MAJOR win for the Online Real Estate Industry

NEW -> Contingent Buyer Assistance Program
J

Joseph Morin_IHB

New member
Today a decision was made in the antitrust case between the National Association of Realtors and the Department of Justice. Online realtors (such as Redfin) will now have access to MLS data that the NAR was trying to restrict. This is a major win because this gives more access and credibility to online services and more power and knowledge to the consumer. I've been waiting for this shoe to drop. I can't believe how archaic the NAR has been and slow to adopt new media standards such as wiki style editing, user generated feedback (which is still prohibited according to the terms of the settlement) and access to online databases.



Go Redfin!



<a href="http://www.techcrunch.com/2008/05/27/online-realtors-win-rights-to-housing-database/">http://www.techcrunch.com/2008/05/27/online-realtors-win-rights-to-housing-database/</a>
 
I have to side with the NAR on this one. The MLS is a private publication or publications. If realtors choose not to share their proprietary information, it is theft for the government or anyone else to confiscate that information.
 
I have to side with realtors here. I've never had a bad one (call it blind luck or natural ability to pick professional service) and I don't think the internet can match them for service.



I know there's some real horror stories out there but I can't tell one. I won't use the internet for this sort of transaction.
 
You can look at a house in MLS or Redfin all you want. But please don't tell me you will purchase one without seeing it and the neighborhood that it's in.



This reminds me of the proliferation of tax softwares to the average consumers. Are most able to do their own taxes? This is not to imply that most consumers aren't bright. But rather, most do not have the time or interest in crunching numbers. Why waste a weekend on doing your own returns when a professional can do it in 20 minutes?
 
[quote author="awgee" date=1211973653]I have to side with the NAR on this one. The MLS is a private publication or publications. If realtors choose not to share their proprietary information, it is theft for the government or anyone else to confiscate that information.</blockquote>
And yet, is it not discriminatory for the NAR to refuse to sell this publication to a brokerage just because it offers lowers commissions or operates with a different business model?
 
The point is that a "virtual" brokerage should have the same rights as an in-person broker. It's easier to avoid the lies (small or otherwise) when the info is online.



BUT, with that said, I would NEVER buy a house or even sell one with a virtual broker. I want flesh.
 
[quote author="Irvine Allergy Dr" date=1212023764][quote author="awgee" date=1211973653]I have to side with the NAR on this one. The MLS is a private publication or publications. If realtors choose not to share their proprietary information, it is theft for the government or anyone else to confiscate that information.</blockquote>
And yet, is it not discriminatory for the NAR to refuse to sell this publication to a brokerage just because it offers lowers commissions or operates with a different business model?</blockquote>


Why can not the NAR sell to whomever they wish or not sell to whomever they do not wish? When did private property rights become social property rights? It is the realtor's property. Can you not sell your medical services to whomever you wish? Should you be forced to provide non-emergency medical service if you think it is bad for your business? Is there not an ammendment to the Constitution outlawing slavery? Of course the NAR discriminates. Discrimination is a vital factor in business. If someone comes to purchase my home, I will disciminate between those whom I think are qualified buyers and those I feel are not qualified. People use the word discrimation as a knee jerk response. Anytime they don't like something, they yell <strong>"Discrimination"</strong>, as if that is a bad thing. Maybe the government should decide that doctors have to provide treatment for everybody, no matter if they can pay or not.
 
I don't think it has anything to do with discrimination, but I do think it is a questionable practice (surprised?) to limit that info release.



The issue that I see is about <strong>who is best served by the limited disbursement of info</strong>. The sellers? No. The buyers? No. I would argue that it is in the best interests of the client to <strong>maximize </strong>the number of people the sale is advertised to, not to put a cap on it. If I was selling my house, I would want every possible buyer to know what is available for sale, and that requires vast dissemination of that info. And if I was buying, I'd want to know of every home available, not just the ones that have an address listed, or just the ones that offer a big fee to the buyer's agent.



Being good at getting the info out is, in fact, a critical part of what makes great brokers... that ability to get the data out and get other people working to bring in a ready, willing, and able buyer and seller together instead of just working by themselves.



I'm not saying that there shouldn't be a fair price that should be paid for participation. I just don't think that an outright denial is the way to go.



P.S. I really, really, really want to see a "Sneezy" the Dwarf avatar for you soon, IAD! :coolsmile:
 
[quote author="awgee" date=1212032607]



Why can not the NAR sell to whomever they wish or not sell to whomever they do not wish? When did private property rights become social property rights? </blockquote>




well, the supremes decided this a few years ago, when they decided that it was illegal for a manufacturer (think Coach bags, though i' ve forgotten who exactly) to refuse to sell to discount retailers. The manufacturer argued that they would only sell to retailers who maintained the MSRP, because they needed to be 'full service retailers' to properly market their product.



