By Sheila Viesca, Ph.D.
With insights from John Riad, CEO of HousingInteractive
Imagine this*: You’re ready to buy your first home or sell a property you’ve held for years. You find what looks like the perfect listing online and send an inquiry. Within minutes, you’re hit with a barrage of messages: not from one, but from ten different “agents,” all claiming to represent the same property. Each gives you a slightly different price, a varying set of amenities, and conflicting details about the owner. With so many agents in the market, it’s no wonder buyers are left confused. Most people feel overwhelmed and uncertain in these situations, unsure of whom to trust or how to proceed.
You feel overwhelmed, confused, and wary of the various real estate agents, making it hard to feel comfortable asking questions or trusting the information you receive. In today’s market, these challenges are even more pronounced due to increased competition and rapidly changing conditions.
The Wild, Wild West of Philippine Real Estate
This isn’t a rare occurrence; it’s a reality for many in the Philippine real estate market. Despite the professionalization brought about by the Real Estate Service Act (RESA) or Republic Act No. 9646, the industry remains largely fragmented. An overabundance of practitioners, coupled with a severe lack of coordination, has created a chaotic environment that hurts buyers, sellers, and even legitimate brokers. While RESA has raised standards, the average agent in the Philippine real estate market may still not provide the level of service or expertise that clients expect, especially compared to top performers. In some cases, agents may set unrealistic expectations for clients, influenced by commission structures and competitive pressures. It is important to note that not all agents provide the same level of expertise or professionalism; there is significant variation in quality and experience across the industry.
This post will peel back the layers of this problem, from its root causes to its tangible impacts, and propose a clear path forward toward a more professional and efficient market.
The Current Landscape: A Fragmented Market
The Philippine real estate market is fragmented and uncoordinated. Many individuals work independently with little cooperation, and different brokerages often operate in silos, further contributing to the lack of coordination. This leads to more competition but not better results for clients.
A. The Proliferation of “Agents”
The term “agent” is a common catch-all, but it is a legally distinct and often unregulated title. Under the Real Estate Service Act (RESA), a practitioner is either a licensed real estate broker or an accredited real estate salesperson. This distinction is critical and often misunderstood. Holding a valid and active real estate license is essential for anyone who wishes to legally and ethically practice as a real estate professional in the Philippines. When considering hiring a real estate professional, it is important to understand these distinctions and ensure you are engaging someone with the appropriate credentials.
| Real Estate Broker (PRC-licensed) | Accredited Real Estate Salesperson |
| To become a licensed broker, an individual must hold a Bachelor of Science in Real Estate Management (BSREM) or a related four-year degree, pass a rigorous PRC-administered board examination, and register with the Professional Regulation Commission (PRC). A broker is a principal agent who is authorized to act independently, manage their own brokerage firm, and enter into legally binding contracts for real estate transactions. They are the ones who can legally sign listing agreements and other transactional documents. | The path to becoming a salesperson is much less formal. An individual must be PRC-accredited and work under the direct supervision and accountability of a licensed real estate broker. Salespersons are not required to take a board exam, and their accreditation must be renewed annually. They cannot operate independently, sign contracts, or receive commissions directly from clients. All their transactions must be processed through their supervising broker. |
This easy entry for salespersons has led to a crowded market. The potential for more money draws many to high commissions without the rigorous requirements of becoming a broker. However, this also fuels the rise of “colorum” or unlicensed practitioners who operate illegally, undermining public trust and making it hard for consumers to verify legitimacy when selling real estate. Most agents are either new or have low sales volumes, which affects service quality. Despite the efforts of many practitioners, few succeed or earn a significant income, contributing to confusion and risk for both buyers and sellers. Therefore, it is crucial to conduct due diligence before you hire a broker or salesperson to ensure you are working with a qualified and reputable professional.
The proliferation of unlicensed real estate practitioners in the Philippines has created a confusing and risky environment. It erodes public trust and makes it incredibly difficult for buyers and sellers to find legitimate, quality service. At HousingInteractive, we are committed to being the trusted, professional alternative that provides clarity and security in every transaction.”
