Renewing concern about the impact that foreign real estate agents and brokers are having on local industry professionals, Bahamas Real Estate Association (BREA) President Pat Strachan claimed recently that non-Bahamian realtors are causing their Bahamian counterparts to lose out on millions of dollars in commission annually.
According to Mr. Strachan, the substantial sums of lost revenue are the result of non-Bahamian real estate agents selling land in The Bahamas without involving Bahamians.
He said BREA estimates suggest that the losses total between $20 million and $25 million annually.
“This is a very important and urgent issue in our association and it is something that we are dealing with very aggressively,” said Mr. Strachan.
“Just think about the amount of money our agents are losing when you multiply the number of properties sold without any Bahamian participation by a six percent rate of commission.”
The real estate association president said areas of particular concern where foreign agents have sold real estate to the exclusion of local professionals include Paradise Island, Harbour Island, Abaco and Exuma.
According to Mr. Strachan, the proper process that ought to be followed is that non-Bahamian agents and brokers should refer their clients to a BREA agent who would facilitate the land transaction and in turn pay a referral fee to the foreign agent.
Providing an update on the association’s efforts to address the problem, Mr. Strachan said BREA is continuing to work closely with its attorney to prepare recommendations for amendments of local real estate legislation.
Those recommendations, he said, should be submitted to the Minister of Financial Services and Investments either this month or sometime in January.
While expressing optimism that government would take steps to “fill up the loopholes” in domestic legislation which allow foreign brokers to operate in The Bahamas, Mr. Strachan nevertheless expressed concern that some government departments may be contributing to the problem.
“How in the world those foreign agents can come into our country and operate without a licence is beyond me,” he said.
“I need the Ministry of Finance to tell me how an unlicensed company can come into this country, operate a real estate office and collect a commission when they tell me that I, a licensed agent, have to produce my real estate broker’s licence when I go to renew my business licence. Also, what is the Department of Immigration doing about this? How can the Department allow these persons to come into the country and work without a work permit?” he questioned.
According to Mr. Strachan, BREA has taken interim measures to help reduce the level of losses experienced by Bahamian real estate agents until the more stringent legislation takes effect.
“We have been building alliances with, for example, the Palm Beach Association of Realtors,” he said.
“That association has a membership of close to 9,000 agents. What we have done is build an alliance with them to try and get them to convey to their agents that if they have a buyer who wants to purchase Bahamian real estate they should work with a local BREA agent.”
Mr. Strachan said while the arrangement has produced some positive results, there are still a number of agents in South Florida who refuse to participate in the alliance, choosing instead to take for themselves a full commission rather than accept a referral fee.
By: Darrin Culmer, The Bahama Journal
