Buyers want a house; Sellers want a buyer

The National Association of Realtors held their Mid-Year conference this week. Often the Mid-Year Conference kicks up more dirt than the Annual event, as the Mid-Year conference focuses more on the business end and the mls issues (legislative sessions).  Less partying…more in depth issue discussions.

The big new issue is about Trulia and Zillow and the like. “Scraping” data vs. being spoon fed “appropriate” data. The big old issue is Dual Agency and what are “we” going to do about “it”.

The only news we must all and always be mindful of during these discussions is “we” are not the only ones in the “room”, and never will be.  Remember in the Bible when the Powers That Be of the time tried to trick Jesus into boiling everything He said in His whole life down to ONE major and single Rule?  Jesus didn’t skip a beat. If you don’t know what His one line answer was, well…go Google that. This is a Real Estate blog .

The one and only single rule of real estate, from which all other rules should follow is this: Buyers want a house at the lowest overall cost; Sellers want a buyer who gives them the highest net return.

Now take every mls rule, every State’s agency law, everything any broker wants and doesn’t want, everything any agent wants or doesn’t want, and hold it up against that one measurement…that one rule above all rules. Does what you want help buyers get their house at the lowest overall cost to them? Does what you want help sellers sell their house at the highest net return possible? If the answer is no…then change what you want.

The Big “New” Issue is about control of the mls data, control of the inventory, data scraping vs. direct feed via what insiders call IDX.  IDX is what you see when you search property on any agent site. Simple as that.

The sticky wicket for issue number one is that buyers want to see all the houses, including For Sale by Owner homes, preferably all on one site. That is why a Public MLS (kind of what Trulia and Zillow may turn into) serves the needs of buyers better than a private and Broker controlled site. That will continue to be true until and unless the Brokers fill the need of buyers (and to some extent sellers) by permitting listings that have no listing agent. Don’t hold your breath on that one.

The answer, as I see it, is two sources and not one.  One that has all listed property via any Brokerage site (as we all have access to all via IDX) and one that has all UN-listed property…and nothing else. Until then, buyer’s of homes will be confused into thinking that Zillow and Trulia and the like have all of the listed property PLUS…which it doesn’t. That means some portion of the public is always being mislead. Those that use only a brokerage site, and miss a choice For Sale By Owner property, and those that use Trulia or Zillow or Realtor.com, and miss a choice listed property. [One additional site for all rental property would be nice too. There's a need someone should fill. But there never seems to be enough money generated by rental fees to support it actually happening.]

The Big “Old” Issue is Dual Agency. We already have that answer to some extent, it’s called Designated Agency. We simply need more time and practice and experience in the actual practice of Designated Agency…and that as they say is the SLOG of it. Until California adopts Designated Agency…there is no answer beyond the slog of it. When and IF California adopts Designated Agency, we’ll be able to make quicker progress.

Eradicating Dual Agency is not The NAR’s prerogative (Jim Duncan). Why? Look at The main rule of real estate according to ARDELL, characteristically in BOLD lettering in this post at paragraph four.

Sometimes and often, the buyer’s best way to get the house and/or get lowest overall cost, is by using the listing agent.  Not always, but sometimes and often. The State can’t…the NAR can’t…remove that option from the buying public. In reality what a buyer wants is full representation, from the person who knows the most about the house, and at the lowest possible cost which is free (or what they sometimes perceive to be free).

Sometimes and often, the seller’s best way to get a buyer to buy his house and get the highest net return is to cut out one of (or both of) the agents in the process.The State can’t…the NAR can’t…remove that option from the selling public In reality what a seller wants is ready access to all buyers in the marketplace without having to pay two agents, AND they want the buyer agent fee to come back to them vs. it being given to the buyer, if the buyer has no agent. They also don’t want to pay a buyer agent to tell the buyer that the house is overpriced or inadequate. They also want the agent they hire to be free to bring them a buyer direct (dual agency).

All of the answers with regard to Dual Agency are done with from the NAR’s perspective. They discourage agents from practicing it, until and unless it is absolutely necessary (when the buyer and seller want it). Each State has a long way to go on agency issues, like explaining “no agency” in it’s required agency disclosure noting it as an option. Until States stop asking for the real estate industry to approve and help with it’s agency options, “No Agency” will not appear as a fully explained option for their constituency.

About ARDELL

ARDELL is the Managing Broker of Sound Realty in Seattle/Kirkland. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has over 22 years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. Follow Ardell on Google+

Comments

  1. http://www.dora.state.co.us/real-estate/contracts/2005contracts/dd25-05-04.pdf

    Colorado does not allow Dual Agency. Here is the link to the different types of relationships we are allowed to be in.

    In a situation where we are the listing agent and an unrepresented Buyer wants to purchase the home, we can be Transaction Brokers (referees) to both parties – or (more accurately, when we know too much about the Seller’s situation) we can be the Seller’s agent and the Buyer is a Customer.

  2. It always amazes me how the simplest things can create such headaches. You hit the nail on the head – what does the consumer want – that should always be the policy – and the majority of the consumers / buyers / sellers what what gives them the best – and often times that comes down to dual agency…. or no agency – thank you for putting this out there – it is an important part of our industry and one that more should pay closer attention to.

  3. I guess I realize “suddenly” why I have been so reluctant to particpate in dual agency… it continues to be hugely controversial! I have had opportunity to run it all ways … dual … neither … both (yikes!)… I like the idea of Seller=Client and Buyer=Customer.

  4. Good Lord everyone controversial? Problematic? Let me simplify it for you.

    You are the listing Agent.

    You begin to enter “dual agency” from a call off your sign and are afraid of the possible “implications.”

    You show the client YOUR listing by telling them the dates of your next open house. You owe it to your client to ALWAYS show your listing if THEY are unable or unwilling to show it themselves. I mean come on they are paying you 2-3%…GET OVER THERE AND SHOW IT!!

    If they decide to purchase the home then SAVE YOUR CLIENT 3% and send them to one of 1000′s of real estate attorney’s across the country that will write up the offer and represent the buyer for less then 800.00. Ours charge 500.00 to supervise the doc’s and prepare. **Imagine that—SAVING YOUR CLIENTS MONEY!! WHAT A CONCEPT!!**

    I pray for the day real estate has a single “facilitator role” powered by the likes of Google that will single handedly shut down the MLS system as we know it and we will ALL enter a NEW realm of real estate far more consumer friendly and cost efficient.

    Google proposed this nearly 8 years ago and I assure you this Buffet is coming to an end.

  5. Good Lord everyone controversial? Problematic? Let me simplify it for you.

    You are the listing Agent.

    You begin to enter “dual agency” from a call off your sign and are afraid of the possible “implications.”

    You show the client YOUR listing by telling them the dates of your next open house. You owe it to your client to ALWAYS show your listing if THEY are unable or unwilling to show it themselves. I mean come on they are paying you 2-3%…GET OVER THERE AND SHOW IT!!

    If they decide to purchase the home then SAVE YOUR CLIENT 3% and send them to one of 1000′s of real estate attorney’s across the country that will write up the offer and represent the buyer for less then 800.00. Ours charge 500.00 to supervise the doc’s and prepare. **Imagine that—SAVING YOUR CLIENTS MONEY!! WHAT A CONCEPT!!**

    I pray for the day real estate has a single “facilitator role” powered by the likes of Google that will single handedly shut down the MLS system as we know it and we will ALL enter a NEW realm of real estate far more consumer friendly and cost efficient.

    Google proposed this nearly 8 years ago and I assure you this Buffet is coming to an end.

  6. If you are in the Seattle area, page 1 of your purchase and sale agreement on Line 17 will tell you if you are “a client or a customer” as noted in a couple of the comments above. It is not uncommon for people to think they are a client (represented) when they are a customer (unrepresented).

    Our standard contracts have no option for the Seller to be a customer. There are only two elections for the seller’s representation. The agent represents the seller or both the buyer and the seller. For the Buyer, however, there are four elections. The agent who writes the offer for the buyer can represent the Buyer when doing so (buyer as client), the seller (buyer as customer), both the buyer and the seller (Dual Agency), or no one (no agency). So while both buyers and sellers should pay attention to line 17, the elections favor the seller and the buyer has to pay very close attention.

    For about 85 of the last 100 years there was only one option: All agents represented the seller and no agents represented anyone but the seller. Those who say in the comments above “seller = client; buyer = customer” are reverting to the “old school” method where only the seller is represented. You will see this in your contract if Seller is checked for both listing agent and selling agent.

    In some states, like CA, any offer made with any agent in the same company as the listing agent is Dual Agency. In WA we have Designated Agency where only the listing agent is automatically the agent for the seller, and any other agent in that same company can represent the buyer. That option is not available in all states.

    There is no national norm, so this topic continues to be tossed around in high places. The main problem is many don’t understand the differences from one to another, so some wish for it all to just go away, as Ray points out, and for real estate to be sold like any other commodity like a pair of shoes or a new laptop. While many call for NAR to make these changes, it is actually the laws of each state that govern…not the Realtor Association.

    The money doesn’t follow…often the price for no representation is the same as the price for full representation. The states provide laws for type of representation, but no guidelines as to fees for each type. Consequently one often pays the same price for watered down or no representation, as they do for full representation.

    The reality is that many agents don’t know the difference between full and none :) So even in states that spearheaded the movement for facilitator roles, agents were penalized in courts after the fact.

    Ray, you may find this interesting. Ironically, the agents were not penalized in court for not doing enough for the buyer, they were penalized for doing too much for the buyer. There was no training on how NOT to be an agent for the buyer and to merely facilitate, and so the courts ruled that their actions were in excess of their elected “title” of facilitator. The penalty was they were held to the higher standard, even though the buyer opted for the lesser one. These cases were commonly knows as the “walk like a duck” trials.

  7. If you are in the Seattle area, page 1 of your purchase and sale agreement on Line 17 will tell you if you are “a client or a customer” as noted in a couple of the comments above. It is not uncommon for people to think they are a client (represented) when they are a customer (unrepresented).

    Our standard contracts have no option for the Seller to be a customer. There are only two elections for the seller’s representation. The agent represents the seller or both the buyer and the seller. For the Buyer, however, there are four elections. The agent who writes the offer for the buyer can represent the Buyer when doing so (buyer as client), the seller (buyer as customer), both the buyer and the seller (Dual Agency), or no one (no agency). So while both buyers and sellers should pay attention to line 17, the elections favor the seller and the buyer has to pay very close attention.

    For about 85 of the last 100 years there was only one option: All agents represented the seller and no agents represented anyone but the seller. Those who say in the comments above “seller = client; buyer = customer” are reverting to the “old school” method where only the seller is represented. You will see this in your contract if Seller is checked for both listing agent and selling agent.

    In some states, like CA, any offer made with any agent in the same company as the listing agent is Dual Agency. In WA we have Designated Agency where only the listing agent is automatically the agent for the seller, and any other agent in that same company can represent the buyer. That option is not available in all states.

    There is no national norm, so this topic continues to be tossed around in high places. The main problem is many don’t understand the differences from one to another, so some wish for it all to just go away, as Ray points out, and for real estate to be sold like any other commodity like a pair of shoes or a new laptop. While many call for NAR to make these changes, it is actually the laws of each state that govern…not the Realtor Association.

    The money doesn’t follow…often the price for no representation is the same as the price for full representation. The states provide laws for type of representation, but no guidelines as to fees for each type. Consequently one often pays the same price for watered down or no representation, as they do for full representation.

    The reality is that many agents don’t know the difference between full and none :) So even in states that spearheaded the movement for facilitator roles, agents were penalized in courts after the fact.

    Ray, you may find this interesting. Ironically, the agents were not penalized in court for not doing enough for the buyer, they were penalized for doing too much for the buyer. There was no training on how NOT to be an agent for the buyer and to merely facilitate, and so the courts ruled that their actions were in excess of their elected “title” of facilitator. The penalty was they were held to the higher standard, even though the buyer opted for the lesser one. These cases were commonly knows as the “walk like a duck” trials.