— John Riad, Founder, HousingInteractive
B. The Missing Puzzle Piece: A Unified System
In mature real estate markets like the US, a centralized Multiple Listing Service (MLS) ensures licensed brokers cooperate by sharing exclusive listings and commissions. This system guarantees maximum property exposure and transparency for everyone involved. The Philippine market, however, lacks such a unified platform. Instead, brokers and listing agents keep listings to themselves, leading to fragmented information, inconsistent pricing, and confusion for buyers and sellers. Licensed brokers face unfair competition and damage to their reputation. To fix this, the Philippines needs a national MLS, stronger regulations, ethical cooperation, and a shift from competition to collaboration to create a professional, transparent, and efficient real estate market.
This system creates a virtuous cycle of efficiency and transparency:
| For Sellers: | Their property gets maximum exposure because it’s marketed by a single listing broker or listing agent, but can be sold by a vast network of co-broking agents. The relationship between the seller and the listing broker or listing agent is formalized through a listing agreement, which serves as a binding contract outlining the rights, obligations, and terms for both parties. |
| For Buyers: | They only need to work with one reliable broker, who can then access a comprehensive database of all available properties, regardless of who holds the listing. This eliminates the need for buyers to contact dozens of agents to find a suitable property. |
| For Brokers: | It fosters collaboration, not just competition. A broker’s inventory is no longer limited to their own listings; they can effectively sell any property on the MLS. Listing agents also benefit from increased exposure for their listings and greater opportunities for collaboration with other professionals. |
In the Philippines, there is no single, nationwide MLS system. Existing platforms by groups like PAREB and CREBA are limited to their members, causing fragmented listings and forcing brokers to rely on personal networks. This lack of coordination leads to inefficiencies, inconsistent pricing, and reduced market potential.
C. The “One-Off” Mentality
The Philippine real estate market suffers from fragmentation due to the absence of a unified Multiple Listing Service (MLS), leading brokers to withhold listings and operate independently. This “one-off” mentality limits property exposure, causes inconsistent pricing, and creates confusion and risks for buyers, sellers, and licensed brokers alike. Buyers face misinformation and fraud risks, sellers experience inefficient marketing and loss of control, and licensed brokers deal with unfair competition and reputational harm. To improve transparency, efficiency, and trust, the market needs a national MLS, stronger regulation and enforcement, active professional organizations, and a cultural shift from competition to cooperation.
- Limited Exposure: The property only gets exposed to the broker’s personal network of contacts, dramatically reducing its visibility and the pool of potential buyers. Additionally, the list price may not be transparent or consistent across different agents, leading to confusion and a lack of trust.
- Missed Opportunities: The seller misses out on the chance to get the best possible offer, as the most eager or qualified buyer might be working with a different broker who is unaware of the listing. Often, the broker on the other side of the transaction may not even know about the property, resulting in lost deals and fewer negotiation opportunities.
- No Real-Time Market Data: Without a shared database, there is no real-time insight into what is available on the market. This makes it difficult for both brokers and consumers to accurately gauge property values and trends.
The “one-off” mentality fundamentally prioritizes individual gain over collective efficiency. It creates a market where success is tied to a broker’s personal reach rather than their ability to collaborate effectively as a team with the other side. This culture of exclusivity, born from the lack of a centralized system, is a major roadblock to the professionalization and growth of the Philippine real estate industry, and often prevents agents from negotiating the best deal for their clients.
The Tangible Impacts: Who Pays the Price?
The fragmented Philippine real estate market, with too many brokers and no coordination, causes confusion, inefficiency, and risks for buyers, sellers, and licensed professionals. This leads to higher costs and inconsistent information for clients. Buyers face conflicting details and fraud risks, sellers suffer from limited exposure and poor marketing, and licensed brokers struggle with unfair competition and damaged reputations. Addressing these issues requires a unified national MLS, stronger regulations, technology adoption, and a cultural shift toward cooperation to create a more professional and efficient market.
