[photopress:Godfather.jpg,thumb,alignright]Sellsius has the right point, but the wrong Godfather.
The Godfather of the people outside of “The Family” is the local State Real Estate Commission, appointed in most cases by the Governor of each state, and the protections for the people are in the licensing laws of each state.
The Godfather of the Realtors, the people inside “The Family”, is NAR and WAR and SKCAR and their counterparts around the country.
So in Mafiaoso-speak, Marlon Brando (in the Sellsius article) is the head of “the bosses” and Al Pacino is the Godfather of “the neighborhood”. (To be really accurate, I’d have to switch over to Sopranos…so I took a little license there, for the benefit of the non-purists, on the analogy.)
Point being, DOJ against NAR may help the Banks, more than the people, and local Departments of Licensing, and Real Estate Commissions, etc…make changes to affect the public at large. There are ripples to each that affect both…
but don’t go to the wrong Godfather on the day of his daughter’s wedding, or you may get the wrong wish granted, or no wish granted at all! For those not tuned in to “mafioso-speak”, it’s called “Barking up the Wrong Tree” 🙂
ardell,
woof 🙂
the point is that it doesn’t matter which state your in, people still must buy and sell real estate. but, each state and local mls has it’s own regulations. as people move, they have to adapt and that’s where some confusion may occur, possibly fueling the fire against our industry. hence, causing the doj to “go to the mattresses”.
since federal law is controling, the states have to abide by federal laws, the federal government is the “Capo di tutti Capi” . only time will tell who gets “whacked”.
-rdb.sellsius°
I LOVE IT! Capo di tutti Capi!! Haven’t heard that one in years, not in my house anyway 😉
Can someone younger than I, tell me what it means when a “Rudolph” barks at you on a blog?
Is that Rudolph a reindeer or a dog? 😉
Rudolph, and I assume you know this, everyone is mixing apples and oranges to their advantage.
NAR is running commercials about Code of Ethics as if that is about the Realtor and the Public. We insiders know that NAR’s rules are about Realtors vs. Realtors and Realtors being “ethichal” when dealing with other Realtors. Some changes have been made to tie into the ad compaign. And judging from Galen’s comments, the commercials are working LOL.
But no one is going into the right arena on this one. Russ clearly “gets it”, but sidelines the issue a bit. Agency Laws protect consumers and some “discount models” are completely contradictory to the Powers that Be that offer consumer protections.
It’s one of those questions with three answers, and everyone can only see…or chooses to talk about…two. I say Russ clearly favors the buyer agent fee being reduced across the board, for primarily consumer driven reasons. Same as the owners of Redfin. Not saying they are wrong in that regard, just pointing that out. It’s a Crusade…a Mission…against…not sure who or what. The fee structure? The Realtor? The agent who is making too much damn money?
How much money one makes has to do with how many clients he will work for at one time…that increases or dilutes level of service as well. No one talks about that much…except HouseValues who has 20 to 30 more a month to GIVE you just waiting in their queue 🙂
Can you imagine the level of service an agent can give a consumer if they have 30 clients all at the same time????
Just something to think about. No “whacking” for those that disagree with me.
NewbieMike…I don’t know. I don’t see his picture on his blog 🙂 Do reindeers say woof?
Rudolph,
I will disagree with you that “consumers have to adapt” as in “When in Rome do as the Roman’s do”.
The different states need to “get on the stick” to make all consumer options and consumer protections the same, or at least more similar, everywhere. Sorry, I’m still appalled at the Agency Status of buyers in NY, some 10 years after I left the area.
I seriously cannot believe that Seattle is THAT MUCH…lightyears even…ahead of New York City!! I’m glad 🙂 but apalled, just the same.
ardell,
when a reindeer starts to bark, it means that santa may need someone else to guide his sleigh so all the children receive their gifts 🙂
in our case, the real estate industry is experiencing so much change that everything gets blurred. it’s really tough to focus on the who, what & why issues as a whole since each state is unique. it truly is a challenge.
seems like the waters get real muddy when discussing representation and compensation.
-rdb°
ardell,
when a reindeer starts to bark, it means that santa may need someone else to guide his sleigh so all the children receive their gifts 🙂
in our case, the real estate industry is experiencing so much change that everything gets blurred. it’s really tough to focus on the who, what & why issues as a whole since each state is unique. it truly is a challenge.
seems like the waters get real muddy when discussing representation and compensation.
