especially of commercial real estate brokers. In contrast to western countries, where brokerage offices employ their own assessors, the law in Israel restricts this practice.
The law was passed in the beginning of the 1990s, in the wake of the large immigration wave from the former Soviet Union, and it was intended to protect new immigrants from attempts to defraud them. Although the law addresses primarily issues having to do with residential real estate brokers, it applies across the board to all brokerage firms, including commercial ones. The justifiable objective of protecting the weak from swindlers can be accomplished by applying the law to residential brokers alone.
It makes sense to release commercial brokers from the restrictions of the law and grant them freedom of occupation in their dealings with large and powerful commercial enterprises such as banks, high-tech companies, insurance companies, and provident funds. This change nature would bolster the status of brokerage firms, and real estate activity would become more professional and attract more foreign investors. There are many professional brokers in Israel who accumulated a great deal of knowledge and experience, global contacts, and professional abilities that can help them predict correctly the trends of the real estate market.
An additional factor that prevents Israeli brokers from achieving a higher status and more prestigious image is their ability to charge a fee from both sides of a given transaction. As a result, many large organizations treat brokers as untouchables. The law should be changed so that brokers are allowed to represent only one side in a deal, similarly to layers and assessors. This correction, together with removal of the restriction of areas of occupation in the work of brokerage firms, would enhance the status of brokers in the eyes of the Israeli public, and place them on a par with their colleagues in London and in New York. |