Matt Carter made an interesting post on the Inman blog about Azerbaijan, a country situated on the Caspian Sea between Russia and Iran, that only recently regained its independence after the 1991 breakup of the Soviet Union. He noted that their banks have just now began to offer home mortgages and so far, they’ve issued 86 loans, with interest rates averaging 10.2 percent.
Why is this so interesting? Because the country of Azerbaijan is 93.4% Muslim. And Islam forbids the paying of interest, as it violates a teaching of Allah. What is specifically Shari’ah (forbidden) is taking interest, giving it, writing it, and being a witness to its contract. Azerbaijan’s official stance has been that it is a secular state. This is the first indication that it is really moving in that direction.
Because the paying of interest is Shari’ah, most people in Islamic countries rent or have managed to save enough money to pay cash for a home. They have also devised an unsual paper manipulation to pay more for a house than it is worth and then buy it on time but not paying interest, just paying more and for longer than they would if they paid cash for it.
Can a Muslim be a real estate agent? Yes, if they have nothing to do with the paying or taking of interest. Which, of course, is very difficult in Western countries.
According to Mufti Monzer Kahf, a job of real estate agent is allowed for a cash-only sale, with no financing or bank mortgage.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
Being a real estate agent for a certain company is permissible as long as the agent avoids writing an application for a forbidden interest-based loan and avoids selling stolen property. What applies to real estate also applies to refering others to the same real estate company for the purpose of buying and selling.
Dr. Monzer Kahf, a prominent economist, counselor and mufti states the following:
Working as a real estate agent or owner of an agency is permissible because the main line of business is helping people buy and sell real estate properties. What is prohibited in the Shari’ah is taking interest, giving it, writing it, and being a witness to its contract. It is not forbidden to help people buy and sell properties. Of course, two things are haram: to write an application for forbidden interest-based loan (a buyer may be under conditions of necessity and hence its loan may not be forbidden); and to help sell stolen property. These must be avoided by any agent, whether in real estate or other businesses.
The same applies to the referral because in referral you are also helping in buying and selling, and it is none of your business how the buyer is going to finance the purchase or whether the other agent is going to help in writing the loan application; you are not required to investigate what other people (agent or buyer) are going to do or how they are going to proceed in their relationships.
Thus, in both cases your commission is halal, in sha’ Allah.
Having clarified the above, I would like to add that in referral there is another point that must be clear: When you refer a friend who comes to you on the basis of trust and confidence and you refer him or her and take commission, the referred friend should know that in referring him or her to that specific agent you will get a commission; if he or she does not know that and takes your advice as a friendly trusted advice, such a commission is deserved to the friend not to you. You can’t be a paid adviser without the recipient of the advice knowing that you are paid, that is, that you have an interest in this advice.
I think this is all pretty interesting, especially in light of encouraging home ownership for minorities in the U.S..
Niche banks find growth in Muslim market
Specialized services for Islamic communities help local lenders expand. Big banks not far behind.
Fulfilling the American Dream: Hard-Working Families Realize Home Ownership Dreams