The supremes decided that it was restraint of trade.
 
I think that it is great that MLS is being opened up...the old system was too reminescent of a monopoly...and I think that this will force greater competition which will benefit the end consumer... instead of some real estate person telling me that they are entitled to 6% of my million dollar sale. I'm sorry, but that is BS. I'd love it if real estate agents started an hourly billing, instead of a 6% contingency. I'd pay $100/hour for a good realtor... and lets see, 100/hr vs 60K on a percentage basis... that'd be almost 600 hours between the buying and selling agents? Sorry, they don't work those kinds of hours on an individual sale.
 
At present you can negotiate any form or amount of payment that you and a real estate agent agree on. The NAR can not force anybody to charge or pay 6%.
 
Absolutely you can (and should) negotiate, but you have to acknowledge that most real estate people start at 6% as a standard rate (3% each side) and that this blog has discussed (many times?) the ethical aspects of buyer agents that may focus on "full commission" properties at the expense of "discounted commission" properties. I ran into this when I sold my condo earlier this year. I negotiated a 5% total commission (which was far more than the parties were worth IMO). I found most agents scoffed at anything less... and it is that "sense of entitlement" that so makes me dislike the real estate industry... and makes me like cases like the one that benefited redfin. If I had found someone that would work for me at $100/hr... maybe even $150/hr, I'd have taken that in a heart beat.
 
So lets say a RE agent makes 3%. Does he really get to keep that total 3% commission? It's divided with his broker, correct? So then the agent is making less than 3%. You say that's still alot of money? Assuming, after splitting with his broker. He's left with 10k. But then half of that is taxed. So now he's left with 6k maybe even less. Still alot of money? How about the agent won't close another deal in 3 months even longer. For those who seriously think this is easy money. Why not give it a try.



And no, I am not Irvinerealtor. :-)
 
I think it's great ! Like IR2 said, If I was a seller I would want every possible angle working for me to get my listing seen ! This will help the consumer. I agree that it felt as if the MLS was a monopoly.



Hopefully this will have an impact on the IMO ridiculous 6% standard on listings....AND on realtors balking at/not showing the "only 2 1/2%" commission properties.
 
A couple of thoughts.



1) It was settlement so I am assuming that NAR is going to get some $$$ out of this. Maybe Redfin would have to pay more since it does not actively provide listing to the service.



2) The Justice Department's issue is not directly focused on sites like Redfin. I think the 60 minutes piece a few months back talks about how the NAR refuses to allow access to MLS for flesh and blood agents who charges less than 6 percent. I think one of the issues is that the NAR does not make 6 percent a "rule" but a suggestion. Thus, to restrict access to MLS based on a suggestion is a little problematic.



3) The Justice Department's other focus is to prevent antitrust. .. Yes the MLS is collected by the NAR but it is basically the only one out there. Since NAR is the only kid on the block with a ball, the Justice Dept. is making it share with the others. Not exactly lassiez-faire but I sure no one wants the oil companies to get together and jack up the prices even more.
 
I don't know how much time Realtors spend with prospective buyers, but I'd imagine it would be beneficial to both the buyer's agent and the prospective buyers to search and narrow down the properties that most interest them.



I sure hate paying 6% but when it's split 4 way buyer & seller agent and brokers even with 60K in commissions, each party is probably seeing less than 10K each. Aren't most realtors on 1099s and not W2 employees w/ base salaries or have things changed?
 
OK, lets throw the question back, just for the moment conceding that the two real estate salespeople earn their 1.5% each.



What to their "employers", the brokers, do to earn their 3%?
 
I never said that the broker (license) cut of the agents commission was fair - but it seems like it has to do with the fact that the agent hasn't endeavored to get the license? Someone help me out on this - can you both be a broker and an agent? Isn't this really a matter agents needing to seek a more profitable business model?



Really however, as an end comsumer - I don't care how many middlemen are involved... I pay, and they get paid. Their gain is my loss. Just because it is an irrational scheme, doesn't mean that I should accept it, agree with it, etc. And as an attorney, I found myself correcting documents all along the process... which made the fees even more difficult to accept.



I'll give you an example of some fees that I paid when I sold my condo: $250 for paper-work??? $129 for some sort of risk management fee for the benefit of the broker/agent??? I was really outraged at these fees. Isn't there ever a cost of doing the business that you don't pass along to the consumer?
 
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