-rdb°
Well then, let me ask you Rudolph, do you think buyers should have rights and representation ONLY in a buyer’s market? Should the laws of each and every state…and I DO mean EVERY state, afford some basic protections to consumers, regardless of market conditions?
Who gets hurt if they don’t, Rudolph? Less frequently the “Home Grown American” and more frequently the “English not their first language” crowd. Just ain’t right, pure and simple.
What you are saying is like saying it’s OK for some states to have “back of the bus rules for buyers” and others not…aren’t we a better Nation than that as a whole?
ardell,
when i said “consumers have to adapt”, currently, they still do. if a consumer want’s to move to new york city from seattle and is used to having a “buyer broker” represent them in a fiduciary capacity, then they may be in for a shock.
until change comes to make “consumer options & protections” more similar everywhere, as you said, people will have to deal with it and adapt. so, in my opinion anyway, i think we’re on the same page here.
-rdb°
ardell,
when i said “consumers have to adapt”, currently, they still do. if a consumer want’s to move to new york city from seattle and is used to having a “buyer broker” represent them in a fiduciary capacity, then they may be in for a shock.
until change comes to make “consumer options & protections” more similar everywhere, as you said, people will have to deal with it and adapt. so, in my opinion anyway, i think we’re on the same page here.
-rdb°
Rudolph,
The very first buyers who waltzed over the State Line (that’s right…sorry NJ) into Bucks County PA and received Buyer Agency Representation, were NEW YORKERS! That was 1993!!! What the heck is more waiting going to do? Change apparently doesn’t come from waiting…it SHOULD come from everyone promoting change for the sake of the greater good…not the sake of the money trail.
Time isn’t doing it…let’s try kicking and screaming…or better yet…let’s call Uncle Vinnie in on this one. Shame Frank’s gone…he’d be singing NEW YORK, NEW YORK with whole different lyrics…maybe Liza can do it for “HIM” (as I genuflect in His memory).
ardell,
you are a riot. seattle is very lucky to have you! plus i bet those new yorkers just loved it!
lets’ call mickey blue eyes, i think he’s down at “the la trattoria”
-rdb°
Even in CA, the other agents gave me their NY buyers…they couldn’t handle “IT”.
Notice, I will definitely discount any NY or Philly buyers relocating to Seattle…just for the East Coast Fix!! That’s the only time I will use the word “discount”, I promise, Robert.
Can I call you Rudy…please? Just me, of course 😉
sure thing ardell, rudy is fine 🙂
-rdb°
Pingback: sellsius° real estate blog » Blog Archive » Organized Real Estate?
Ardell
You said:
“I say Russ clearly favors the buyer agent fee being reduced across the board, for primarily consumer driven reasons. Same as the owners of Redfin. Not saying they are wrong in that regard, just pointing that out. It’s a Crusade…a Mission…against…not sure who or what. The fee structure? The Realtor? The agent who is making too much damn money?”
C’mon Ardell, where have I even intimated that I am lobbying for a reduction of fees for anyone involved in the business? For the record, I do support innovative new business models and if those new models cause compensation to go down (or up), so be it. I also support a free market system where the good will prosper and the bad will perish (figuratively speaking of course). I have said on many occasions that traditional brokers are in the absolute best possible position to innovate and create new value for consumers (and I would love to see them do it!).
The problem, as I see it, is that by innovating, these brokers believe that they are killing the golden goose. Many “power brokers” are older and nearing retirement and the last thing they want to do is mess up a good thing. That the easiest thing to do is keep innovation from happening, or happening at their pace, thereby maintaining power and controlling fees. That, I do not support.
Hope that clears things up for you.
Russ
Ardell
You said:
“I say Russ clearly favors the buyer agent fee being reduced across the board, for primarily consumer driven reasons. Same as the owners of Redfin. Not saying they are wrong in that regard, just pointing that out. It’s a Crusade…a Mission…against…not sure who or what. The fee structure? The Realtor? The agent who is making too much damn money?”
C’mon Ardell, where have I even intimated that I am lobbying for a reduction of fees for anyone involved in the business? For the record, I do support innovative new business models and if those new models cause compensation to go down (or up), so be it. I also support a free market system where the good will prosper and the bad will perish (figuratively speaking of course). I have said on many occasions that traditional brokers are in the absolute best possible position to innovate and create new value for consumers (and I would love to see them do it!).
