Slashdot Mirror
Internet-Based Realtors Win Monster Settlement
coondoggie writes "Until today, most Internet-based real-estate brokers were considered second-class citizens, and their clients were left in the cold. But perhaps that will change with today's news that the Department of Justice has reached a proposed settlement with the National Association of Realtors that requires NAR to let Internet-based residential real estate brokers compete with traditional brokers. NAR has agreed to be bound by a 10-year settlement, under whose terms NAR will repeal its anticompetitive policies and require affiliated multiple listing services to repeal their rules that were based on these policies." Here's the whole settlement document on the DoJ's site.
Now where is the nerd-bit to this article? Apart from the fact that there's the word 'internet-based' in the summary. I mean, not everything on the internet is nerd.
Do it yourself, because no one else will do it yourself. [beta blockade 10-17 Feb]
Protectionist policies usually only protect a handful of businesses. In the case of the Real Estate industry, a high cost to entry bars a lot of business from entering into the market without going into co-hoots with the "big brand" businesses. What this does is allow independent realtors to compete with the big boys, which will in essence force the big boys to be more competitive.
The internet helps small businesses expand as fast as they can handle, and forces big business to stay competitive or lose business. This is really good for everyone. Not a perfect solution, but a good start. Now, if this would only happen for all industries...
20th century Marxism is not progress...
I'm glad to see anti-competative practice and brokers in the same sentence. I don't know if internet brokers are going to have any positive effect on the rental market in major cities though. Right now the only realistic way to get a new apartment in NYC is to pay a fee equivalent to 15% of the annual rent to a broker for the privilege of renting from the landlord who has given them the exclusive right to make the public aware of the apartment's availability. So that's easily $3600, just to be allowed to deal with the apartment management company. I once paid a broker's fee to someone who had an exclusive on all the apartments owned by the broker who shared an office with her. I was in the same room with the landlord, but I couldn't rent from him without paying her first. i would love to use capitalism properly and not give my money to brokers, but they control far to high a percentage of the real estate for that to be a viable option.
We are all just people.
I thought it was for monster.com. Maybe change title to "Internet-Based Realtors Win A Monster Settlement" . . . ?
That's exactly what they're doing. You can almost hear the "(tm)" trademark and the ALL-CAPSness in the word "REALTOR". That's because it is a trademark, and it's NAR's trademark. The generic term is "real estate broker".
Similar cases of trademark dilution have taken place in the past -- do you use a Xerox(tm) or a photocopier? Kleenex(tm) or facial tissue? Likewise, are you doing business with a REALTOR(tm) or just some random real estate broker?
All of which is, as you've surmised, bullshit. Much like used car salesmen, real estate brokers are basically weasels. Because houses aren't identical, they can't be bought and sold like stocks, bonds, or even consumer electronics, so buying a house is more like buying a used car; people have to interact, in meatspace, if for no other reason than to inspect the property, and that invites a whole food chain of people whose only interest in the process is in getting a cut of your transaction.
And as the president of the National Association of Weasels, we'd like to make sure that you do business with one of our WEASELS(tm). Only WEASELS(tm) are members of the National Association of Weasels. Would you risk your family's financial future with mere polecats, skunks, or other poor imitation? Demand professionalism! Settle for nothing less than genuine WEASEL(tm)!
The trademark has worked well for NAW^HR, but this court case is the thin edge of a very big wedge. NAW's de facto monopoly over the WLS data broken, there'll no longer be any advantage to being a Genuine Weasel. Any old weasel can work within the same set of databases, which means that NAW will be denied the fat fees that only WEASELS pay...
Ya, I am a Realtor, if you have a question about homes ask me, my advice is always free.
What exactly do realtors do? Why would I want to use a realtor to sell a home rather than listing the home myself, and what is the benefit of using a realtor to find a home rather than just looking through the listings myself?
I'm not actually planning on buying a home any time soon, but I'd like to know. Usually I prefer researching major purchasing decisions myself, rather than trusting a salesperson.
Why, exactly, is that ridiculous? You can't call yourself a CCIE unless you actually are (well, you could, but you'd be open to getting sued by Cisco and by your clients as well), you can't call yourself and MCSE unless you actually are (well, you could, but you'd be open to getting sued by Microsoft and by your clients as well), you can't call yourself a Sun Certified Solaris admin unless you actually are (well, you could, but you get the idea...).
And you can't call yourself a Realtor unless you actually are, either. There is a difference between a Realtor and someone just licensed to practice real estate.
And of course, if other copier companies put "Xerox" on their copiers, they'd get sued, too. The fact that a brand has become so successful that
many people informally but incorrectly use it to refer to anything in that generic class doesn't mean anything in that generic class should be allowed to call *itself* by that trademark.
I don't think "rock-bottom" means what you think it means.
Realtors either should be liable for doing a lot more, or they need to be paid a lot less.