  8. Ray,

    The issues for Dual Agency boil down to what you do or don’t do. Say you just had a discussion with your seller client to reduce the price from $699,950 to $649,950. The seller says he will do that if there are no offers before Monday. On Saturday you get a call from the sign and the buyer wants to offer $675,000. Do you send them to someone to write it up at $675,000? Or do you tell them to offer less than $650,000, since you know that the seller is dropping the price on Monday?

  9. In the 500 Realty model of real estate (which is closely modeled after the Google proposal) we do NOT sell our own listings.

    We refer all the above to a real estate attorney for their region.

    If I was a conventional Agent, again, I would show my own listings and send all unrepresented Buyers to a real estate attorney of the Buyers choice. I would have a list ready for any potential buyer.

    Its all about saving money for my client and it ALWAYS will be.

  10. In the 500 Realty model of real estate (which is closely modeled after the Google proposal) we do NOT sell our own listings.

    We refer all the above to a real estate attorney for their region.

    If I was a conventional Agent, again, I would show my own listings and send all unrepresented Buyers to a real estate attorney of the Buyers choice. I would have a list ready for any potential buyer.

    Its all about saving money for my client and it ALWAYS will be.

  11. Simple answer — tell the seller. It’s the seller’s decision. Note RCW 18.86.040 (1), (a) and (d) and 18.86.010 (6). Buyer’s agency (in Washington) is not created by a phone call or conversation.

    Interestingly, us old-timers tend to be consumed with days-gone-by client-customer and dual agency inner conflicts. However, most of the rest of the industry probably doesn’t care.

    The beauty of Washington state’s Law of Real Estate Agency is that our duties are strictly defined, rather minimal, and do not rise to the level of advocacy. We can now legally offer minimal representation and be none the worse for wear.

    As dual agent, single agent or no agent at all, our statutory duties to either party differ remarkably little, and rarely exceed that required by RCW 18.85.

    Unfortunately, the buying and selling public often still imagines us as traditional-type agents, advocates, that is, and “on their side.”

  12. Simple answer — tell the seller. It’s the seller’s decision. Note RCW 18.86.040 (1), (a) and (d) and 18.86.010 (6). Buyer’s agency (in Washington) is not created by a phone call or conversation.

    Interestingly, us old-timers tend to be consumed with days-gone-by client-customer and dual agency inner conflicts. However, most of the rest of the industry probably doesn’t care.

    The beauty of Washington state’s Law of Real Estate Agency is that our duties are strictly defined, rather minimal, and do not rise to the level of advocacy. We can now legally offer minimal representation and be none the worse for wear.

    As dual agent, single agent or no agent at all, our statutory duties to either party differ remarkably little, and rarely exceed that required by RCW 18.85.

    Unfortunately, the buying and selling public often still imagines us as traditional-type agents, advocates, that is, and “on their side.”

  13. Having an attorney prepare paper work is not the same as representation. Has the attorney been to the property? Do they know the client? Do they know anything about the seller or have they done any due diligence in facilitating a fair and arms length transaction?

    No. The attorney does nothing. They charge, what did you say $500, to fill in some blanks.

    Saving the client money means they get some one to make a deal, or at least make sure it’s a fair deal.

    I think if attorneys want work they should sue people who do bad business. They won’t of course because they make more money by doing escrows, and filling in some blanks. They want to be the Real Estate agent’s resource.

  14. Having an attorney prepare paper work is not the same as representation. Has the attorney been to the property? Do they know the client? Do they know anything about the seller or have they done any due diligence in facilitating a fair and arms length transaction?

    No. The attorney does nothing. They charge, what did you say $500, to fill in some blanks.

    Saving the client money means they get some one to make a deal, or at least make sure it’s a fair deal.

    I think if attorneys want work they should sue people who do bad business. They won’t of course because they make more money by doing escrows, and filling in some blanks. They want to be the Real Estate agent’s resource.

  15. Very interesting discussion. Thorn seems to think that none of us are advocates and David sems to think we all are advocates.

    Thorn,

    While WA does not impose Fiduciary duties, we had a discussion with Jillayne once regarding whether or not if someone is a Realtor Member, that upgrades that status to Fiduciary level. Some agents are Realtors and some aren’t. Some are natural advocates and some aren’t (whether they are a Realtor Member or not).

    NAR curriculum for the ABR designation suggests that a buyer signing a buyer agency agreement = client and not signing one = buyer as customer only.

    The hardest part of agency is, even if you could pin it down, most people don’t understand it. Is full “service” the equivalent of representation? Is representation equivalent to advocacy?

    In the end, every agent is what they are regardless of Title, as was proven by the “walk like a duck” trials. When it comes to agency…you are what you DO vs. what you are called.

  16. Very interesting discussion. Thorn seems to think that none of us are advocates and David sems to think we all are advocates.

    Thorn,

    While WA does not impose Fiduciary duties, we had a discussion with Jillayne once regarding whether or not if someone is a Realtor Member, that upgrades that status to Fiduciary level. Some agents are Realtors and some aren’t. Some are natural advocates and some aren’t (whether they are a Realtor Member or not).

    NAR curriculum for the ABR designation suggests that a buyer signing a buyer agency agreement = client and not signing one = buyer as customer only.

    The hardest part of agency is, even if you could pin it down, most people don’t understand it. Is full “service” the equivalent of representation? Is representation equivalent to advocacy?

    In the end, every agent is what they are regardless of Title, as was proven by the “walk like a duck” trials. When it comes to agency…you are what you DO vs. what you are called.

  17. Thorn — be careful what you wish for. If/when the consuming public learns that agents are not “on their side,” they’ll be even less inclined to pay the substantial fees incurred by using an agent. Instead, they’ll realize that they can hire a lawyer for much less who really, really will be on their side. No dual agency issues allowed, thank you very much. Attorneys represent their clients, and put their interests above all others, period.

    On the flip side, David — this attorney (and his partner) “knows” his client, because adequate representation requires it. How else can I insure that the contract adequately protects the client? Admittedly, we inform our clients that they need to take a little responsibility for themselves when it comes to the due diligence required for a prudent purchase. They’re adults — they can do it, particularly when we answer any and all questions about the process. Plus, its ultimately up to them what constitutes a “fair” price for a property (although given the many transactions we handle on a regular basis, we also have some input on that issue as well).

    Ultimately, whether you appreciate any of these points, one point is irrefutable: A lawyer will cost much less than an agent in terms of fees paid. Think about that for a second: If attorneys are substantially cheaper, notwithstanding the fact that attorneys are expensive, then clearly market forces are out of whack and agents are the beneficiaries of a system stacked in their favor. Hopefully, for the consuming public, those days are numbered.

  18. Thorn — be careful what you wish for. If/when the consuming public learns that agents are not “on their side,” they’ll be even less inclined to pay the substantial fees incurred by using an agent. Instead, they’ll realize that they can hire a lawyer for much less who really, really will be on their side. No dual agency issues allowed, thank you very much. Attorneys represent their clients, and put their interests above all others, period.

    On the flip side, David — this attorney (and his partner) “knows” his client, because adequate representation requires it. How else can I insure that the contract adequately protects the client? Admittedly, we inform our clients that they need to take a little responsibility for themselves when it comes to the due diligence required for a prudent purchase. They’re adults — they can do it, particularly when we answer any and all questions about the process. Plus, its ultimately up to them what constitutes a “fair” price for a property (although given the many transactions we handle on a regular basis, we also have some input on that issue as well).

    Ultimately, whether you appreciate any of these points, one point is irrefutable: A lawyer will cost much less than an agent in terms of fees paid. Think about that for a second: If attorneys are substantially cheaper, notwithstanding the fact that attorneys are expensive, then clearly market forces are out of whack and agents are the beneficiaries of a system stacked in their favor. Hopefully, for the consuming public, those days are numbered.

  19. Ardell — you too should be careful what you wish for. If a true alternative to the MLS ever develops, agents will lose the last remaining advantage that allows them to keep their fees artificially high: a monopoly on the information. Certainly your vision of two parallel listing services will never come to pass: Every agent worth their salt would post on both services, so the non-MLS service would quickly encompass all listings. In that event, sellers will no longer be required to pay a buyer’s agent commission — and when buyers need to pay their own agents directly, the artifice will crumble.

  20. Craig,

    My concern stems from a client who on first contact emailed me properties she found on Zillow, thinking Zillow represented the MLS listed properties (ALL) plus For Sale by Owner.

    What I wish for is not about me…or the industry…it is with regard to whether or not the public is being misled and missing properties by using only one or the other.

  21. Craig,

    An old question you never answered that is relevant to this post:

    On line 17, what do you fill in as to the buyer being represented? Whose name shows as the representative of the buyer as far as the Purchase and Sale contract is concerned?

  22. Craig,

    Marti’s comment scares me more: ” I like the idea of Seller=Client and Buyer=Customer.”

    The agent “liking” the buyer to be unrepresented is scary.

  23. Craig,

    Marti’s comment scares me more: ” I like the idea of Seller=Client and Buyer=Customer.”

    The agent “liking” the buyer to be unrepresented is scary.

  24. Ardell — I love both Marti’s comment and Thorn’s comment. As an attorney trying to compete directly with agents, comments like theirs are very helpful.

    As for Line 17 — When I act as just the attorney, I am neither the selling licensee nor the listing agent. So, neither applies to me. That said, we are in the process of developing a new limited brokerage businss that will allow us to provide our clients with the benefits of an agent (access to the MLS, a 3% commission that can be returned to the client). When we provide these limited services to our clients, we will check whatever box is appropriate, which of course will NEVER be “both parties” because dual agency is inconsistent with acting as an attorney.

  25. Craig,

    Scarier yet, in our area, is that many don’t notice “Seller” checked in both places. Should be more apparent than the booklet and a check box on the contract. There should be a signed notice of which type is elected, explaining ONLY that one type, as confirmation and acknowledgment. In my perfect world, of course :)

  26. I sat in at the NAR Mid-Year MLS meeting and the IDX discussion was great. I am glad that I got up early to battle the traffic into DC. Today’s consumers are so lucky to surf through the IDX sites that agents have to get information on any house listed.

    So a lot was done in DC last week to help every agent provide the best search tools. The brokers and agents participated, made recommendations, and I feel that everyone won. This was huge!

    Do you have an IDX site? I had a video on my blog where I discuss how I put in my listing and the MLS pumps it out through the Internet http://dougfrancishomes.com/2009/03/mls-thanks-to-idx-mris/ and I have an easy to use one for my market at https://idxpro.cisdata.net/AR278898/Search/quick/ that was well priced too.

    What are your clients using?
    -doug

  27. I sat in at the NAR Mid-Year MLS meeting and the IDX discussion was great. I am glad that I got up early to battle the traffic into DC. Today’s consumers are so lucky to surf through the IDX sites that agents have to get information on any house listed.

    So a lot was done in DC last week to help every agent provide the best search tools. The brokers and agents participated, made recommendations, and I feel that everyone won. This was huge!

    Do you have an IDX site? I had a video on my blog where I discuss how I put in my listing and the MLS pumps it out through the Internet http://dougfrancishomes.com/2009/03/mls-thanks-to-idx-mris/ and I have an easy to use one for my market at https://idxpro.cisdata.net/AR278898/Search/quick/ that was well priced too.

    What are your clients using?
    -doug

  28. Who would have ever thought there could be so much stress in buying and selling? The only clear solution is an obvious compromise between the buyer and seller–but everyone is entitled to a little selfishness, even the realtor (not many people can sell their home on their own). Its the realtor’s job to harness that selfishness and direct it towards the greater benefit.

  29. Don’t get me wrong, Craig — I’m not a fan of the lowest-common-denominator agency law we now have. I think it’s of a piece with the generally lowered expectations and a devolution toward data crunching and order-taking that has been sweeping the real estate business for some time.