The problem, as I see it, is that by innovating, these brokers believe that they are killing the golden goose. Many “power brokers” are older and nearing retirement and the last thing they want to do is mess up a good thing. That the easiest thing to do is keep innovation from happening, or happening at their pace, thereby maintaining power and controlling fees. That, I do not support.
Hope that clears things up for you.
Russ
What’s really changing, Russ, is that agents don’t work WITH agents anymore, they work FOR clients. That’s a hard one for those in the business the longest.
What I am seeing right now is a whole lot of “We have to stick together on this!” kind of thinking. Instead of face to face, sincere conversations with clients, everyone is “sticking together” and practicing “scripts” to “sell” their services” to the nameless masses. Their “relationship” is with the agent down the street, when their “business relationship” should be with their client.
As you can see by some of the comments here, most agents can’t swallow that when the client is the buyer.
I know…I pulled a “Bill Clinton at a debate” move. Liked your comment though 🙂 To answer you question I’d have to go back through all of the posts and comments since you arrived. You asked “where you have said” and frankly, you may have said it to me the one time we met in person, so I’m not spending my weekend look through old posts. I’m going to Street of Dreams with Robbie!
What’s really changing, Russ, is that agents don’t work WITH agents anymore, they work FOR clients. That’s a hard one for those in the business the longest.
What I am seeing right now is a whole lot of “We have to stick together on this!” kind of thinking. Instead of face to face, sincere conversations with clients, everyone is “sticking together” and practicing “scripts” to “sell” their services” to the nameless masses. Their “relationship” is with the agent down the street, when their “business relationship” should be with their client.
As you can see by some of the comments here, most agents can’t swallow that when the client is the buyer.
I know…I pulled a “Bill Clinton at a debate” move. Liked your comment though 🙂 To answer you question I’d have to go back through all of the posts and comments since you arrived. You asked “where you have said” and frankly, you may have said it to me the one time we met in person, so I’m not spending my weekend look through old posts. I’m going to Street of Dreams with Robbie!
Hi Rain City Readers
This is the REAL Russ. I did not make the prior post. Not sure how someone could make a post as if they were me but it seems an odd way of making a point.
(the real) Russ
Hi Rain City Readers
This is the REAL Russ. I did not make the prior post. Not sure how someone could make a post as if they were me but it seems an odd way of making a point.
(the real) Russ
Russ,
The “drama” of this particular issue, that being the DOJ suing NAR from Sellsius’ original article, is clearly not being created by bloggers.
The issue of the consumer having options with regard to commissions, and the services provided by those commissions, is a topic worthy of the Department of Justice’s attention. If it is a big enough issue for the Department of Justice to entertain, it clearly is a big enough issue for people to address and follow and comment about.
I sidestep you on occasion for two reasons. One because we are fellow contributors. Two because a small portion of my vantage point comes from a very brief conversation we had in person regarding Catalist, the Broker in CA who came out with a 3% total commission, split 1 1/2 to Catalist (not the listing agent) and 1 1/2 mls offering. The agents are employees.
When I say, “It’s a Crusade…a Mission…against…not sure who or what. The fee structure? The Realtor? The agent who is making too much damn money?” I am not creating a “drama”. I am repeating the drama terms used by the alternative business models. This is the Mission Statement of Catalist cut and paste directly from their website, CatalistHomes.com, “Our Mission: To reinvent the existing residential real estate business — an antiquated, inefficient, and costly system of selling homes.”
There is a lot of money and some big names backing companies like Catalist and Redfin and Zillow. You have made mention of your apparent distaste for brokers who do not show the homes listed with what the broker determines an insufficient offering in the mls.
From one of the “White Papers” that are part of the DOJ suit “There are many disclosure gaps that exist today in the real estate industry…” My issue with Agency Disclosure Laws is that they do not highlight the “option” of a buyer going directly to the listing agent to save money, and where that leaves the buyer in terms of representation. I think the “disclosure gap” is putting in everyday laymen terms…”If you call the seller’s agent whose name is on the sign, and buy the property directly from that agent, you need to be aware that the agent will be counseling you to the advantage of the seller”. Something simple and clear like that.
Sellsius used the Brando reference with regard to NAR and the DOJ suit. I used Pacino as a counterpoint to draw in the agency disclosure issues that are also part of the material in the case. Christine’s comments to your post point out that Buyer Representation does not progress by waiting. If anything, it regresses.