A. For the Property Buyer
For buyers, the uncoordinated market creates confusion and frustration. Multiple agents provide conflicting information, making it hard to trust listings or compare prices. First-time buyers are especially vulnerable to misinformation and uncertainty. A buyer’s agent can help by offering clarity, advocacy, and guidance throughout the process, reducing risks like fraud and misrepresentation.
- The “Same Property, Different Price” Phenomenon: A single property often has multiple listings from different agents, each with varying prices or details. This inconsistency makes it difficult for buyers to trust the information they receive and know which price is correct. Buyer’s agents play a crucial role in helping clients navigate these discrepancies and advocate for the buyer’s best interests.
- Information Overload and Confusion: Buyers are overwhelmed by multiple agents for the same property, each offering partial or conflicting information. This forces them to waste time cross-referencing details, making it hard to make an informed decision. A buyer’s agent or buyer agent can help streamline the process by consolidating information and providing expert advice, ensuring the buyer’s needs are prioritized.
- The Risk of Fraud and Misrepresentation: The lack of regulation allows unlicensed “colorum” agents to operate freely. This exposes buyers to potential scams, title fraud, and misrepresentation, as it’s nearly impossible for a buyer to verify a listing or an agent’s legitimacy. Working with a reputable buyer’s agent can significantly reduce these risks by ensuring proper due diligence and protecting the buyer’s interests through buyer’s agreements and professional oversight.
B. For the Property Seller/Developer
Sellers also suffer from the disorganized market, as the chaos works against their best interests.
- Inefficient Market Exposure: A successful home sale depends on strategic exposure and negotiation. A seller’s property, or house, is only exposed to a single broker’s limited network, not the entire market. This reduces the number of potential buyers and can lead to a lower final sale price and a longer selling period. Sellers may not get the expected results due to the fragmented system.
- Uncontrolled Marketing: Giving property details to multiple agents leads to a loss of control over marketing. This can result in unauthorized or poorly crafted online ads with incorrect details, which confuses buyers and damages the property’s reputation. Putting the house in the best possible position requires coordinated marketing efforts, which is difficult in a fragmented system.
- Security and Privacy Concerns: Sharing sensitive documents like property deeds and personal details with numerous unvetted individuals increases the risk of identity theft and data misuse.
A selling agent, who represents the seller, plays a crucial role in marketing houses as valuable assets and managing the home sale process to achieve the best possible outcome.
C. For the Licensed Real Estate Broker
Even the professionals who are playing by the rules are negatively impacted by this environment.
- Fierce and Unfair Competition: Licensed brokers compete with unaccredited agents who often charge lower commissions due to fewer overheads and no ethical obligations. This drives down fees and diminishes the value of professional expertise. Commission rates and structures are influenced by this competition, often resulting in less money earned for the same work. In hot markets, homes may sell themselves, shifting the dynamics among agents and sometimes reducing the need for high commissions or aggressive negotiation.
- Difficulty in Co-brokering: Without a unified system, brokers struggle to find and trust others for collaboration. Lack of a centralized platform for commission sharing limits cooperation and reduces effectiveness in serving clients. Occasionally, the same agent represents both buyer and seller, which can raise conflicts of interest and transparency concerns.
- Reputational Damage: Unlicensed “colorum” agents engage in unethical practices that harm the profession’s image. This erodes public trust, making it harder for legitimate brokers to attract clients. High customer satisfaction, timely communication, and positive feedback are essential for reputable agents to stand out and succeed in the community.
The Path Forward: A Call for Unity and Professionalism
The problems of a fragmented real estate market are clear. The solutions, while not simple, are within reach. They require a multi-pronged approach that leverages technology, strengthens regulation, addresses the demand, and, most importantly, fosters a fundamental shift in the mindset of real estate professionals. In a more professionalized market, agents must be able to effectively negotiate on behalf of their clients to secure the best deal and favorable terms.
A. Embracing Technology and Centralized Platforms
The key to fixing a fragmented market is to centralize and standardize information. Technology provides the tools to do this.