    For a powerful industry whose sole business model has been to collect and profitably dispense “secret” information and expertise, but that now gives it away for free on the internet — and actually competes with itself to do so — strikes me as long-term suicide.

    I cannot imagine the American Bar Association, for example, setting up the most commonly used legal forms on the web, showing potential clients the ins and outs of using them, and then wondering where the market went.

    Somewhere along the line we forgot that most of all, buyers wanted to buy our secrets. Our own egos convinced us they were buying our looks.

  30. Don’t get me wrong, Craig — I’m not a fan of the lowest-common-denominator agency law we now have. I think it’s of a piece with the generally lowered expectations and a devolution toward data crunching and order-taking that has been sweeping the real estate business for some time.

    For a powerful industry whose sole business model has been to collect and profitably dispense “secret” information and expertise, but that now gives it away for free on the internet — and actually competes with itself to do so — strikes me as long-term suicide.

    I cannot imagine the American Bar Association, for example, setting up the most commonly used legal forms on the web, showing potential clients the ins and outs of using them, and then wondering where the market went.

    Somewhere along the line we forgot that most of all, buyers wanted to buy our secrets. Our own egos convinced us they were buying our looks.

  31. Thorn — I’m not so sure its suicide as much as evolution. Given the internet, brokers have no choice but to share listing data. Otherwise, they would be irrlevant in today’s world.

    But by sharing the data, they eliminate their primary raison d’etre. Unfortunately, their interests are too entrenched to make any meaningful attempt at changing their business model to more accurately reflect the modern world (the data must be free, so the only thing left to sell is the service). After all, no matter how many hours you work, 3% of the sales price is a lotta dough.

    I’m looking forward to the day when competitors — non-brokers who can provide the same or similar services — figure out how to meaningfully compete so as to provide some downward pressure on agent commissions (and particularly buyer’s agent commissions — the flat fee listers have managed to drive down listing commissions).

  32. Thorn — I’m not so sure its suicide as much as evolution. Given the internet, brokers have no choice but to share listing data. Otherwise, they would be irrlevant in today’s world.

    But by sharing the data, they eliminate their primary raison d’etre. Unfortunately, their interests are too entrenched to make any meaningful attempt at changing their business model to more accurately reflect the modern world (the data must be free, so the only thing left to sell is the service). After all, no matter how many hours you work, 3% of the sales price is a lotta dough.

    I’m looking forward to the day when competitors — non-brokers who can provide the same or similar services — figure out how to meaningfully compete so as to provide some downward pressure on agent commissions (and particularly buyer’s agent commissions — the flat fee listers have managed to drive down listing commissions).

  33. Ray,

    Every company I have ever known who had to make every other company “bad” to make themselves look like “the best”, has not succeeded.

    Please refrain from disparaging remarks against all that are not like you in every single one of your posts.

  34. Craig I visited your website and I greatly value what you are doing. If you ever want to share the booth at the Seattle Home Show, Tacoma Home Show, Puyallup Fair, or the Kent Cornucopia Days let me know. I think we both agree the “BUFFET” is coming to an end and we both seem to be doing our part at educating the public but let me tell you…………….Its difficult. Our message is consistently distorted with the verbage from our fellow Agents…”You get what you pay for.”

    I’m so happy that Red Fin gets PR. They have been instrumental in CHANGE. Along with MLS 4 Owners. Both great companies.

    Either way TIME is on our side. No debt, No overhead, and thousands of 500 Realty type companies will begin to spread throughout the nation. Earning money through Lead Generation from advertisers and refunding the Buyers Agent Commission 100% to the public is our goal.

    We know the final dagger will have penetrated the “6% Wall of Real Estate Insanity” when we one day drive by a major Bokerage and see in their front window………..”Assist your Agent in finding your home and **Buy through this West Seattle office** and receive 5000.00 towards your purchase.”

    We then know the floodgates will be wide open.

  35. Craig I visited your website and I greatly value what you are doing. If you ever want to share the booth at the Seattle Home Show, Tacoma Home Show, Puyallup Fair, or the Kent Cornucopia Days let me know. I think we both agree the “BUFFET” is coming to an end and we both seem to be doing our part at educating the public but let me tell you…………….Its difficult. Our message is consistently distorted with the verbage from our fellow Agents…”You get what you pay for.”

    I’m so happy that Red Fin gets PR. They have been instrumental in CHANGE. Along with MLS 4 Owners. Both great companies.

    Either way TIME is on our side. No debt, No overhead, and thousands of 500 Realty type companies will begin to spread throughout the nation. Earning money through Lead Generation from advertisers and refunding the Buyers Agent Commission 100% to the public is our goal.

    We know the final dagger will have penetrated the “6% Wall of Real Estate Insanity” when we one day drive by a major Bokerage and see in their front window………..”Assist your Agent in finding your home and **Buy through this West Seattle office** and receive 5000.00 towards your purchase.”

    We then know the floodgates will be wide open.

  36. Ardell why do you feel I have labelled you as BAD? I assume you EARN every bit of your commission. I have no idea what you charge….If it is indeed 6% then I apologize for the “insanity” remark. Many Agents deserve 10% but many more do NOT. I’m sure your worth every penny and I would and WILL send you clients that do NOT fit our model.

    Can you tell me the disparaging remarks I said “In every single one of my posts?” What companies have you known that made others look bad to make themselves look better and have “not succeeded.” Walmart? Home Depot? Lil Caesars? Dollar Tree? Priceline?

    As a student of Economics and the financial exchanges I would like to know a few.

  37. Ardell why do you feel I have labelled you as BAD? I assume you EARN every bit of your commission. I have no idea what you charge….If it is indeed 6% then I apologize for the “insanity” remark. Many Agents deserve 10% but many more do NOT. I’m sure your worth every penny and I would and WILL send you clients that do NOT fit our model.

    Can you tell me the disparaging remarks I said “In every single one of my posts?” What companies have you known that made others look bad to make themselves look better and have “not succeeded.” Walmart? Home Depot? Lil Caesars? Dollar Tree? Priceline?

    As a student of Economics and the financial exchanges I would like to know a few.

  38. Ray,

    “the buffet is over” disparages 100 years of the Realtor Association and we take the heat (the owners of this site) everytime you say it. Plus, they’ve just added (or are currently adding) an amendment to the Code of Ethics holding us responsible for what you say here.

    As a favor to me, can you say YAY about you and others, without saying every one else is going to go out of business. You say “the buffet is over” a lot, and that is not talking about yourself. It’s wishing others ill will and really not allowed.

    I really would appreciate it.

  39. Ray,

    None of those companies you mention wished ill will to their higher priced competitors. “The buffet is over; we’re here!” is not something that good people do.

  40. I will not say it again. (at least on this site lol) BTW nobody is “going out of business”…I believe adaptation will occur and lots of consolidation in the industry where the true professionals will shine.

    I’m from Nevada, and let me tell you I do ALOT of buffets. I will watch my remarks.

    Just like there is JWN,SKS, WFMI, and M there will always be DLTR,TGT, and WMT.

    Different Buyers and sellers with different needs will leave ALOT of PROFESSIONALS busy for years to come.

    However, did I mention I forsee the collapse of the MLS system as we know it? Thats another story that WILL occur in less then 5 years. I’ll refrain!

  41. I will not say it again. (at least on this site lol) BTW nobody is “going out of business”…I believe adaptation will occur and lots of consolidation in the industry where the true professionals will shine.

    I’m from Nevada, and let me tell you I do ALOT of buffets. I will watch my remarks.

    Just like there is JWN,SKS, WFMI, and M there will always be DLTR,TGT, and WMT.

    Different Buyers and sellers with different needs will leave ALOT of PROFESSIONALS busy for years to come.

    However, did I mention I forsee the collapse of the MLS system as we know it? Thats another story that WILL occur in less then 5 years. I’ll refrain!

  42. Ray,

    Thank you! It’s not about whether you are right or wrong…just bad form to rub people’s nose in it :)

  43. Rub peoples nose in it??????? Thats the problem with email and blogging. Tone can be misleading. There is nothing to “rub peoples nose in”.

    Many models of real estate will arise and, just as in any industry, change will occur based on the needs of the customers. Agents who have a proven track record with loyalty from customers will thrive. Our model will have to adjust to change just like any business. I assure you this………………We will have to adapt like everone else.

    Case in point……….look at GM and Chrysler………They did not adapt to change (in an industry that WAS changing) 13 years ago and now they suffer. Every model in business must constantly adapt to the social cycles that our lifestyle and economy call for. This is not just REAL ESTATE……..This is life.

  44. Rub peoples nose in it??????? Thats the problem with email and blogging. Tone can be misleading. There is nothing to “rub peoples nose in”.

    Many models of real estate will arise and, just as in any industry, change will occur based on the needs of the customers. Agents who have a proven track record with loyalty from customers will thrive. Our model will have to adjust to change just like any business. I assure you this………………We will have to adapt like everone else.

    Case in point……….look at GM and Chrysler………They did not adapt to change (in an industry that WAS changing) 13 years ago and now they suffer. Every model in business must constantly adapt to the social cycles that our lifestyle and economy call for. This is not just REAL ESTATE……..This is life.

  45. Craig,

    Anna, Dustin’s wife, may or may not be from time to time (not in WA but in CA…same NAR). You’re the legal expert, but seems to me that Anna and Dustin are “the owners” and not just Dustin.

    Given this is my post, it is more likely I would be held responsible than Anna in this case. If these comments are made on your post, I do not get as “involved”. I don’t trust the NAR to know the difference between my post and his site and Anna vs. Dustin…do you?

    By making the point on my post, I see it as assisting RCG generally with regard to these new rules. Dustin did comment on the VARbuzz post in a manner that suggests that he expects RCG to comply with the new rule. Unlike lawyers, we don’t take advantage of the few days or weeks until the new rule is enacted. As soon as we know it is an issue, we address it, and don’t look for the loophole timeframe between announcement and enactment.

    I think the Rule was passed at the Legislative Meeting, but the details are still being hashed out on various blogs, as the language is (as usual) more than a bit vague.

    The reality is that the people making this rule regarding Blog Comments, barely know what a blog is! LOL! So a little CYA is in order for the time being.

    Ray “borderline” breaks two rules almost always, and you do as well. Self promotion and attacking others is not permitted on this blog or any blog, and there’s a fine line between an informative discussion and poking someone with a stick.

  46. Craig,

    Anna, Dustin’s wife, may or may not be from time to time (not in WA but in CA…same NAR). You’re the legal expert, but seems to me that Anna and Dustin are “the owners” and not just Dustin.

    Given this is my post, it is more likely I would be held responsible than Anna in this case. If these comments are made on your post, I do not get as “involved”. I don’t trust the NAR to know the difference between my post and his site and Anna vs. Dustin…do you?

    By making the point on my post, I see it as assisting RCG generally with regard to these new rules. Dustin did comment on the VARbuzz post in a manner that suggests that he expects RCG to comply with the new rule. Unlike lawyers, we don’t take advantage of the few days or weeks until the new rule is enacted. As soon as we know it is an issue, we address it, and don’t look for the loophole timeframe between announcement and enactment.

    I think the Rule was passed at the Legislative Meeting, but the details are still being hashed out on various blogs, as the language is (as usual) more than a bit vague.

    The reality is that the people making this rule regarding Blog Comments, barely know what a blog is! LOL! So a little CYA is in order for the time being.

    Ray “borderline” breaks two rules almost always, and you do as well. Self promotion and attacking others is not permitted on this blog or any blog, and there’s a fine line between an informative discussion and poking someone with a stick.