I am not “full of it” when I link agency representation issues with commission issues. I am not “full of it” when I tie together NAR , the trade organization responsible for representing Realtors and The Real Estate Commisions of each state, responsible for their constituency, the home buying and selling public.
Some of the new and innovative business models popping up require that someone talk about the commission issues in direct connection with the representation issues. A seller hiring “an agent” for $500 to put up a sign and a lockbox, a FSBO in the mls if you will, where the seller must receive offers themselves directly from the Buyer Agents, should be addressed in the Agency Disclosure pamphlet.
My point is that the new business models that many, including you, support, come with some tradeoffs in the area of representation. The fact that an agent at Redfin is writing an offer without having seen the property, is no small issue in terms of being adequately represented, and yet you see no problem at all with this from a representation standpoint.
When I say, “But no one is going into the right arena on this one. Russ clearly “gets it
Russ Cofano wrote: “For the record, I do support innovative new business models and if those new models cause compensation to go down (or up), so be it. I also support a free market system where the good will prosper and the bad will perish (figuratively speaking of course). I have said on many occasions that traditional brokers are in the absolute best possible position to innovate and create new value for consumers (and I would love to see them do it!). The problem, as I see it, is that by innovating, these brokers believe that they are killing the golden goose. Many “power brokers
Ardell
As I said earlier, I did NOT make the post that said you “were full of it.” I presume you read my disclaimer before you made this post but maybe not. Even so, your comments are directed at me and my opinions and I don’t want someone reading your post and come away thinking that my lack of response indicates my agreement with your conclusions.
Where have I said I supported any PARTICULAR business model? I do remember our five minute conversation where we discussed Catalist and other matters but I certainly don’t remember saying that I supported their model or that I thought the industry should move in that direction. I do remember telling you I thought the model was interesting and that traditional brokers in SoCal did not take too kindly to their model and made it very difficult for them to do business. That is a fact, not an opinion.
Your concluding line:
“Mostly it sounds like you think every agent should and will offer the same high level of representation, whether the consumer pays $500 or $50,000…but that can’t be so, I must be wrong there.”
Again, not what I have said nor what I believe. I believe that consumers will figure out what they like and how much they want to pay for it, as long as innovation is allowed to happen.
I may not “get” a lot of things but I do “get” agency and how it works in real life. Your entire post is based on agency representation tradeoffs. Since I assisted in drafting the Agency Law for Washington State (which required hours and hours of committee meetings with practioners) and since I have educated thousands of real estate licensees on their agency obligations and how they play into the real world of working with consumers, I have a very real and working knowledge of agency in real estate.
Do you really think that industry wide, the higher the commission paid, the better the agency representation? That would seem to directly conflict inference of the agent’s comments that I referred to in my earlier post (http://www.raincityguide.com/2006/07/17/you-have-to-wonder/) which was ‘pay me more and I will work harder to get my buyer to purchase this house’. If that is the inference, then it would directly conflict with the buyer’s agent duties to put the interests of the buyer ahead of their own financial gain. If that is not the inference, then what is it?
To summarize, there are folks that have contributed comments on this very interesting issue who provide great representation and advocacy to their clients. Seems also that they are across the board on compensation. What’s wrong with that? Only the market will tell us.
Happy Day!
🙂
Russ
Ardell
As I said earlier, I did NOT make the post that said you “were full of it.” I presume you read my disclaimer before you made this post but maybe not. Even so, your comments are directed at me and my opinions and I don’t want someone reading your post and come away thinking that my lack of response indicates my agreement with your conclusions.
Where have I said I supported any PARTICULAR business model? I do remember our five minute conversation where we discussed Catalist and other matters but I certainly don’t remember saying that I supported their model or that I thought the industry should move in that direction. I do remember telling you I thought the model was interesting and that traditional brokers in SoCal did not take too kindly to their model and made it very difficult for them to do business. That is a fact, not an opinion.
Your concluding line:
“Mostly it sounds like you think every agent should and will offer the same high level of representation, whether the consumer pays $500 or $50,000…but that can’t be so, I must be wrong there.”
Again, not what I have said nor what I believe. I believe that consumers will figure out what they like and how much they want to pay for it, as long as innovation is allowed to happen.
