Published by the CIPS Network of the National Association of REALTORS®
Third Quarter 2008
A New Standard for Ukrainian Real Estate
By Arthur Ohanesyan
While Ukraine works towards President Viktor Yushchenko’s stated
strategic goal of joining the European Union, the Ukrainian Realtors
Association (URA) works to create a real estate industry able to do business
in the way understood by the rest of the world. As my American
colleague Tony Creed said “It is hard to comprehend the way real estate
is conducted in Ukraine if we look at it from a Western perspective.”
The Question of Listings
To begin with the basics, one of the central organizing methods of a well-
structured real estate industry is the Multiple Listing Service (MLS) as established
in the U.S. The URA has been working to educate real estate practitioners in the
many benefits of such a system. As part of this effort, I created a class for
Ukrainian Realtors entitled “The Effective Sale of Realtor Services to The Owner
of Real Estate or Why a Client Pays Us Commission” to educate them on the subject.
In the three years since I began teaching this class, more than 1,200 Realtors
from 17 cities in Ukraine, Russia, and Armenia have attended this class, learning
about this central principle of the real estate business, common in the U.S., but
unknown in the post-Soviet real estate market. This June, the regional board of
the Association of Realtors in Ternopol, Ukraine sponsored a two-day master
class, which was the 50th class I have conducted on this topic to date.
Currently, the most urgent question facing Ukrainian Realtors is how to create an
exclusive commissioned listing with the seller. In my master class I not only share
my 15 years experience of successful real estate transactions, but I also explain
every step of my interaction with the client in a comprehensible manner. I use the
success of my global practice, which resulted from the contacts and information
gathered in my work as URA Liaison to NAR and as president of CEREAN, to
illustrate the value a sellers agent can bring to a property transaction, and that the
buyers agent can benefit greatly from the help of skilled, ethical partner in the
transaction.
“We Don’t Sell Real Estate”
Up to now, property owners in Ukraine and Russia have not paid commission for
Realtors to help them sell their property. Real estate agents have received
commissions from buyers for information gathering, document verification, legal
follow-up, and a guarantee of safety in the transaction. Some leading real estate
agencies even use this slogan: “We don’t sell real estate; we help you buy it!”
This is a new concept for attendees at my classes and it is still met with strong
opposition from the students. The idea of an open and transparent market and
collaboration between ethical professionals is met with objections like “The mentality
of our consumer is entirely different, and this American technology is not
going to work!”at every class. But, my goal is to provoke the participants to
debate and bring up those unpleasant questions, asked by clients, and then
respond to all of their objections. It works.
Enter the “Middleman”
Slowly, the concept of paying commission to a sellers agent (a “middleman”) is
gaining acceptance.The average price for an apartment in Kyiv currently exceeds
$200,000 and a Realtors commission is paid.When buyers ask why they should
pay a commission to a middleman, there is a simple answer—because information
about available properties is more and more accessible, and there is a growing
understanding of the value of skilled marketing of houses and apartments. Also,
legal representation by qualified lawyers is much more affordable, and awareness
raised by a series of serious scandals on the real estate market have made it virtually
impossible to be sued for fraud committed by a third party.
We Enter the Future
So, where are all these changes leading? Although there is still much fraud and
resistance to the idea of exclusive listings and ethical standards for real estate
practitioners in Ukraine, we are making progress.The more than 1,200 real estate students who have attended my classes form the nucleus of a new real estate
industry in Ukraine. Just listen to some of my students:
“This is very captivating, interesting information that breaks the stereotypes
that Realtors carry.”
“It reversed all my approaches to dealing with a client.”
“There is no doubt that I will start working in a new way! The exclusive
with the sellers is great!”
“I’ve received answer to the main question: Why do I get a big
commission?”
“I appreciate it when the trainer tries to help every participant to
become successful with civilized methods.”
“Everything was fascinating! The future is with it; we can simply make
more money and sleep soundly!”
It’s a Beginning!
Our problems won’t be solved with the new laws regarding Realtor activities.
They will only be resolved if we change the technologies we use daily. It’s as simple
as this Golden Rule: “Whatsoever ye would that others should do to you, do
you even so to them.”
We have new cities, agencies, and encounters to come. There is no stopping us
now! gp
by Arthur Ohanesyan, Ukrainian Realtors Association
Arthur Ohanesyan, Parker-Obolensky, Kyiv, Ukraine, is First Vice President and Liaison to NAR for the Ukrainian Realtors Association. Reach him at arthur.ohanesyan@parker-obolensky.com.
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