The quality of services provided by real estate brokers in Russia should improve significantly as a new regulatory framework for the industry was recently announced. The Russian national government and real estate industry associations took part in creating the framework.
The new standards include introducing qualification exams for those applying to be a real estate broker in Russia. Special qualification assessment centres under the control of the Chamber of Commerce and Industry, a non-governmental organization that represents the interests of business in Russia, will be established in different regions of the country.
Once someone passes the exam, they will be placed in a state register of brokers in Russia.
In the meantime, in addition to the introduction of the qualification examination, the government has approved professional standards to regulate brokers. Now brokers will have to respect the confidentiality of the client’s information and prevent misleading them in any way. Brokers must be transparent about the value of properties and not try to take advantage of their clients. And as with North American standards, brokers will not be allowed to slander their colleagues.
The Chamber of Commerce, together with the Russian government, also have plans to compile an annual ranking of the best real estate brokers in Russia.
Arsen Hunanyan, president of the Russian Guild of Realtors (RGR), a public association of real estate brokers in Russia, says that in addition to the adoption of professional standards, the industry still needs its own federal law, known as “On real estate activities”, to regulate the industry. The association has been lobbying for such a law for many years, but Hunanyan says the adoption of legislation will take place no earlier than 2022 or 2023.
“Despite the efforts that have been taken by the Russian government, RGR and other public associations in the field…at present lots of companies, sole proprietors or just individuals continue to implement various activities in the field of real estate brokerage without any registration and licensing, which is completely unacceptable,” he says. “The market needs to be cleaned up. And this is not only the task for the state, but also the professional community.”
It’s estimated that about 15,000 companies are providing real estate brokerage services in Russia. RGR says the qualification exam and professional standards have already resulted in a decline in those numbers.
Hunanyan says Russia has no plans to use the North American regulatory standards, planning to choose its own path.
“In Russia, a professional Realtor makes three deals per month, while star agents do about eight deals,” he says. “In the U.S. and Canada, a broker can conduct one deal in six months. This is a completely different approach to business. In North America, the law applies mainly to agents, however we hope that the newly designed legislation, particularly the long-awaited federal law, will also affect the heads of business.”
RGR says this year it plans to work on marketing the use of real estate brokers. It will do some advertising, with the biggest focus on retaining return customers.
The average real estate commission in the Russian Federation is estimated at two average monthly salaries in the country, which is equivalent to about US$1,300.
Eugene Vorotnikov is a contributing writer for REM.