I may not “get” a lot of things but I do “get” agency and how it works in real life. Your entire post is based on agency representation tradeoffs. Since I assisted in drafting the Agency Law for Washington State (which required hours and hours of committee meetings with practioners) and since I have educated thousands of real estate licensees on their agency obligations and how they play into the real world of working with consumers, I have a very real and working knowledge of agency in real estate.
Do you really think that industry wide, the higher the commission paid, the better the agency representation? That would seem to directly conflict inference of the agent’s comments that I referred to in my earlier post (http://www.raincityguide.com/2006/07/17/you-have-to-wonder/) which was ‘pay me more and I will work harder to get my buyer to purchase this house’. If that is the inference, then it would directly conflict with the buyer’s agent duties to put the interests of the buyer ahead of their own financial gain. If that is not the inference, then what is it?
To summarize, there are folks that have contributed comments on this very interesting issue who provide great representation and advocacy to their clients. Seems also that they are across the board on compensation. What’s wrong with that? Only the market will tell us.
Happy Day!
🙂
Russ
This is the problem with real estate blogs at present. Everything gets dramatized for the sake of gaining readership. Knowing that it is primarily realtors who would care about the future speculations on their industry, blog writters are trying to stir people up. Besides Ardell you know you are completely full of it.Editor’s note: This is the 2nd post I’ve gotten in two days where someone submits a post under a contributor’s name. I think this is really shallow. I’m not sure what to do about this other than to delete the posts for now, but if this same person keeps this up, I may have to go to a system where registered users are the only ones who can post… but I’d really hate to do that…
Maybe the best bet is just to block this person’s IP address (it is identical for both…) hmmm.
This is the problem with real estate blogs at present. Everything gets dramatized for the sake of gaining readership. Knowing that it is primarily realtors who would care about the future speculations on their industry, blog writters are trying to stir people up. Besides Ardell you know you are completely full of it.Editor’s note: This is the 2nd post I’ve gotten in two days where someone submits a post under a contributor’s name. I think this is really shallow. I’m not sure what to do about this other than to delete the posts for now, but if this same person keeps this up, I may have to go to a system where registered users are the only ones who can post… but I’d really hate to do that…
Maybe the best bet is just to block this person’s IP address (it is identical for both…) hmmm.
dustin,
maybe blocking that ip would be best. that comment by the “fake russ” had me scratching my head.
representation and compensation vary in each state. homeowners who move from state to state every couple of years quickly learn that they must learn the ropes all over again. the real question is, can a solution be found to implement representation and compensation fairly accross the board?
-rdb°
Russ,
Not sure how the “Ardell you know you are completely full of it” comment affected my response, so I won’t go back up there and just take it from here. How can a $500 limited service listing, carry the same responsibility under Agency Law as a full service listing.
Seems to me that the consumer should be able to list with an agent for less and the agent should be able to get a hold harmless letter at $500. What prevents a consumer and seller from that option? Clearly the consumer can’t hold the agent responsible for much, if all he wants to pay is $500 for mls access, a sign and a lockbox and to “represent himself like a FSBO” other than that.
Why would the agency law prevent the buyer from that limited responsibility to agent option? Buyer’s can check Agent Represents NONE on the offer, but sellers do not have that little box/option on the current forms.
Russ,
Not sure how the “Ardell you know you are completely full of it” comment affected my response, so I won’t go back up there and just take it from here. How can a $500 limited service listing, carry the same responsibility under Agency Law as a full service listing.
Seems to me that the consumer should be able to list with an agent for less and the agent should be able to get a hold harmless letter at $500. What prevents a consumer and seller from that option? Clearly the consumer can’t hold the agent responsible for much, if all he wants to pay is $500 for mls access, a sign and a lockbox and to “represent himself like a FSBO” other than that.
Why would the agency law prevent the buyer from that limited responsibility to agent option? Buyer’s can check Agent Represents NONE on the offer, but sellers do not have that little box/option on the current forms.
rdb,
I’ve banned his/her IP address from leaving comments, but I’ve never tried out this feature before, so maybe he/she can cooperate with us and try to leave another message so I can know if this function is working! LOL!
rdb,
I’ve banned his/her IP address from leaving comments, but I’ve never tried out this feature before, so maybe he/she can cooperate with us and try to leave another message so I can know if this function is working! LOL!
let us know what happens dustin.
-rdb°