  47. Bob Stoneburner says:

    Data scraping of broker and individual agent sites has as been an issue for over four years. And the concern then was the same; the integrity of the information and search engine advantage. The simple truth is that the vast majority of the public does not follow IDX debate and uses multiple sites to conduct their research….so the more your listings are out there the better. The MLS’ are failing because they haven’t taken the next step. That is offer agents tools (primarily Transaction Management) which take advantage of their specific forms. They still view themselves as being the keeper of listings. And just like agents, this isn’t a value proposition anymore. Wee live in an age where the distribution of information can’t be controlled. Zillow and Trulia will eventually partner with the MLS or NAR (there are a lot of reasons why this makes sense) or continue to leap frog the system altogether by offering agents value directly (CRM content, backend applications, ect). The public doesn’t distinguish a full inventory site from the major portals. Trulia, Zillow, Redfin and Realtor.com are all good for the industry because they push the technology envelope.

  48. Ray — I think your “caps lock” button may be stuck…

    Ardell — you seem a little sensitive to Ray’s comments. I wholeheartedly admit that you see much more of his comments than me (you’re a dedicated-and-loving-it blogger, me not so much). Regardless, it seems like he struck a nerve. If he is rubbing people’s noses in “it,” then there must be something to “it” or else he would just be shouting into the wind. A couple of years ago you posted how you refunded your clients something like $70k in one year. Combine that with the fact that at least some agents are overpaid (particularly buyer agents, where the client uses information on the internet to narrow the home search before the agent is even involved), and I think the “buffet” comment has some truth to it.

    Now in fairness, I know you moderate the comments, and you exchanged several comments with him, so clearly you’re not ignoring or even censoring his larger point. I — and other RCG readers — appreciate that fact. It just seems like you’re a little overly sensitive to some legitimate criticisms and alternative models.

  49. Ray — I think your “caps lock” button may be stuck…

    Ardell — you seem a little sensitive to Ray’s comments. I wholeheartedly admit that you see much more of his comments than me (you’re a dedicated-and-loving-it blogger, me not so much). Regardless, it seems like he struck a nerve. If he is rubbing people’s noses in “it,” then there must be something to “it” or else he would just be shouting into the wind. A couple of years ago you posted how you refunded your clients something like $70k in one year. Combine that with the fact that at least some agents are overpaid (particularly buyer agents, where the client uses information on the internet to narrow the home search before the agent is even involved), and I think the “buffet” comment has some truth to it.

    Now in fairness, I know you moderate the comments, and you exchanged several comments with him, so clearly you’re not ignoring or even censoring his larger point. I — and other RCG readers — appreciate that fact. It just seems like you’re a little overly sensitive to some legitimate criticisms and alternative models.

  50. Ray,

    The reality is that there is a misperception that those who do not state a commission (because there is no SET fee) are deemed to be 6%, when in fact that is not true. Those like you who actively promote a set rate, talk as if everyone else has one…and that is not the case.

    Craig’s comments are more on target as the next frontier IS the buyer agent fee, the listing fee already having been addressed by and large.

    If you don’t go with your buyer client to see the property, how do you advise your clients with regard to the house? You lose me there. Do you think no one needs advocacy? Are those who need advocacy and advice “wrong” to keep “the buffet table” open? MOST of my clients need advocacy and advices…almost all.

    Reminds me I wanted to do a post on an Extreme Home Inspection. Many buyers think the average home inspection is sufficient, when in fact there are many things outside of the written report that need addressing. You need someone who can read between the lines.

    I am all for choices in the marketplace, Ray. But I have many friends over the years who tried negative campaigns (Exclusive Buyer Agency prime example) who badmouthed other market choices, as you are. More choices does not make the current choices bad ones…just not for everyone.

    It’s not all about commission dollars, Ray. Saving $6,000 on commission and overpaying by $50,000 or overlooking a $20,000 potential repair…is not a good tradeoff. All companies who treated THEIR model as a mission AGAINST all other models…has failed. Negative campaigning is almost never a good strategy except in the clinches (with an individual client) and not as broad promotion technique.

  51. Craig,

    I’m more of a Nordstrom’s Rack gal, myself. But I don’t tell people who buy at Nordstrom’s that they are stupid not to by at the Rack.

    What does “the buffet table is over” mean? Don’t more choices mean “the buffet table is now open”? Aren’t more options a “buffet” and fewer options not a buffet?

    What does “the buffet table is over” mean, as it sounds like a flame against someone and many someones, and flaming is not permitted on any blog.

  52. Craig,

    I’m more of a Nordstrom’s Rack gal, myself. But I don’t tell people who buy at Nordstrom’s that they are stupid not to by at the Rack.

    What does “the buffet table is over” mean? Don’t more choices mean “the buffet table is now open”? Aren’t more options a “buffet” and fewer options not a buffet?

    What does “the buffet table is over” mean, as it sounds like a flame against someone and many someones, and flaming is not permitted on any blog.

  53. To both Craig and Ray,

    The DOJ vs. NAR suit emanated from anti-traditional office campaigns. It is not a small issue.

    Traditional companies are forced to display their inventory on all company sites via IDX display. Brokers refused initially to post their listings via IDX on sites that said they where “awful” choices. The compromise resolution in most cases is that “discount” models cannot call everyone else “evil” and bad choices.

    Long story…big issue…I’m not taking it personal at all. With NAR adding language in the Code of Ethics that could hold Dustin and his wife liable for Ray’s remarks, I am being more vigilant as I love them and would hate to see them hurt in any way. I’m always an advocate for someone. Right now it’s the owners of this site.

    Sometimes you just have to trust that I know what I’m doing and it is NOT personal.

  54. Craig,

    Ray can “shout into the wind” all he wants. RCG is not “the wind”. :)

  55. Ardell — a good point, as Ray’s analogy is certainly open to multiple interpretations. If “buffet” means choices, then you are right, the modern trend is towards “buffet-style” service. In context, though, I interpreted Ray’s analogy to mean “easy money (food) that does not require much effort and which can lead to morbid opulence (obesity)” — or something along those lines. Again, you know more about “flaming” than me so perhaps Ray’s comments were inappropriate. I just didn’t get that.

  56. For anyone interested in the breaking news about NAR imposing duties on Blog owners regarding blog comments go to:

    http://varbuzz.com/more-concerns-raised-about-nars-amended-standards-of-practice-on-deleting-or-clarifying-false-or-misleading-blog-comments/

    There’s even a quasi-legal opinion in there for Craig :) (in the comments)

  57. Ardell — Is Dustin a member of NAR? And what exactly is the new language? Plus, per your #25, you’re not even sure if the new rule is effective as of today.

  58. Regarding your 38 see link in 37. I don’t want to join the many blogging on this topic by writing a post on the subject. Feel free to investigate via that link and write a post if you like. I don’t like posts about “rules” :)

  59. Ardell — One final point (gotta get back to work!) addressing your final paragraph of #32: Everyone who reads this blog or otherwise knows you undoubtedly agrees that your services are worth the “traditional” and still common 3% buyer’s agent fee. The problem is that you are probably in the top 1% of agents in terms of the quality of service (including your knowledge, your resources, your experience, etc.) provided by an agent. The vast majority of agents provide a lower quality of service (because they’re younger, or less motivated, or unethical, or uneducated, or whatever) yet they get paid the same.

    PLUS, although your services are worth 3%, there is very little pressure on you or anyone else to reduce your buyer’s agent commission. In such an environment, it will always be an open question as to whether or not an agent’s services — even your services — are really worth the fee paid. In order for the market to ascribe a “true” value to a service, the market must be unfettered and uninfluenced by some of the market participants (such as with a monopoly). Given how the MLS controls the marketplace (via listing rules), the market is unable to determine the “true” value of a buyer’s agent.

  60. Ardell — One final point (gotta get back to work!) addressing your final paragraph of #32: Everyone who reads this blog or otherwise knows you undoubtedly agrees that your services are worth the “traditional” and still common 3% buyer’s agent fee. The problem is that you are probably in the top 1% of agents in terms of the quality of service (including your knowledge, your resources, your experience, etc.) provided by an agent. The vast majority of agents provide a lower quality of service (because they’re younger, or less motivated, or unethical, or uneducated, or whatever) yet they get paid the same.

    PLUS, although your services are worth 3%, there is very little pressure on you or anyone else to reduce your buyer’s agent commission. In such an environment, it will always be an open question as to whether or not an agent’s services — even your services — are really worth the fee paid. In order for the market to ascribe a “true” value to a service, the market must be unfettered and uninfluenced by some of the market participants (such as with a monopoly). Given how the MLS controls the marketplace (via listing rules), the market is unable to determine the “true” value of a buyer’s agent.

  61. “In context, though, I interpreted Ray’s analogy to mean “easy money (food) that does not require much effort and which can lead to morbid opulence (obesity)

  62. My gosh, Ardell, you’ve mellowed remarkably since you started blogging. I think back to the days when you and I regularly engaged in vituperative, viscious, and verbally violent posts and counterposts. (Today’s letter: V!) Ah, those were the days…

    I’ll try to not poke anyone. I continue to assert, however, that self-promotion is fine because its the ONLY reason I blog between the hours of 9-5 (if “self-promotion” includes educational posts that gets my name “out there”).

    And now — back to the briefs….

  63. Craig,

    I often don’t charge 3%. Many often don’t. The misnomer is that because brokerages are not allowed under anti-trust provisions to discuss these issues, that they all charge the same, and that is not the case.

    We are told that we are not allowed to discuss commissions amongst one another, and that is a legal issue. I know you don’t specialize in that aspect of the law, but for 20 years agents are taught that we are not allowed to discuss fees with agents from other brokerages. Consequently irregardless of whether or not it is a flame, it seems only the non-traditionals are free to speak on this topic, and that puts everyone else in a very bad position, since they are not allowed by law to “defend themselves” against the erroneous accusation.

    Your perception that all fees are set at 3% or 6% is incorrect. The new rule imposes on me the duty to tell you (and Ray) so. (or delete or edit your comments). A sticky wicket for sure.

  64. Craig,

    I am most often NOT a Realtor Member…I currently am. It imposes a different standard and my alternative is to again opt out. I’m thinking about it, but it’s not likely possible.

  65. Craig,

    Let me explain this at your level…the 3% is a retainer…not a fee. It is a set aside by the seller to be negotiated once a buyer is in the room. You negotiate it for your clients and we negotiate it for ours.

    Why do you assume that we don’t do (with it) what you do (with it)? It’s an erroneous assumption, and under the new rules I must point out that you are erroneous in your assumption.

  66. Craig,

    Let me explain this at your level…the 3% is a retainer…not a fee. It is a set aside by the seller to be negotiated once a buyer is in the room. You negotiate it for your clients and we negotiate it for ours.

    Why do you assume that we don’t do (with it) what you do (with it)? It’s an erroneous assumption, and under the new rules I must point out that you are erroneous in your assumption.

  67. I’m not kidding — I got a mountain of work. Ardell, I will address #46 via my next post (probably next week). Thank you for your patience — and good night! Tip generously!

  68. Craig,

    You can respond (or not). The new rule seems to stop at my telling you what I have told you. Your response is not required. :0

  69. Hmmmmm …so much to say but I will just comment on what popped in my head….

    I got a call yesterday from the Seattle Home Show to see if we are interested in October show again. They are having a hard time filling up the booths. In looking at our schedule of Tacoma Show, Puyallup Fair, and Kent Cornucopia Days this summer I don’t think I can do 4 months of these exhausting shows.

    I would encourage you Ardell to listen to what the masses are telling us. Just one day at The Puyallup Fair, in our booth, you will hear the same thing repeated in so many different ways. You will hear the disgust from the public of OUR profession. You will hear at least 5x in a day “Well I always found my home anyway!” and ” I wish I knew about this money” and “This must be illegal” and “Why doesn’t everyone do this?” over and over and over.

    Trust me when I say this. I had no reason to to do this. My wife and I are nurses and 1st and foremost I’m an investor. I could have remained a Broker with Pepper Realty Inc. and all would have been fine.

    I remember telling my wife on my last sale with Pepper Realty Inc. that I made 13,100 in less then 4 hours work. I remember the listing vividly. Met the sellers in Proctor district of North Tacoma, gave the CMA, shot the pictures, and clicked the mouse. 48 hours later I got an offer from Matt Hume of the Hume Group and it SOLD. When I got that commission check I told my whole family about my “buffet belief.” My brother who was a Broker in El Paso said I was nutts and to this day probably still doesn’t understand what we do.