As a realtor, I won't try to convince you that your experiences are rare. They aren't. I think saying that the entire industry is scum is a bit of an overstatement. It tends to cater to people who don't want a boss and want to get rich quick. That is true. It think a lot of these dynamics you mention will only be addressed effectively by actual changes in the market by innovative actors. A good example is redfin (I think that is the name). They offer limited services but kick a large portion of the buyer-side commission (which is paid by the seller) back to the buyer. They don't drive around with buyers but they give them full online MLS access (which is common in CA) and give them comps so buyers have an idea of what an appropriate offer is. Even the most bitchy, clickish agents can't stand against a moving market. Just a thought --resident scumbag
So you're saying that one agent's self-interest is to push the asking price as low as possible, and the other's self-interest is to push the offered price as high as possible. That sounds like conflicting interests requiring negotiation that will wind up with a price in the middle that everyone accepts, which is exactly what you want.
That's not at all what he way saying... He was saying that they will both be looking to sell as quickly as possible and have no interest in getting the best deal for their clients. He used the price to show why..
Never underestimate the bandwidth of a 747 filled with CD-ROMs.
This is a very simplistic view of what the Realtor provides to the transaction, market comparisons that no automate system can match, advise about home inspections, mortgage advice, other local issues such as oil leases etc. that the average buyer an a zillow (or whatever site) search will not provide.. You also are not taking into account the 3% commission the agent would receive is split between the brokerage and the agent also.
The fun thing is the DOJ suit was based on a NAR policy that never actually went into effect..
P.S. I am not a Realtor however I do work in the Real Estate industry.. The DOJ is missing the entire problem with the industry in there suit unfortunately, which is lack of data standards that make it impossible to use data from multiple sources in custom applications without doing expensive and often prohibited modifications and cleanup.
Internet + sleazeballs. What could possibly go right?
No sig today...
This is a very simplistic view of what the Realtor provides to the transaction, market comparisons that no automate system can match, advise about home inspections, mortgage advice, other local issues such as oil leases etc. that the average buyer an a zillow (or whatever site) search will not provide.
Yeah, because there's no such thing as the internet. Wouldn't it be great if everyone had a tool for looking up information and sharing experiences related to this kind of thing?
You also are not taking into account the 3% commission the agent would receive is split between the brokerage and the agent also.
Cry me a fucking river. Someone gets a piece of the HUGE PIE that the real estate agent got for doing a search in the national database. It probably takes 10 hours of honest hard work to sell a house on the part of the realtor. 3% of $250,000 is $7500. $7500/10 = $750/hr. $750/hr is $assload. I'm crying if they have to split their pay with someone else.
The DOJ is missing the entire problem with the industry in there suit unfortunately, which is lack of data standards that make it impossible to use data from multiple sources in custom applications without doing expensive and often prohibited modifications and cleanup.
Bullshit. There is only one database that matters. The problem went like this:
Online Realtors: "We'd like to have MRIS database logins."
NRA: "No." (launches nationwide television ad campaign about how "only a member of the National Association of Realtors can help you").
It's bullshit. I used to have a login to MRIS, and during the boom, I supported umpteen dumbass realtors who all had logins, doing their computer work. With MRIS, there's no work involved. A 5 minute query and you print out everything in the price range / area, show it to the customer, and they point with their chubby finger to the one they want.
And I still hear realtors crying about how down on their luck they are. One guy, no kidding, had to sell his CANARY YELLOW HUMMER H2 because the market is taking a dip. Waaaa, some of us are having trouble buying groceries, and YOU CREATED THIS BULLSHIT ECONOMIC CRISIS.
I'm glad their monopoly got broken up. Having a national country-club of realtors is like taking a random sample of people in the 2nd standard deviation below normal intelligence, and handing them assloads of money and enough influence to adjust international economic policy. Fuck realtors. I have never, not once in my life, met a realtor that I thought wasn't 1.) of below average intelligence, and 2.) a complete sheister, who would screw over anyone and everyone if it made them a profit. Fuck the lot of them.
~X
sig?
People are usually cheap SOBs looking for the lowest price on food, clothes, toys, computers, cars, etc., yet they all of a sudden got Truly Stupid paying huge prices for homes. Why???
1) Houses were seen as a lifetime investment that would not depreciate.
2) Home ownership in the US is highly subsidized by the Federal Government through the mortgage interest and property tax deductions.
3) A lot of shady operators took advantage of poorer and less well-informed people by writing them mortgages with ridiculous terms (like a late payment increases your interest rate to double digits), waiting for the borrowers to run afoul of those terms, then foreclosing on a house the family had owned for years. It's called "predatory lending" for a reason.
There's been lots of corruption in the "secondary" and "subprime" lending sectors, too. Borrowers were encouraged to hedge, and sometimes lie, about their qualifications because the lenders felt no risk. Lenders found they could sell almost any mortgage into the securities markets where the liabilities were sliced and diced into pieces and repackaged as equity holdings. The Federal Reserve Board also helped fuel the housing bubble by holding down key interest rates and failing to perform any real oversight of its member institutions' lending practices. Many, many people, including many supposedly well-informed financial types, simply believed real estate would continue to rise in value over the years ahead.
Whenever large numbers of people become convinced that the price of a particular item, be it tulip bulbs or homes, can never fall, you have the potential for a pricing "bubble." In this particular instance, public policies and private greed together created the over-valuation of residential property that occurred over the past decade.