In a recent case in the UK six real estate agents were fined £370,000 for colluding in fixing their commission rates at 1.5%. An article can be found about it here. This practice is against the law in the UK and many other countries. In Cayman the standard commission rate is set by CIREBA and for most properties is a huge 7%. Firstly, why is the Cayman commission so high compared to other countries? And secondly, is it not against the law for them to act in an uncompetitive manner which fleeces the agents’ customers?
Auntie’s answer: I brought your question to a local real estate professional and here’s his take. First of all, he explained that markets with very low commission rates, and specifically the UK, involve salaried agents in a highly competitive market.
Here in Cayman, the rates set by CIREBA are fixed between 5% and 10% depending on the property’s list price, but, he said, “there are no restrictions on participating in deal making when an offer is on the table”.
He also noted that in all cases, the fees are split between the agent and the brokerage, and in most cases between two different firms. “CIREBA is a self-governed body, and despite what some may think, back in the day this was a cowboy town so the CIREBA certification process and rules and regulations keep everyone in check,” he said.
One final point the realtor made was that he thinks most agents and brokers understand their roles in the process. “It’s certainly not to fleece anyone or get in the way of a willing and able buyer and a motivated seller coming together on a property deal,” he maintained.
There are brokers who are not members of CIREBA, Sotheby’s for one.
wrong http://www.cireba.com/company-profile/cayman-islands-sothebys-intl-realty
sotheby’s are cireba but savills and christies + the real estate company are not
CIREBA is a crock of poop. They do extremely little to charge high commissions, but listen to them tell it and you would think it is rocket science.. Anyone know the GOL cost for an Agent? I hope it is at least $10K.
By direct. Sell direct. Miss out the middle man who adds nothing but costs a lot. Simply look at the number of agents and the big spenders at the charity events.
Just sell your property by yourself. Who needs a realtor to sell your property, just think, you will not have to pay out a percentage of the money, it will be all yours.
Someone near me is trying to do exactly that… and his property has been languishing on the market (ecay) for months. No takers.
and i know plenty of folks who have sold their property by themselves in days…above the asking price….
And you think a CIREBA would make a difference!!!!
I agree Stop the Crime, most people self selling are delusional at best. Sellers waste time in Cayman by trying to justify their exorbitant list prices. this drags out negotiation for no reason. Example … I bid on a condo 1bed/1bath 780sq/ft on 7 Mile beach … Seller was asking $749,000 USD, I bid $525,000 cash, direct. Seller ended up telling me I insulted him, he proceeded to list on CIREBA with an on island Broker asking $649,000, so listed now $100K less then he thought – unit sold for $600,000, after commission and legal fees seller gets $550,000, netting him $25K more then I offered (which was negotiable) My point is, agents are not needed,, owners need to get their heads out of the clouds, when it comes to list prices, fair deals are doable! DON’T OVER PAY YOU WOULDN’T DO IT AT HOME ON PRIMARY RESIDENCE! BE FAIR, MAYBE EVEN A LITTLE GENEROUS!
cayman realtors are no better than used car salesmen….. only interested in a fast buck.
it’s mind boggling to think that some media outlets here view them as experts and let let then publish their self serving propoganda as ‘market updates’…..zzzzzzzzzz
CIREBA is a cartel that do very little to earn their commission. I have owned several properties bought and sold without agents, it’s very easy. Each time I list my property I can get dozens of unsolicited calls and emails from realtors advising me to let them represent me so I get ‘the best’ deal. Absolutely no way will I pay 7-10 percent for this ‘service’. It is clearly a rip off.
If you don’t like it there are many independent agencies that ill work with you on a rate you are comfortable with. Why not just forget about CIREBA?
7% is highway robbery!
“the fees are split between the agent and the brokerage, and in most cases between two different firms”
Then so is the amount of work involved!
Cireba= cayman islands real estate BROKERS association,
This means they are protecting there own interest, where else in the world can someone earn $425,000.00 commission on the sale of one house (vista del mar property last year) the agent acted for both sides on that one.
Many people train to be lawyers and accountants for years them might make partner after 15 years and still won’t earn that in a year. (don’t feel sorry for them either) But with minimal training agents here call themselves professionals. Prehaps if the rates were lower and cireba was disbanded there would be less agents and only the professional ones would last. there are 100’s of agents in caymam maybe even a 1000 now far too many.
Dart has started an agency that is not a member and the rates are lower, come on people just stop using the cireba members and prices will be forced down.
This answer does not respond to the second question posed; is price fixing (as CIREBA employs) against the law int the Cayman Islands.
In answer to your question, no. Oligopolistic profits are extracted by the capital owning families at the expense of the ordinary person and they would like it to stay that way, thank you very much.
Why are the fees split between the agent and the brokerage? The agents are employees, not independent contractors.
According to the law, yes, but we all know that is not really what happens, is it?
Excellent job by the real estate agent not answering the question. I have bought and sold many properties in Cayman and have never used an agent.
To the person asking the question, if you don’t like it to bad, we aren’t in the UK. Stop being a cheap Brit, pretty sure you’re making a fortune, would you decrease your rates please? Didn’t think so!
Oh and I’m not in real estate.
Ridiculous
Nice one!