    However, citizens of the southend never heard of Red Fin. They were not servicing Pierce, Kitsap, Thurston, and Mason counties. I knew I could do better and wanted to get this message out for those interested in listening.

    It is our goal to give 100% back but that doesn’t mean we are the best and everyone else is worse. We have a specific model that we continually tweak to adapt to changes around us. ——Anyway thats enough—-If there was no Ray Pepper it would have been someone else.

    Lastly Ardell, I wanted to make a comment on our Agents not showing our Buyers homes you stated above. We are FULL SERVICE in every aspect that you are and we ALL show our clients homes they request. However, we do NOT give tours of properties without our Buyers doing their due diligence first. Its all explained on the website.

    The email I sent you from an incompetent agent who dared to challenge me on rules of the NWMLS was once again showing why this profession continues to need education of its members. In health care and the US Army I have never seen such unprofessional behavior and I’m proud to be a very small part of the change to a profession that surely needs it.

  70. Hmmmmm …so much to say but I will just comment on what popped in my head….

    I got a call yesterday from the Seattle Home Show to see if we are interested in October show again. They are having a hard time filling up the booths. In looking at our schedule of Tacoma Show, Puyallup Fair, and Kent Cornucopia Days this summer I don’t think I can do 4 months of these exhausting shows.

    I would encourage you Ardell to listen to what the masses are telling us. Just one day at The Puyallup Fair, in our booth, you will hear the same thing repeated in so many different ways. You will hear the disgust from the public of OUR profession. You will hear at least 5x in a day “Well I always found my home anyway!” and ” I wish I knew about this money” and “This must be illegal” and “Why doesn’t everyone do this?” over and over and over.

    Trust me when I say this. I had no reason to to do this. My wife and I are nurses and 1st and foremost I’m an investor. I could have remained a Broker with Pepper Realty Inc. and all would have been fine.

    I remember telling my wife on my last sale with Pepper Realty Inc. that I made 13,100 in less then 4 hours work. I remember the listing vividly. Met the sellers in Proctor district of North Tacoma, gave the CMA, shot the pictures, and clicked the mouse. 48 hours later I got an offer from Matt Hume of the Hume Group and it SOLD. When I got that commission check I told my whole family about my “buffet belief.” My brother who was a Broker in El Paso said I was nutts and to this day probably still doesn’t understand what we do.

    However, citizens of the southend never heard of Red Fin. They were not servicing Pierce, Kitsap, Thurston, and Mason counties. I knew I could do better and wanted to get this message out for those interested in listening.

    It is our goal to give 100% back but that doesn’t mean we are the best and everyone else is worse. We have a specific model that we continually tweak to adapt to changes around us. ——Anyway thats enough—-If there was no Ray Pepper it would have been someone else.

    Lastly Ardell, I wanted to make a comment on our Agents not showing our Buyers homes you stated above. We are FULL SERVICE in every aspect that you are and we ALL show our clients homes they request. However, we do NOT give tours of properties without our Buyers doing their due diligence first. Its all explained on the website.

    The email I sent you from an incompetent agent who dared to challenge me on rules of the NWMLS was once again showing why this profession continues to need education of its members. In health care and the US Army I have never seen such unprofessional behavior and I’m proud to be a very small part of the change to a profession that surely needs it.

  71. Ray,

    I absolutely agree that change is welcome and warranted and that it is people like you who invoke change. 100% agree.

    I’m 100% positive that your Full Service and my Full Service are not one in the same most times. If you “give it all back” than you are a philanthropist who collects no fee for your services. Businesses and Philanthropic Ventures are two completely different things.

    How much can a business model itself toward a philantropic venture? You make a living by means outside of real estate. Is it fair to use a charity effort as a barometer?

  72. Bob,

    The mls is not a keeper of listings. The mls is a system of cooperation and is much less about data than process.

  73. Ardell, again you are confused about how we make money. We don’t make money off commissions. That small amount goes to the Agents. We want to refund 100% and we are definitely not a charity outfit.

    Lead Generation Ardell. Lead Generation. Just like Google, Yahoo, etc.

    The fundamental flaw of past real estate models is that the income is derived from commissions. Whenever there is a “golden carrot” the chance of an agents interests out weighing that of their clients increases measureably.

    We have eliminated that element.

  74. Ardell, again you are confused about how we make money. We don’t make money off commissions. That small amount goes to the Agents. We want to refund 100% and we are definitely not a charity outfit.

    Lead Generation Ardell. Lead Generation. Just like Google, Yahoo, etc.

    The fundamental flaw of past real estate models is that the income is derived from commissions. Whenever there is a “golden carrot” the chance of an agents interests out weighing that of their clients increases measureably.

    We have eliminated that element.

  75. We need to talk, Ray. Lead generation ADDS to consumer cost. It does not reduce consumer cost. I’ll give you a call.

  76. Hi Ray,

    It was great talking with you. Thanks for taking the time. I appreciate your revealing in comment 52 that you are a Lead Generator. I never knew that about $500 Realty, and thank you for explaining that to me over the phone.

  77. It was a pleasure Ardell. You are very funny and your enthusiasm for Real Estate is very apparent. Continued success!

  78. Well Ray it looks like every body made nice. Thank you again for bringing some reality into a Real Estate discussion and being honest about it.

    The same objection that I have about these threads is a reoccurring theme. The buyer gets nothing for a reduced fee. That seems to be what the Real Estate industrial complex has come down to.

  79. OK, Ray, I’ll bite (and perhaps revive the thread in the process): What is “lead generation”? I’ve got the general definition (who doesn’t love wikipedia ?) but what does it mean in your specific instance? Thanks for the education.

  80. David,

    Having spoken with the owners of several alternative business models, it seems that they had an experience where an agent collected a large fee for doing what they perceived to be nothing. That is why they think they are giving “full service” at the reduced fee.

    During the hot market, there were more cases of agents collecting a large fee for doing less than an agent might have to do today. Consequently, several companies formed under the perception that full was not worth the cost.

    The biggest problem in our industry is that the fee tnds to be the same for all experience levels and all types of transactions from easy to hard. In fact many times the cost for a hard one is less than the cost for an easy one.

    By having a one size fits all fee, we have created an environment where the easy one is tired of paying for the hard one.

  81. David,

    Having spoken with the owners of several alternative business models, it seems that they had an experience where an agent collected a large fee for doing what they perceived to be nothing. That is why they think they are giving “full service” at the reduced fee.

    During the hot market, there were more cases of agents collecting a large fee for doing less than an agent might have to do today. Consequently, several companies formed under the perception that full was not worth the cost.

    The biggest problem in our industry is that the fee tnds to be the same for all experience levels and all types of transactions from easy to hard. In fact many times the cost for a hard one is less than the cost for an easy one.

    By having a one size fits all fee, we have created an environment where the easy one is tired of paying for the hard one.

  82. Ardell — excellent point. I would also add “and the client with the inexperienced agent is tired of paying for the expert” because that is also the case. There is little differentiation between fees paid to brand new agents versus those paid to old war-horses like… uh, well, you get the point.

  83. Lead Generation for a real estate company can include any of the following, some that can pay for advertising their services and some that cannot:
    plumbers, electricians, photographers, stagers, home inspectors, title, escrow, ATTORNEY’S, mortgage companies, landscapers, roofers, insurance companies, car dealerships, local stores, churches, on and on and on. Many of these partners want affiliation with 500 Realty for they understand that we offer the BEST in value for the consumer when buying and selling.

    We have over 60 Lead Generation partners that assist us in advertising and promotion of 500 Realty. I believe we just list 15 or so on the site. We are rolling out the new website in the next 90 days and ALL will be listed.

    Lead Generation is the key for Red Fin now along with Zip Realty and Zillow. Craig there are thousands of ways to profit in real estate. Real Estate commissions are just 1 and should never be a primary source of revenue in our new technology age.

    Respa has clamped down on the very high revenue streams of the past but I assure you partnerships through Lead Generation will continue as long as the symbiotic relationship is profitable on both ends.

  84. Lead Generation for a real estate company can include any of the following, some that can pay for advertising their services and some that cannot:
    plumbers, electricians, photographers, stagers, home inspectors, title, escrow, ATTORNEY’S, mortgage companies, landscapers, roofers, insurance companies, car dealerships, local stores, churches, on and on and on. Many of these partners want affiliation with 500 Realty for they understand that we offer the BEST in value for the consumer when buying and selling.

    We have over 60 Lead Generation partners that assist us in advertising and promotion of 500 Realty. I believe we just list 15 or so on the site. We are rolling out the new website in the next 90 days and ALL will be listed.

    Lead Generation is the key for Red Fin now along with Zip Realty and Zillow. Craig there are thousands of ways to profit in real estate. Real Estate commissions are just 1 and should never be a primary source of revenue in our new technology age.

    Respa has clamped down on the very high revenue streams of the past but I assure you partnerships through Lead Generation will continue as long as the symbiotic relationship is profitable on both ends.

  85. Ray — so does “lead generation” mean anything other than “advertising”? It sounds like it does — it sounds like you may also get paid for referring or recommending your clients use a particular service provider who is a “lead generation partner.” Is that right?

    If so, do your clients know that you are being paid by the provider in exchange for the referral? Attorneys, of course, are prohibited from acting as a “lead generation partner” in this fashion — the only thing they can do is advertise. Any referral to an attorney must be “genuine” — i.e. not paid for by the attorney.

    I agree that there are many ways to make a living in the real estate business. However, I don’t agree that clients are best served by a model where the actual client service is not the primary focus of the business. I think your model denigrates the services provided by an agent or attorney — i.e. the professional used by the client in facilitating the transaction and protecting the client’s interest. I am supremely comfortable with a model where the business is driven by the quality and cost of the service provided, not by ancillary income streams. My complaint is simply — and in a nutshell — that agents are overpaid (generally speaking of course, as there are exceptions).

  86. Ray — so does “lead generation” mean anything other than “advertising”? It sounds like it does — it sounds like you may also get paid for referring or recommending your clients use a particular service provider who is a “lead generation partner.” Is that right?

    If so, do your clients know that you are being paid by the provider in exchange for the referral? Attorneys, of course, are prohibited from acting as a “lead generation partner” in this fashion — the only thing they can do is advertise. Any referral to an attorney must be “genuine” — i.e. not paid for by the attorney.

    I agree that there are many ways to make a living in the real estate business. However, I don’t agree that clients are best served by a model where the actual client service is not the primary focus of the business. I think your model denigrates the services provided by an agent or attorney — i.e. the professional used by the client in facilitating the transaction and protecting the client’s interest. I am supremely comfortable with a model where the business is driven by the quality and cost of the service provided, not by ancillary income streams. My complaint is simply — and in a nutshell — that agents are overpaid (generally speaking of course, as there are exceptions).

  87. “Respa has clamped down on the very high revenue streams of the past…”

    RESPA exists to that purpose. RESPA exists to eradicate those revenue streams. That is not something new…it is simply something some of the new business models didn’t know. RESPA was enacted in 1974.

    Many come into our industry thinking they see a big revenue source that no one ever thought of before. Nothing new under the sun. If no one else is doing it, often it is because it is illegal or at best…unethical.

    Ray,

    This may help. The reason it is unethical for agents to receive monies to recommend or refer someone (except other agents and/or if they own the ancillary service – but that is another subject) is the government wants to assure people that recommendations are for best options and not because of “kickbacks”.

    You can’t have it both ways. FULL servce = Representation. REPRESENTATION = no payment from ancillary service providers.

    There is likely a way for you to do what you are trying to do, but I don’t think you can call yourself a “FULL SERVICE for less company”, if you do that.

