REAL ESTATE BROKERAGE INDUSTRY IN SRI LANKA

Abstract

The real estate market is somewhat different from other markets as the land and landed properties possesses certain economic and technical characteristics. Due to the great heterogeneity, the imperfection of the real estate market and the legal procedures, assistance of several professionals for both buyers and sellers is required in market transactions. Hence, the real estate market is not just an arrangement by which buyers and sellers are brought together to decide a price at which goods can be exchanged. There are many actors involved in making this arrangement for buyers and sellers. These actors perform many professional roles in real estate transactions. Among them the real estate broker is an agent who acts for an owner or a prospective buyer in negotiating and drawing up a real estate transaction. Hence theoretically a broker is an intermediary licensed by the state in which he or she operates, who arranges real estate sale or lease transactions for a fee or commission. In many developed countries, the profession of real estate broker is legalized and established as a distinguished professional career in the field of real estate marketing. Hence, this has been developed as an industry with promising income through legalized fee or commission. Nevertheless, in Sri Lanka, real estate brokerage industry is partly governed by the legislation. For example, it is noted that many brokers who work on individual basis do not cover under any form of legislation form an informal arrangement especially in relation to the fees, and other terms and conditions of the service. Also many of them are not professionals having the required training and knowledge on the subject. This paper attempts to discuss the role of the real broker and aspects of real estate brokerage industry as perceived in the countries where real estate marketing and management has been developed and organized as a distinguished professional field. Secondly, attention has been paid to analyze the characteristics of this profession in Sri Lanka especially in relation to its legal framework, its practice and level of development as a distinguished professional career.

Keywords: Real estate, Real estate broker, Real estate brokerage industry, Real estate market

For full Paper: fmscresearch@sjp.ac.lk