World-Wide Consortium Opens Door to Global Real Estate

By: Betty Jensen

On November 13, 2000, representatives of 26 associations of real estate agents throughout the world became signatories of the International Consortium of Real Estate Associations. The signing of this agreement took place at the NAR Annual Convention in San Francisco, California, and forms the springboard for the extension of Consortium membership to other real estate association--and it opens the door to more Connecticut international transactions.

In recent years, with the expansion of transnational relocation, rapid growth of the internet and greater ease of transportation and communication, many U.S. real estate professionals--including some in Connecticut--have been looking to expand their businesses into the international sphere and have turned to their local, state and national REALTOR® associations for advice and assistance.

REALTORS® have felt that they have had inadequate information concerning foreign markets and that the absence of international standards and an efficient referral network prevented them from finding foreign business partners who would live by a strong code of ethics and understanding of fees and commissions as Americans understand them--that they did not know foreign cultures, practices, markets and legal systems--or, as the famous book says, they did not know "When to Kiss, Bow or Shake Hands."

Of course, NAR has had alliances and bilateral relationships among leading real estate associations in the major world markets for some time; but the "pavement-pounding" real estate agent could not grasp an understanding of the forces of globalism which would facilitate his entry into the international arena. The International Consortium of Real Estate Associations is expected to be more positive and more powerful. Consortium members believe that ". . . to ensure that the professional interests of our respective memberships are protected, national real estate associations must come together to form an alliance more powerful than any single association could do on its own."

Hence, the Consortium, coupled with greater opportunities for REALTORS® to earn the CIPS (Certified International Property Specialist) designation and NAR's establishment of Ambassador Associations and the appointment of 43 President's Liaisons has started to address the needs of real estate professionals throughout the United States.

SO…WHAT IS THIS CONSORTIUM?

The Consortium is an alliance of real estate associations (like NAR) recognized as leaders in the world's major markets; and through multilateral agreement, this alliance is poised to assist members in facilitating transnational business efficiently and profitably. The Consortium dictates agreement on rights and obligations binding the associations--and the individuals who make up their membership. The basic commitments oblige each member association to:

• participate in a consortium web site and to exclusively endorse this web site for international real estate purposes;

• apply technical standards relating to electronic data transfer;

• maintain in force a code of ethics governing the conduct of its constituents and to inform its constituents that its existing Code of Ethics shall apply to all transnational real estate transactions with respect to which any of its constituents is a party;

• make current membership information available on the consortium database;

• bear financial responsibility for its own involvement and pay a proportionate share of the operational expenses; and

• furnish other required information on a timely basis.

The signatories believe that the basic commitments are a good beginning but do not fully address the mission. "True success will be achieved when standards are applied to all transnational transactions undertaken by the professionals represented by its member associations. A second order of standards and best practices will be developed as 'protocols.'"

Protocols will be separate subordinate agreements and member associations can choose which protocols, if any, to sign. Upon signing, a member association must agree to be bound by the terms, rules and standards, and to provide its members the opportunity to voluntarily agree thereto. Protocols which address transnational referrals and procedures for alternate dispute resolution regarding fee entitlements are already being negotiated.

The Consortium's ability to protect the interests of its member association's constituents can be continued only so long as it serves as the single international source for this information. Domestically, associations are free to determine how this same information is available within the respective member country--that is, from a national association web site.

CAR TAKES ITS POSITION

In conjunction with the establishment of the International Consortium of Real Estate Associations, the Connecticut Association of REALTORS® has been appointed the U.S. Ambassador Association to Federation Nationale de l'Immobilier of Paris, France--the French national counterpart to NAR--the French association for real estate professionals.

This appointment was arranged through the efforts of CAR International Committee Chairperson, Barbara Schmerzler, and Beth Mecteau Director of Executive & Member Programs of the Connecticut Association of REALTORS®. Members of CAR's International Committee consider it a privilege to have been assigned the French ambassadorship for many reasons, but--especially--because French real estate practice is somewhat comparable to that of the United States.

Federation Nationale and the French government require real estate practitioners to hold licenses and abide by a strong code of ethics. The French association holds meetings, publishes newsletters and a magazine--and has a highly sophisticated presence on the internet. On their site, www.fnaim.com, the information, written in French, can be translated to English at the click of a mouse.

Eighty-five per cent of France's sales agents handle residential real estate and 15% serve the commercial clientele. The French government promotes home ownership, and French citizens have no restrictions regarding the purchase of property in another country.

PRESIDENT'S LIAISON FROM CONNECTICUT

Beyond this, during 2001 Connecticut will have a reciprocal director of the National Association of REALTORS® (appointed by NAR President Richard Mendenhall) who will act as the President's Liaison to the French association. The President's Liaison will be expected to assist in the planning of visits by the French representatives, assist in hosting the group and in translating and interpreting when needed. Periodic reports to NAR's International Relations committee and ongoing communication with representatives of Federation Nationale de l'Immobilier will also be required. It is expected that there will be a Connecticut trade mission to France and vice versa.