    RESPA limits the monies you receive from ancillary providers to the actual and provable cost of the advertisement. If your site costs $400 a month in actual cost, and advertisers have a space equal to 1/100th of the total space (dimishes as you add advertisers) then you can collect 1/100th of the cost from that service provider for his share of the “ad” cost. Consult an attorney familiar with RESPA for updated guidelines and guidance.

    Ancillary services can spend a lot of money on advertising themselves. They cannot pay any money to you because you referred them to one of your “leads”.

    Sorry to do this on blog, but you opened the door and Craig stepped in it. It is why I called you when you said you were a “lead generator” in the comment. Generally speaking there are laws preventing Brokerages from being “lead generators” except with respect to services they own and operate, or referrals to other licensed real estate agents.

  88. Ardell — I prefer “stepped THROUGH it” as more consistent with the analogy (a door) and less consistent with stepping in “it” (where we all know what “it” usually is).

    THat said, thank you for addressing these legal issues, which I ignored in my prior comment. I am not familiar enough with RESPA to confirm your analysis, but certainly as a general matter it appears on target.

  89. Craig #60 – agree.

    Craig #64 “My complaint is simply — and in a nutshell — that agents are overpaid (generally speaking of course, as there are exceptions).”

    Let’s take that a step further. Even though I am at the best of times worth more, I am only worth more if the service needed is worth that price. Then it becomes my option to work for less OR refer the client to a lesser agent who charges less.

    I’ll put that into an attorney context. I have a lawyer friend who gets $500 an hour and a $5,000 minimum. If someone comes to him for something a paralegal can do, he can do it at the paralegal cost OR he can call in the paralegal and introduce them and leave.

    The agent model allows for that, it simply doesn’t practice it well in many cases, and doesn’t reveal the lower cost to other people when they do.

    I correct myself – agent Teams practice it all the time. They collect the higher fee and pay the team with it, and assign the lesser duties to the team members. If no higher level skills are needed in a given transaction, then they keep the difference as profit to the Team Leader with the higher skill level, who is “on call”.

  90. Craig and Ardell we are light years ahead of you in/re to what is legal and what is not in/re to Respa, Attorney’s limitations for referrals, Mtg companies, Title, Escrow, etc. As you both should know nobody is ever “referred.” However, they are and will continue to be all over our website functioning as “service providers.”

    Fortunately 500 Realty has relationships with 6 of the BEST Attorney’s in Real Estate in Washington and Arizona and the Brokers Division in Olympia consistently checks our site for compliance. Trust me I know this.

    Craig, the 500 Realty model of real estate compensates our Agents at a minimum of 80.00 per hour as I told Ardell. Our clients are out looking for their own home and our Agents are responsible for opening the doors, writing the contracts, offer-counter/offer, inspection, and closure. Our agents spend about 30 hours-40 per client. They receive virtually ALL the commission which is usually 2500.00-3000.00. We feel that is MORE then enough. As an RN I only get 34.60 per hour.

    The client is and always will be the focus of the business. If you were getting paid 80.00 an hour I would hope you serviced your client as well as we do. Just read the testimonials. They are 100% real and we NEVER had a customer with a complaint other then waiting on a short sale acceptance.

    Under the 500 Realty model of real estate the Attorney is essential for closing transactions for our sellers who find unrepresented Buyers. However, many times the seller wants an Agent to step in to close the transaction and thus we utilize “fee for service.” Its all about servicing the customer and it always will be.

    If the customer is unhappy with what we offer, Lead Generation becomes futile and our model of real estate will join the masses of closed real estate offices across the country.

  91. Craig and Ardell we are light years ahead of you in/re to what is legal and what is not in/re to Respa, Attorney’s limitations for referrals, Mtg companies, Title, Escrow, etc. As you both should know nobody is ever “referred.” However, they are and will continue to be all over our website functioning as “service providers.”

    Fortunately 500 Realty has relationships with 6 of the BEST Attorney’s in Real Estate in Washington and Arizona and the Brokers Division in Olympia consistently checks our site for compliance. Trust me I know this.

    Craig, the 500 Realty model of real estate compensates our Agents at a minimum of 80.00 per hour as I told Ardell. Our clients are out looking for their own home and our Agents are responsible for opening the doors, writing the contracts, offer-counter/offer, inspection, and closure. Our agents spend about 30 hours-40 per client. They receive virtually ALL the commission which is usually 2500.00-3000.00. We feel that is MORE then enough. As an RN I only get 34.60 per hour.

    The client is and always will be the focus of the business. If you were getting paid 80.00 an hour I would hope you serviced your client as well as we do. Just read the testimonials. They are 100% real and we NEVER had a customer with a complaint other then waiting on a short sale acceptance.

    Under the 500 Realty model of real estate the Attorney is essential for closing transactions for our sellers who find unrepresented Buyers. However, many times the seller wants an Agent to step in to close the transaction and thus we utilize “fee for service.” Its all about servicing the customer and it always will be.

    If the customer is unhappy with what we offer, Lead Generation becomes futile and our model of real estate will join the masses of closed real estate offices across the country.

  92. Ardell #66 — An attorney could not charge a $5k “minimum.” Any fee must be reasonable.

    A $5k “minimum” fee would run afoul of that rule on a regular basis. If the client pays $5k but only gets $2k worth of paralegal services, the attorney keeps the $3k difference at his peril. (I think the $500 hourly rate might pose a problem too in this market, unless the attorney is really, really knowledgable and experienced.)

    The same logic applies to agents, except there is no rule requiring the that the fee paid to the agent be “reasonable.” Indeed, if there were such a rule, I think the industry would have evolved towards a more modern (and comsumer-friendly) model a long time ago.

  93. Craig,

    I once had the great privelege of speaking with a CAR (California Association of Realtors) attorney one on one about RESPA. It was very enlightening and much of what he said is not in print, specifically.

    The confusion comes in because RESPA doesn’t name “landscaper” or “plumber” and focuses more on “lender”. I think they leave it to the States to enact laws about “Title Companies” and “home warranty companies”, etc…

    Large companies “get” the big picture of the law, and train their agents to “just say no” to revenue streams from ancillary service providers. They then incorporated the revenue stream for the brokers (eradicating if for the agents) by buying those companies, or at least an interest in those companies. They then added the “disclosure of ancillary services ownership” as an addendum to the contract. Being “an old war horse” I was around when that change took place :)

    States largely addressed the issue by making the rule that no licensee can receive monies during the course of or related to a real estate transaction, except through their Broker. They then trusted the Brokers to know what the average Joe Agent doesn’t.

    The problem in most states is they make it too easy to BE a Broker…hence the confusion and potential abuse.

    HUD says it best: A lender can give you 1,000 pens with the lender’s name on it…but not ONE pen with YOUR name on it. They can promote themselves, but not the agent or the Broker. People should understand that to mean that no profit to the Broker should come from the ancillary service provider…they should expand that to mean from anyone, and not just the named services like “lender”…and most large companies do. They can spend all the money in the world to promote themselves, but not a dime to promote the Broker.

    Where the train came off the track is when RESPA allowed Brokerages to OWN ancillary services, and get around the rule that way. A big loophole, if you will. So since Ray IS the company, he needs specific legal advice regarding how brokers profit without breaking State of Federal laws.

    The CAR attorney helped me with my confusion (when I moved to the West Coast) this way (since he went to Law School where I am from, he noticed my confusion right away). He said on the East Coast, typically when there is a law, a company will ask “how do I run my business so that there is no hint of impropriety” (what I was used to). He said conversely on the West Coast a business is more likely to look for a legal way around it OR factor the potential cost of breaking the law into the cost of doing business. If the penalty is rarely enforced, then they might ignore it until someone gets caught. If the profit is well in excess of the fine for doing it wrong, the business decision might be to rake in the proceeds and pay the fine.

    Not sure if he is correct…but it helped me understand why some “just say no” while others work toward highest profit within different boundaries.

  94. Craig,

    I once had the great privelege of speaking with a CAR (California Association of Realtors) attorney one on one about RESPA. It was very enlightening and much of what he said is not in print, specifically.

    The confusion comes in because RESPA doesn’t name “landscaper” or “plumber” and focuses more on “lender”. I think they leave it to the States to enact laws about “Title Companies” and “home warranty companies”, etc…

    Large companies “get” the big picture of the law, and train their agents to “just say no” to revenue streams from ancillary service providers. They then incorporated the revenue stream for the brokers (eradicating if for the agents) by buying those companies, or at least an interest in those companies. They then added the “disclosure of ancillary services ownership” as an addendum to the contract. Being “an old war horse” I was around when that change took place :)

    States largely addressed the issue by making the rule that no licensee can receive monies during the course of or related to a real estate transaction, except through their Broker. They then trusted the Brokers to know what the average Joe Agent doesn’t.

    The problem in most states is they make it too easy to BE a Broker…hence the confusion and potential abuse.

    HUD says it best: A lender can give you 1,000 pens with the lender’s name on it…but not ONE pen with YOUR name on it. They can promote themselves, but not the agent or the Broker. People should understand that to mean that no profit to the Broker should come from the ancillary service provider…they should expand that to mean from anyone, and not just the named services like “lender”…and most large companies do. They can spend all the money in the world to promote themselves, but not a dime to promote the Broker.

    Where the train came off the track is when RESPA allowed Brokerages to OWN ancillary services, and get around the rule that way. A big loophole, if you will. So since Ray IS the company, he needs specific legal advice regarding how brokers profit without breaking State of Federal laws.

    The CAR attorney helped me with my confusion (when I moved to the West Coast) this way (since he went to Law School where I am from, he noticed my confusion right away). He said on the East Coast, typically when there is a law, a company will ask “how do I run my business so that there is no hint of impropriety” (what I was used to). He said conversely on the West Coast a business is more likely to look for a legal way around it OR factor the potential cost of breaking the law into the cost of doing business. If the penalty is rarely enforced, then they might ignore it until someone gets caught. If the profit is well in excess of the fine for doing it wrong, the business decision might be to rake in the proceeds and pay the fine.

    Not sure if he is correct…but it helped me understand why some “just say no” while others work toward highest profit within different boundaries.

  95. Craig,

    I agree. Part of the problem, which I addressed in my comments to the post in the pingback of comment #56 to Jim Duncan, is that the government gave broad latitude to the Realtor Trade Association for many, many years.

    The privelege of being “a self-governed body” was largely granted because the government deemed the objectives of an agent to be in line with the objectives of a seller of a home…and we all represented the sellers of homes (for approx. 85 years). The derailment began with the inception of “Buyer Agency”…the train is off the track. I explain that in length in my comments on Jim’s post, if you are interested in the history and current status of that dilemma. With privelege comes duty and when the DOJ starts suing NAR for ANYTHING it is a big red flag that the privelege will be expunged (or is already) given the duty was not, or can no longer be through no fault of the association, complied with.

    Craig, can you tell me who spearheaded the “reasonable cost” rule for attorneys? Was it the Bar Association and different from one state to the next? Was it self imposed by your Trade Association, or imposed on your profession by law?

  96. Commenter #63 whomever you may be…who are you talking to?

  97. Ardell — the Bar Association is really the only truly self-regulating professional body. There are no “licensing statutes” that apply to lawyers. This is due to the unique role of lawyers in our society — I’d need more time to address in any greater detail. Anyway, I think that rule has been around for a very long time. There are different rules in each state, but I think this one is pretty common.

  98. “Ardell — the Bar Association is really the only truly self-regulating professional body.”

    Craig, that is your opinion vs. fact, correct?

    NAR has always been a self regulating professional body, and I don’t think that has changed. The only issue is how well each self regulates, which becomes a matter of opinion and not fact.

    Clearly MLS and NAR and WAR and SKCAR have lots and lots of rules that “self-regulate”. They do not address commission amounts at all, as they perceive any discussion between Brokers about commission amounts to be an anti-trust violation.

    If memory serves me, the legal profession at one time had a published schedule of “reasonable” fees, somewhat like Title Companies. I’m going back before your time, and I think that schedule (like a car blue book) was done away with in the late 70s or early 80s.