- A National, Unified MLS: The most crucial step is to build and enforce a single, nationwide Multiple Listing Service (MLS). This is a game-changer. It would be a centralized, professionally-managed database where all licensed brokers are required to submit their listings. Agents must now present their listings and services transparently on digital platforms to build trust with clients. An agent’s online reputation and digital footprint are critical in establishing credibility and attracting clients in this environment. This system would ensure that all properties get maximum exposure and that buyers can find what they’re looking for by working with a single, trusted professional. For this to work, it must be embraced by the major professional organizations and have the backing of a regulatory body.
- Leveraging PropTech: The rise of real estate technology (“PropTech”) startups in the Philippines shows a strong desire for this change. Companies are developing comprehensive CRM (Customer Relationship Management) systems, property management software, and online platforms that can streamline transactions. These tools can help brokers manage their client relationships more effectively and facilitate easier collaboration.
- Digital Verification: Technology can also solve the problem of trust. A mobile app or website where consumers can quickly and easily verify a broker’s PRC license number in real-time would immediately weed out “colorum” agents. This small step would empower consumers and protect legitimate practitioners.
B. Strengthening Industry Regulation and Enforcement
The best technology in the world is useless without proper enforcement. Regulatory bodies must take action.
- Strict Enforcement of RESA: The Professional Regulatory Board of Real Estate Service (PRB-RES) and the Professional Regulation Commission (PRC) need to actively penalize unlicensed practitioners and enforce the Real Estate Service Act (RESA). Regular crackdowns on “colorum” agents and tougher penalties will help ensure smoother real estate transactions. Unlike lawyers, real estate professionals are commission-based and regulated by PRB-RES and PRC, ensuring accountability.
- Public Awareness Campaigns: Educating the public about the risks of unlicensed agents is essential. PRB-RES and PRC should lead campaigns clarifying the difference between licensed brokers and accredited salespersons, emphasizing the importance of verifying licenses.
- Streamlined Verification: License verification should be simple and accessible. While the PRC’s online system is a good start, it needs wider promotion and user-friendliness. A quick search by name or license number should provide clear information on a professional’s status and affiliation.
C. The Role of Professional Organizations
The change cannot be driven by regulators alone. Industry leaders must take the initiative to foster a new culture.
- Promoting a Code of Ethics: Organizations like the Philippine Association of Real Estate Boards (PAREB) and the Chamber of Real Estate & Builders’ Associations (CREBA) are crucial. They can serve as the moral and ethical compass of the industry. By promoting a strict code of ethics, they can build a foundation of trust and professionalism among their members. These organizations also help create a strong professional community that upholds ethical standards and encourages collective participation.
- Facilitating Co-Brokering: These organizations must actively create forums and platforms for their members to co-broker. They can establish clear rules for commission sharing and dispute resolution, thereby removing the hesitation to collaborate on listings.
- Continuing Professional Education (CPE): PAREB and CREBA can also ensure that their members are continuously upskilling and staying informed about market changes and new technologies. This commitment to ongoing education helps maintain high professional standards and sets licensed practitioners apart from their unlicensed counterparts.
D. A Shift in Mindset
Ultimately, cooperation cannot be mandated by law or technology; it requires a cultural shift. Brokers must move from seeing each other as rivals to collaborators. Sharing listings leads to faster sales and fair commissions, benefiting everyone. A cooperative approach, with brokers supporting clients throughout the process, is essential to transform the industry into a professional and respected field.
Conclusion: From Chaos to a Coordinated Market
The Philippine real estate market faces challenges due to too many brokers and a lack of coordination, confusing buyers, limited exposure for sellers, and unfair competition for licensed brokers. The solution lies in adopting a unified national MLS, enforcing regulations strictly, and fostering cooperation among professionals. Embracing these changes will create a transparent, efficient, and trustworthy market that benefits all parties involved.
But is it truly possible to establish a unified national MLS in the Philippines? We will explore this question in the next article.
