Tag Archives: NAR

Here’s a question only the Governor can answer

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[photopress:gregoirepicture2.jpg,thumb,alignright] Why does the law say “a licensee who works with a BUYER represents that BUYER unless…”

Aren’t SELLER constituents deemed worthy of “equal protections under the law”? Why doesn’t the law say “consumer” generically, so that unrepresented sellers have the same protections, and not just a consumer when a BUYER? Why doesn’t it cover a little old lady owner when a licensee knocks on the door trying to buy the place, for less than fair market value? Why isn’t she represented at first contact?

Here’s a little FSBO trivia. Did you know that agents who bring For Sale By Owners a contract on an mls form, when representing a buyer, are breaching mls rules? Did you know that there is no place in that contract for an agent NOT to represent a seller in some capacity? Only two options: Agent represents the seller or agent represents both the buyer and the seller (dual agent). There is NO place in the contract for the seller to be NOT reperesented as in No For Sale By Owners allowed. A completely different contract must be drafted by an attorney if an agent wants to write an offer on a For Sale By Owner.

Lots of things need to be changed that are leftover loose ends from the days when every agent represented sellers. I’m hoping all of these new business models are going to force all of the trains that are off the track to finally get so derailed that someone has to fix them. Train 1. State Laws of Agency Train 2. MLS Rules Train 3. NAR and Code of Ethics They all need to fit tomorrow’s reality for the new business models to function properly. Tomorrow’s reality is happening as we speak, as these new business models come up and as For Sale By Owner companies spring up. Someone needs to “get on the stick” pretty fast to catch up, because “the times they are achangin'”.

The Law of Real Estate Agency needs to clearly define all of these new business models, so that the consumers, including the For Sale By Owners, are aware of when they are NOT represented, and when they are being offered “limited reperesentation” and what that means to them. That is part of the DOJ “stuff”, at least with regard to Exclusive Buyer Agency. Hopefully with regard to For Sale By Owner companies as well, though I haven’t read anything yet to suggest that is the case.

Where’s that “Food for Fodder” tag? Lots to chew on today.

Future of the Real Estate Industry?

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Hint: It is being discussed and decided this week, but not in San Francisco.

John Cook picks up this quote from Glenn Kelman of Redfin on what he will testify about when placed in front of U.S. House of Representatives’ Subcommittee on Housing and Community Opportunity:

“I am going to say how much friction there is in the business,” said Kelman, adding that as one of the first online brokers Redfin has been “kicked and spat on” by the Multiple Listing Services in California and Washington.

Ouch! I’m sure that once he testifies, relationships with the local MLS organizations will quickly be healed. 🙂

If this topic interests you, then definitely check out John’s column because he provides some great links.

Wrong Godfather

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[photopress:Godfather.jpg,thumb,alignright]Sellsius has the right point, but the wrong Godfather.

The Godfather of the people outside of “The Family” is the local State Real Estate Commission, appointed in most cases by the Governor of each state, and the protections for the people are in the licensing laws of each state.

The Godfather of the Realtors, the people inside “The Family”, is NAR and WAR and SKCAR and their counterparts around the country.

So in Mafiaoso-speak, Marlon Brando (in the Sellsius article) is the head of “the bosses” and Al Pacino is the Godfather of “the neighborhood”. (To be really accurate, I’d have to switch over to Sopranos…so I took a little license there, for the benefit of the non-purists, on the analogy.)

Point being, DOJ against NAR may help the Banks, more than the people, and local Departments of Licensing, and Real Estate Commissions, etc…make changes to affect the public at large. There are ripples to each that affect both…

but don’t go to the wrong Godfather on the day of his daughter’s wedding, or you may get the wrong wish granted, or no wish granted at all! For those not tuned in to “mafioso-speak”, it’s called “Barking up the Wrong Tree” 🙂

You Have to Wonder….

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And some ask why the government is so fixated on organized real estate. It is because of this mindset and the audacity to shout it out to the world…

I tactfully tell my sellers if I reduce my commission to 4 percent or 5 percent, the buyer’s agents will show my listings last only after showing the full-commission listings. Whether it’s ethical or not, that’s what happens.

Full article on Inman (subscription required after a day)

-Russ

“Disguised” FSBO Market Share

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Some big news happened last week in Texas which I discuss on my blog [link removed]. In a nutshell, the FTC obtained a Consent Order from the Austin Board of Realtors to eliminate a rule that treated Exclusive Agency Listings different from Exclusive Right to Sell Listings, at least with respect to the publishing of those listings on public web sites. Rules like these have been adopted to deal with flat fee listing brokers who did nothing more than insert the listing into the MLS database. In other words, these are “disguised” FSBOs where the owner has agreed to pay some selling office commission but usually receives little or no additional help from the listing broker.

In its investigation, the FTC found that, prior to the adoption of the rule, 18% of the listings in the Austin MLS were Exclusive Agency Listings. Once the rule was adopted, the number of Exclusive Agency Listings dropped to 2.5% of the total.

I have always heard that the FSBO rate was somewhere around 10-15% nationally. Since the 18% figure does not include what I might call “pure” FSBOs where the seller basically hammers up a sign and calls it good, the actual FSBO rate in Austin (before the rule adoption) was probably greater than 20%. Is this surprising? Do you think it reflects historical numbers or is some kind of trend? Any thoughts on where the 15.5% went after the rule was adopted?