    Many insurance companies have “reasonable” rates they will pay under medical insurance for standard procedures. Dentists, doctors, etc…, which do not control what they can charge, but controls how much the insurance company will pay for a given procedure.

  99. “Ardell — the Bar Association is really the only truly self-regulating professional body.”

    Craig, that is your opinion vs. fact, correct?

    NAR has always been a self regulating professional body, and I don’t think that has changed. The only issue is how well each self regulates, which becomes a matter of opinion and not fact.

    Clearly MLS and NAR and WAR and SKCAR have lots and lots of rules that “self-regulate”. They do not address commission amounts at all, as they perceive any discussion between Brokers about commission amounts to be an anti-trust violation.

    If memory serves me, the legal profession at one time had a published schedule of “reasonable” fees, somewhat like Title Companies. I’m going back before your time, and I think that schedule (like a car blue book) was done away with in the late 70s or early 80s.

    Many insurance companies have “reasonable” rates they will pay under medical insurance for standard procedures. Dentists, doctors, etc…, which do not control what they can charge, but controls how much the insurance company will pay for a given procedure.

  100. Ardell — my statement was a fact, not an opinion. While NAR, WAR, and SKCAR are all “self-regulating,” that regulation does not affect a member’s ability to engage in that profession. There may be consequences within each association for a violation of the rules, but the agent will continue to be able to legally act as an agent because ultimately it is the State of WA that regulates and licenses agents.

    In contrast, there is no state regulation or licensure of attorneys. ALL regulation and licensure is via the Bar Association. Because attorneys must be able to represent individuals against the state (or city, or county, or any other governmental entity) there would be an inherent conflict if that governmental entity had control over regulating and licensing of attorneys. To eliminate that conflict, and to allow lawyers to operate unfettered in the justice system, the only thing that regulates lawyers is a body of lawyers, i.e. the bar association.

    That whole anti-trust violation thing remains a mystery to me. When I get some free time (probably 5 minutes after my fatal coronary) I would love to research the issue. I suspect that the “commission discussion = anti-trust violation” is a simplification of a larger issue.

  101. “the only thing that regulates lawyers is a body of lawyers, i.e. the bar association.”

    That is because they self regulate well. If they stopped self regulating well, and consumers were getting damaged as a result, that would change.

    “…that regulation does not affect a member’s ability to engage in that profession.”

    That is less true in the rest of the Country, than it is here, Craig. Not sure about all of WA. In most of the country it is near impossible to be in the real estate profession without being a member of NAR and the local association. Here we have MLS forms, and the MLS is not the Board of Realtors. In most of the Country they are not two separate and distinct entities, and the standard contracts are Board Forms and the tools (like how we get into houses) are disbursed by the Board office. So if you are not a memeber of the Board of Realtors in most places, it is near impossible to function as a real estate agent.

    We are the exception to that rule.

  102. Ardell — “near impossible” vs. impossible. The bar association is the ONLY regulating authority — and the dispositive regulating authority as well — unlike brokers or any other professionals. Per my fave pagewikipedia:

    In some jurisdictions, either the judiciary or the Ministry of Justicedirectly supervises the admission, licensing, and regulation of lawyers. Other jurisdictions, by statute, tradition, or court order, have granted such powers to a professional association which all lawyers must belong to.[110] In the U.S., such associations are known as mandatory, integrated, or unified bar associations.

    Honesly, Ardell, its a fact. Lawyers are different. (insert smart-alecky comment here.)

  103. Since you like Wikipedia so much…

    The National Association of Realtors (NAR) is an example of an SRO [Self Regulatory Organization] that fills the vacuum left by the absence of government oversight or regulation. The NAR sets the rules for Multiple Listing Services and how brokers use them. Another example is the American Medical Association which sets rules for ethics, conflicts, disciplinary action, and accreditation in medicine.

    So I guess we’re more like doctors than lawyers? :)

  104. “Honesly, Ardell, its a fact. Lawyers are different.”

    Yes, Craig. I’m more than happy to agree that lawyers are in fact, different.

  105. More from Wikipedia (from your link, Craig)

    “The largest voluntary professional association of lawyers in the English-speaking world is the American Bar Association.” Emphasis on the third word “VOLUNTARY”

    As long as the Bar voluntarily polices itself well…it will remain that way. The day they don’t…it will change.

    Not sure if real estate licensing is older than NAR (100 years)…I’m not old enough to know the answer to that one. Maybe that oldest real estate agent in the Country, who happens to be in Ballard, knows the answer to that one.

  106. Ardell — #74, exactly! Doctors (like agents) are ultimately regulated by the state, notwithstanding their self regulating organization. Lawyers are unique in that their self regulating organization is the only and ultimate arbiter.

    #75, thank you for inserting the requested smart-alecky comment!

  107. Thanks for the dance, Craig. Always great fun!

  108. I get last word this time — a lawyer does not have to belong to the ABA (or the King Co Bar Assoc, or any other voluntary bar association) but MUST belong to state bar association in order to practice law.

    No mas!

  109. You are on a subject close to my heart. My company A Spring Cleaning has been preparing properties for sale since 1988. For about ten years I had a carpenter and painter who I kept pretty busy. As a licensed Real Estate agent it was clear there was no contest which made more money for me. Being a Real Estate sales person is hard, brutal, work of long hours constantly looking for the next client. A carpenter and painter find work by just being in a neighborhood.

    I have tried unsuccessfully to merge the labor portion with the Real Estate sales portion of my business model for the past ten years. It’s hard to make the adjustment. Three Real Estate companies have asked me to move my license over what they termed liability issues. One Broker filed a complaint against me with the NWMLS. She wanted it to be clear to any agent I might do work for that I was a licensed Real Estate agent in the State of Washington.

    Going back to the 1980s I was also a licensed Pest Inspector which is all that is required to be a Home Inspection Company in the State of Washington. That company was Aardvark Home Inspections.

    OK, so agents would, and do, refer me work and I for many years recommended agents who I trusted. There were never any kick backs. When the markets really heat up there is that pushy agent who wants a whole lot of something for nothing. Agents will tell me that they have a lot of work to keep me busy if I just do this that and the other thing at a reduced rate.

    All of that is back ground on what I would like to see from a Real Estate company.

    I would like for a Real Estate agent to know something about construction. It would be great if a Real Estate agent actually understood the court system, because I don’t think agents get sued enough any more. I have a saying:”Sue me first.” Agents should be held accountable for what they put together. Agents should know the liabilities of their actions.

    Agents should know the market place they currently represent. They should be required to perform in a diligent manner for the benefit of the client they represent. They should be able to show they have done the work to make sure the property is well priced and in a condition the buyers can handle.

    It’s nice to say people should be responsible for themselves, but the agent should also be a responsible party to a Real Estate transaction.

    Enough ranting about that.

    I do think buyers and sellers should be allowed a one stop shopping experience for homes. The price to change walls should accompany an off hand agent comment. Bathrooms, and kitchens have wear and tear costs that can be determined before closing. In preparing a property for sale we refuse to hide anything. I think agents who recommend hiding defects should be liable. We’ve been asked.

    For lack of a better analogy, you can get a certified used car, but for Real Estate you get a very limited warranty, if you buy it. I think a listing saying the entire house has been gone through and repaired before being put on the market would be a selling point. There again it’s a liability issue.

    In the world of lead generation that is a very true revenue stream. My current company is http://www.seattlehousecleaning.com I also own a half a dozen domain names related to labor. http://www.seattlehousepainting.com http://www.rotwork.com and others less used.

    http://www.seattlehousecleaning.com has set up two companies that seem to do well. We get 25% of our business from the internet. The Real Estate portion is of interest to people, but in terms of generating leads it’s pretty lame.

    My thinking has been to refer agents from the labor sites.

  110. You are on a subject close to my heart. My company A Spring Cleaning has been preparing properties for sale since 1988. For about ten years I had a carpenter and painter who I kept pretty busy. As a licensed Real Estate agent it was clear there was no contest which made more money for me. Being a Real Estate sales person is hard, brutal, work of long hours constantly looking for the next client. A carpenter and painter find work by just being in a neighborhood.

    I have tried unsuccessfully to merge the labor portion with the Real Estate sales portion of my business model for the past ten years. It’s hard to make the adjustment. Three Real Estate companies have asked me to move my license over what they termed liability issues. One Broker filed a complaint against me with the NWMLS. She wanted it to be clear to any agent I might do work for that I was a licensed Real Estate agent in the State of Washington.

    Going back to the 1980s I was also a licensed Pest Inspector which is all that is required to be a Home Inspection Company in the State of Washington. That company was Aardvark Home Inspections.

    OK, so agents would, and do, refer me work and I for many years recommended agents who I trusted. There were never any kick backs. When the markets really heat up there is that pushy agent who wants a whole lot of something for nothing. Agents will tell me that they have a lot of work to keep me busy if I just do this that and the other thing at a reduced rate.

    All of that is back ground on what I would like to see from a Real Estate company.

    I would like for a Real Estate agent to know something about construction. It would be great if a Real Estate agent actually understood the court system, because I don’t think agents get sued enough any more. I have a saying:”Sue me first.” Agents should be held accountable for what they put together. Agents should know the liabilities of their actions.

    Agents should know the market place they currently represent. They should be required to perform in a diligent manner for the benefit of the client they represent. They should be able to show they have done the work to make sure the property is well priced and in a condition the buyers can handle.

    It’s nice to say people should be responsible for themselves, but the agent should also be a responsible party to a Real Estate transaction.

    Enough ranting about that.

    I do think buyers and sellers should be allowed a one stop shopping experience for homes. The price to change walls should accompany an off hand agent comment. Bathrooms, and kitchens have wear and tear costs that can be determined before closing. In preparing a property for sale we refuse to hide anything. I think agents who recommend hiding defects should be liable. We’ve been asked.

    For lack of a better analogy, you can get a certified used car, but for Real Estate you get a very limited warranty, if you buy it. I think a listing saying the entire house has been gone through and repaired before being put on the market would be a selling point. There again it’s a liability issue.

    In the world of lead generation that is a very true revenue stream. My current company is http://www.seattlehousecleaning.com I also own a half a dozen domain names related to labor. http://www.seattlehousepainting.com http://www.rotwork.com and others less used.

    http://www.seattlehousecleaning.com has set up two companies that seem to do well. We get 25% of our business from the internet. The Real Estate portion is of interest to people, but in terms of generating leads it’s pretty lame.

    My thinking has been to refer agents from the labor sites.

  111. “For lack of a better analogy, you can get a certified used car, but for Real Estate you get a very limited warranty, if you buy it.”

    David,

    I don’t know much at all about cars. I think you can only get a certified used car if you buy it from a dealer who makes the profit. The dealer has to be the seller of the car to certify it…I think. If you buy a car from a private party, can it be a “certified used car”?

  112. You missed the point.

    Buyers are buying a property for tens or hundreds of thousands of dollars.

    They should know what they are buying. An agent should have the ability to explain the property to a buyer. If the agent needs to ask they should be able to ask thier broker and the broker should know the product well enough to make educated guesses as well as a home inspecter can.

    Agents should have a working knowledge of the product, economic feasibility, and market place to adequately represent a buyer. Agents should have more knowledge as the listing agent, of the product, economic feasibility, and market place.

    If agents are unsure of the product, economics, or market place the broker must be responsible.

    When things go wrong there should be recourse to resolve disputes. As far as I know Washington is not a Buyer Beware State. I have made the point to Gary Locke and repeatedly to the Washington State Attorney General that car buyers have more rights and recourse through the Lemon Laws than home buyers have.

  113. You missed the point.

    Buyers are buying a property for tens or hundreds of thousands of dollars.

    They should know what they are buying. An agent should have the ability to explain the property to a buyer. If the agent needs to ask they should be able to ask thier broker and the broker should know the product well enough to make educated guesses as well as a home inspecter can.