Day Two – Realtor Mid-Year

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Yes, I am tardy with my report for Day 2. There was not much going on from an interesting meeting standpoint so I visited the tradeshow floor. For anyone that has not been to a Realtor tradeshow, it is certainly an experience. Flashing buttons, contests, people throwing free things at you. Having been to many of these, it always amazes me the types of companies that have booths. For example, there were several jewelry and makeup booths. While I am not a woman, it seems odd that they would come to a real estate tradeshow. It would be like having Titleist as a vendor. Lots of real estate guys like to play golf but they don’t really fit at a Realtor tradeshow. Then again, I am pretty dense about this stuff and they seemed to have a bunch of women buying stuff so I guess they are the smart ones.

I visited a bunch of booths but a couple stood out for different reasons:

Realtor.com – They intro’d a Zillow/HouseValues-like feature on their home page called “What’s Your Home Worth.” It is a lead generation system for agents that provides basic home value data and then let’s the consumer elect to get more refined info if they want from a “featured” agent. Agents can buy territories and they apparently will rotate as consumers access the feature. Once a consumer asks for more info, the “featured” agent will get an email and that consumer will see the particular “featured” agent for a period of time each time they return. With the large amount of traffic that R.com gets, it will be interesting to see how well the lead gen system works. I tried my zip code and there was already an agent signed up! I think this will be a winner for R.com and the agents that jump on it but I also think that agents will squak when their choice area is sold out.

HomePoint – This is a Trulia-like company (although the get data via the MLS directly) that is trying to become a portal of sorts. Agents sign up for territories and get “featured” when a consumer clicks on a listing. Again, this is a lead-gen system for agents that even extends to listing agents and FSBOs. The thing that I did not get was how they were going to generate traffic. No eyeballs, no leads.

More later….

Russ

Day One – Realtor Mid-Year

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I just attended my first meeting at the NAR Mid-Year. It was the MLS Association Executives Committee Meeting. There were three presenters to the group and I will provide some highlights of their presentations.

Laurie Janik, NAR General Counsel

Laurie indicated that claims against MLS under the NAR EO Insurance Policy have for the first time surpassed the number of general association claims. Out of 32 claims made this year, 18 involve MLS issues. Of the 18, 8 involve the FTC, 7 the DOJ and one involves a state attorney general. Most of the claims revolve around whether an MLS can exclude Exclusive Agency listings from data feeds to third party websites (e.g. Realtor.com). Since Exclusive Agency listing allow the seller to sell the house themselves, MLSs argue that allowing these listings to be displayed on the Internet basically enables the seller to have free advertising to attract a buyer without paying the listing side of the commission.

Laurie also discussed the DOJ lawsuit. NAR filed a motion to dismiss which raised three arguments:

First, that the DOJ is seeking injunctive relief for the VOW policy that has been rescinded and never implemented and as a result, there is no relief that can be granted under this claim.

Second, that the VOW Opt Out provision is neutral on its face, there is a presumption of cooperation and that decisions to Opt-Out are based on independent action of each broker.

Third, that the DOJ’s claim against the current Internet Listings Display Policy does not allege any anti-competitive effect.

Laurie cautioned that Motions to Dismiss are rarely granted in the 7th Circuit (where the suit is pending). She also said that 14 MLSs have been involved in DOJ subpoenas and that the NAR insurance coverage for this claim is gone so the MLSs that are involved are now spending their own money to respond to the subpoenas.

Lastly, she indicated that there was a productive settlement conference. She believes a key issue in the case will revolve around the MLS definition of “Participant

Russ on Listing Copyrights

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RCG contributors have been all over Inman News lately…

Today Russ is giving his opinion on two papers recently released by MRIS (Washington DC MLS) that have to do with the copyrights that agents have on listings.

The general thrust of the reports are that real estate agents should assert the copyright on their listings:

“Our intention with this discussion paper is to remind those that can lawfully assert copyright rights that they have legitimate recourse at their disposal if they feel their rights are violated,” the paper states.

Issues related to the copyright, control and ownership of property listings information have been debated for many years within the real estate industry, and there has been an increasing focus on these issues, the paper states, that has created “robust” and “at times contentious” discussions about the present state of the business and the future of the industry. Among new entrants to the industry are “alternative business models that propose to dramatically change the real estate industry,” as well as “new offerings from existing industry participants that may also impact the way the industry thinks about — and practices — real estate,” according to the paper.

Russ is not convinced that agents have all the rights that the paper asserts:

(Russ) said he “completely” disagrees with the perspective in the report that the listing price of a property is copyrightable, for example. “It’s the seller who typically comes up with (the listing price) and not the agent,” he said. “If it was copyrightable it would be copyrightable to the seller. In my opinion the argument does not have legal authority to back it. If challenged in court I believe that the court would find the listing price is a fact as opposed to a protectable element.” The listing price, as far as consumers are concerned, is definitely a very important aspect of property listings information, he said.

This is an interesting argument and at the root of the DOJ case against NAR that is currently working itself through the legal system.