    Agents should have a working knowledge of the product, economic feasibility, and market place to adequately represent a buyer. Agents should have more knowledge as the listing agent, of the product, economic feasibility, and market place.

    If agents are unsure of the product, economics, or market place the broker must be responsible.

    When things go wrong there should be recourse to resolve disputes. As far as I know Washington is not a Buyer Beware State. I have made the point to Gary Locke and repeatedly to the Washington State Attorney General that car buyers have more rights and recourse through the Lemon Laws than home buyers have.

  114. Recourse is to the seller, David. You missed the point. When you buy resale direct from the current owner, recourse is the same whether it is a car or a house. If you buy from a builder or a new car dealer…then there are lemon laws (warranties) for both. If you buy a car or a house from the guy next door, resale, same recourse…not as much.

    We are no longer “buyer beware” because there is an agent for the buyer…the agent for the seller is not the keeper of the buyer…they are the keeper of the seller. If a buyer buys direct with no agent…then it IS buyer beware. More true in most states (not ours) that impose fiduciary duties…but somewhat true nonetheless.

  115. PatentGuy says:

    I’m way late to this dialogue, but it’s good to see that Ardell can still get her commenters’ shorts all bunched up. Ardell, you ought to be writing a weekly RE news column. Would be a refreshing change from the syndicated NAR hack(s).

    We just closed on a second home on Kauai. As we had done with our primary home in California some years ago (same price range – about $2M), we did not use a buyers’ agent. In this case, the Seller’s broker took a 3.5% commission, (still a nice paycheck considering that very few houses are selling in this price range right now). She did considerably extra work on my behalf, but she was not my agent, and that was kept clear by me and her throughout the escrow. This saved more than $50K for her client (we did not kick back money to ourselves, which is silly).

    I would pay for a buyer’s agent if they cost $5K maybe $10K, but not $60K. And, if I try to pay one $5K or $10K to do some ground work for me on a $2M sale, they get preoccupied with how they are giving me such a great deal compared with a “3% commission.” So forget it. Do it myself. (I admit, I didn’t mind the extra trips to the isalnd …)

    You’ve had this same conversation in the past, and probably the above comments are of the same nature. Everyone has an opinion about realtor commissions. Every buyer is different. Not all buyers need a 3% handholder, but some do and that’s fine (it’s their money, after all). And if they think a buyers agent is free, they deserve to have one!

    Heck, for a lower priced property (under $300-400K), I would probably hire one to save time, since the cost would match the time-value.

    But, that’s me …

  116. PatentGuy says:

    I’m way late to this dialogue, but it’s good to see that Ardell can still get her commenters’ shorts all bunched up. Ardell, you ought to be writing a weekly RE news column. Would be a refreshing change from the syndicated NAR hack(s).

    We just closed on a second home on Kauai. As we had done with our primary home in California some years ago (same price range – about $2M), we did not use a buyers’ agent. In this case, the Seller’s broker took a 3.5% commission, (still a nice paycheck considering that very few houses are selling in this price range right now). She did considerably extra work on my behalf, but she was not my agent, and that was kept clear by me and her throughout the escrow. This saved more than $50K for her client (we did not kick back money to ourselves, which is silly).

    I would pay for a buyer’s agent if they cost $5K maybe $10K, but not $60K. And, if I try to pay one $5K or $10K to do some ground work for me on a $2M sale, they get preoccupied with how they are giving me such a great deal compared with a “3% commission.” So forget it. Do it myself. (I admit, I didn’t mind the extra trips to the isalnd …)

    You’ve had this same conversation in the past, and probably the above comments are of the same nature. Everyone has an opinion about realtor commissions. Every buyer is different. Not all buyers need a 3% handholder, but some do and that’s fine (it’s their money, after all). And if they think a buyers agent is free, they deserve to have one!

    Heck, for a lower priced property (under $300-400K), I would probably hire one to save time, since the cost would match the time-value.

    But, that’s me …

  117. Ardell I would leave your comment stand, but it makes no sense.

    Please, what are you trying to say?

    I’m saying an agent needs to be held accountable for a Real Estate transaction, no matter how much or little they are paid.

    We need to have recourse against an agent the same as we would have against a seller or builder.

    There again we have more protection for buying a car than we do in a Real Estate transaction, probably because of the small claims court actions involved with a car.

  118. Ardell I would leave your comment stand, but it makes no sense.

    Please, what are you trying to say?

    I’m saying an agent needs to be held accountable for a Real Estate transaction, no matter how much or little they are paid.

    We need to have recourse against an agent the same as we would have against a seller or builder.

    There again we have more protection for buying a car than we do in a Real Estate transaction, probably because of the small claims court actions involved with a car.

  119. Patent guy,

    Interesting take. From my vantage point in the business, value received and paid for service for anything is really up to the consumer. But, I can attest first hand that there is an incredible disparity of levels of service and even a far wider gap in expertise (obviously longevity in the real estate biz provides for better expertise…in theory). And that is the crux of the problem of commissions in real estate that has been debated for years on end: you pay essentially the same commission rate for sterling results and lousy outcomes. This is where the real estate brokerage companies have never made ground for as long as I can remember. They allow the same commission structure to be paid by consumers for those with years of service that provide good outcomes(or lousy) and the same for those who are newer in the business or in some cases, seasoned, but still have troubles.

    For example, (and we are not the only escrow and title firm this happens to…we all go through it) today we closed on a transaction where a listing agent very early on wanted us to drop our escrow fee on a short sale to make up the difference to help the transaction come to fruition.

    Aside from the arrogance of asking escrow to pay for a sellers financial problems, the agent asked numerous times for our expertise and advice along the way during the transaction and argued with my wife (who has closed thousands of transactions)about how to place credits on a Settlement Statement. Two months plus into the transaction and TODAY , the day of closing, we were STILL asking for a commission disbursement form from this agent’s brokerage so that I could cut their commission check this afternoon for several thousand dollars.

  120. Patent guy,

    Interesting take. From my vantage point in the business, value received and paid for service for anything is really up to the consumer. But, I can attest first hand that there is an incredible disparity of levels of service and even a far wider gap in expertise (obviously longevity in the real estate biz provides for better expertise…in theory). And that is the crux of the problem of commissions in real estate that has been debated for years on end: you pay essentially the same commission rate for sterling results and lousy outcomes. This is where the real estate brokerage companies have never made ground for as long as I can remember. They allow the same commission structure to be paid by consumers for those with years of service that provide good outcomes(or lousy) and the same for those who are newer in the business or in some cases, seasoned, but still have troubles.

    For example, (and we are not the only escrow and title firm this happens to…we all go through it) today we closed on a transaction where a listing agent very early on wanted us to drop our escrow fee on a short sale to make up the difference to help the transaction come to fruition.

    Aside from the arrogance of asking escrow to pay for a sellers financial problems, the agent asked numerous times for our expertise and advice along the way during the transaction and argued with my wife (who has closed thousands of transactions)about how to place credits on a Settlement Statement. Two months plus into the transaction and TODAY , the day of closing, we were STILL asking for a commission disbursement form from this agent’s brokerage so that I could cut their commission check this afternoon for several thousand dollars.

  121. I don’t disagree with you Patent Guy. The system and the laws are made for the lowest common denominator, and often that IS the lowest sale price. So in an area where the houses are selling for $200,000 give or take (as they were when I started in real estate) the system works just fine.

    Uproar doesn’t take place until home prices reach a certain level. Sometimes we forget that in many parts of the Country, that never happens.

  122. David,

    It sounds like you want the agent for the seller to protect the buyer. The agent for the seller protects the seller’s interest. You seem to want the listing agent to protect the buyer’s interest. Where am I losing you?

    You lose me when you talk about cars, as it is buyer beware when you buy a used car…isn’t it? When you buy a used car you can take it to a mechanic before you buy it. When you buy a used home you can hire any kind of inspectors you want before you buy it. Same difference. “As is” and you do your due diligence to determine what is right and wrong with it.

    You seem to want a used house to come with the same warranties as a new one. Used cars don’t have the same warranties as a new one.

    A buyer’s agent helps you do your due diligence, not the agent for the seller.

  123. David,

    It sounds like you want the agent for the seller to protect the buyer. The agent for the seller protects the seller’s interest. You seem to want the listing agent to protect the buyer’s interest. Where am I losing you?

    You lose me when you talk about cars, as it is buyer beware when you buy a used car…isn’t it? When you buy a used car you can take it to a mechanic before you buy it. When you buy a used home you can hire any kind of inspectors you want before you buy it. Same difference. “As is” and you do your due diligence to determine what is right and wrong with it.

    You seem to want a used house to come with the same warranties as a new one. Used cars don’t have the same warranties as a new one.

    A buyer’s agent helps you do your due diligence, not the agent for the seller.

  124. David…it’s kind of like this. Hello, are you an agent? Yes I’m AN agent but I’m not YOUR agent. You can’t expect the agent for the seller to have the best interest of the buyer in mind…that would be a conflict and breach of duty. If a buyer wants to buy without a buyer’s agent, then they can’t look at “the” agent in the room to help “them”.

    The listing agent doesn’t sell a house like a car dealer sells a car. The listing agent represents the seller, the person…not the house.

  125. Patent Guy,

    I think the subject of this post was forgotten a long time ago…I don’t even remember it. We went sideways somewhere along the line and it became “Mr. Toad’s Wild Ride” :)

    For kicks, click the link in #56. It addresses your issue, I think. I was doing two “shows” at once, plus Twitter. A fun day.

    I’m trying to figure out how to approach a septic tank problem in an escrow. Sometimes the diversion of managing a comment stream, or two, or three, helps me shake my head out.

    Staying “engaged” sharpens the tool, (if that makes any sense to you) and I have determined the best course of action and will implement it tomorrow.

    I hate septic tanks. I fell in one once with my daughter when my daughter was three (a leach field at a relative’s house in MA) Hated them ever since.

  126. Patent Guy,

    I think the subject of this post was forgotten a long time ago…I don’t even remember it. We went sideways somewhere along the line and it became “Mr. Toad’s Wild Ride” :)

    For kicks, click the link in #56. It addresses your issue, I think. I was doing two “shows” at once, plus Twitter. A fun day.

    I’m trying to figure out how to approach a septic tank problem in an escrow. Sometimes the diversion of managing a comment stream, or two, or three, helps me shake my head out.

    Staying “engaged” sharpens the tool, (if that makes any sense to you) and I have determined the best course of action and will implement it tomorrow.

    I hate septic tanks. I fell in one once with my daughter when my daughter was three (a leach field at a relative’s house in MA) Hated them ever since.

  127. PatentGuy says:

    Tim,

    Our escrow-title woman earned every penny of her relatively small (compared to the seller’s broker’s) fee. Our lender (PenFed – great rate; no costs/points; lousy customer service) made our/her life difficult wherever possible. But, it worked out in the end. My sister-in-law works escrows in the infamous Inland Empire (Riverside Co.) California, and virtually all of her escrows for the past year or two have been shorties and foreclosures; all at discounted rates. She’s not a happy camper. Something about losing money on every transaction and making it up in volume.

    And, yes, RE brokers are loath to compete on price, and threaten/coerce their customers with the business about how “buyers agents will boycott/poison/ignore your listing if you don’t pay them 3%, no matter how out-of-line the amount.” And, yes, an excellent agent (let’s call her “Ardell”) is worth a big multiplier over a bad one (fill in your own name), as with any service (doctors, lawyers, accountants, etc). I’ve been a partner at a couple of large “prestigious” (pretentious?) lawfirms, and they charge the same way-high rates for excellence as they do for jokers that can’t string two farts together to make a smell.

    But, it is not worth $60K to me for even an Ardell-quality agent. Ardell has it right. Once housing prices shot up, the fixed commission percentage becomes an issue.

    Ardell, please do keep your tool engaged (um … I think I know what you mean – I still remember your “double-ender” reference). But, it’s already plenty sharp.

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