Tags - Genius Realty, Idaho Association of Realtors, John Eaton
The Idaho House Business Committee on Monday voted to recommend passage of a bill that would require real estate firms to present offers and counteroffers to their clients. The bill is designed to curb the practice by some companies of posting homes on the Multiple Listing Service while allowing clients to represent themselves throughout the remainder of the real estate transaction.
John Eaton, government affairs director of the Idaho Association of Realtors, said that causes problems when a home buyer approaches a seller with an offer and the seller replies, “Well now what do I do? Is this a good offer?”
“Our agents report this is happening frequently,” he said. It puts buyers’ agents in a sticky situation because they are required to get the best deal for their client, but they have ethical duties to be honest with the buyer, he said. And it doesn’t give consumers the protection the Legislature had in mind when they required separate agents for buyers and sellers, he said.
Owners of one firm using the business model being discussed, fizbomap.com, a division of Genius Realty, are concerned that the bill could affect businesses like theirs and limit customer choice.
“We see this as a built-in path to job security through statu(t)es,” the company wrote in its blog (http://fizbomap.com/blog/). “The focus should be on consumers that are choosing to selling their own home, but don’t want to pay for 100% of the old school Realtor package. Why should it be forced on them?”
7 Comments
Real estate "brokerage" is one of the most friction-laden processes in the business world today. You & I can go buy a Benz or such, qualify & finance it, get a host of options, and drive it away within 1-2 days or at the minimum a week. And it can easily run 6 figures, and you can be sure the salesperson, who works for a dealer with a real inventory risk (unlike realtors), isn't making no 5-6-7-8% on the gross.
The FTC right now is suing either the major MLS systems or the NAR (?) over their continued monopolization and restrain of essentially information. There's a number of e-based realty firms like Zip Realty & others that have a business model where they won't even open a franchise in an area where their attendant subs (mortgage insurance, home inspect, title insur, etc) aren't e-based as well. The NAR went ballistic when Zillow.com started revealing more accurate pricing data...and that's just the start.
The upshot of all this: soon enough realtors are going to have to get a haircut and get a real job, this market is losing its 'friction' by the hour, and becoming rational & quick in its execution between buyer and seller. There goes your spread, boys & girls.
Comment By Bill Sellers Idaho Falls Monday, February 19, 2007 @ 6:22 PM
It appears John Eaton with IAR believes problems are caused when buyers approach sellers with offers. How could this be? Where is the proof? Does John mean to suggest that sellers are unable to sell their own homes without the aid of Realtors? That’s crazy.
What about selling your own car? Maybe car dealerships should be required to be in the middle of those transactions also. Do I need help picking out furniture too?
As for the risk that buyers agents find themselves in and their ethics owed to consumers, the statues clearly points out what is required. How does the requirement of agent honesty get in the way of sellers representing themselves? Is this to suggest that agents feel compelled to lie to the seller about market conditions or about the buyer’s ability to close the deal? What's there to lie about? Would the agent be less likely to lie if they are serving buyer and seller as a “DUAL AGENT’? How does this give protection?
Reading further, what’s the bit about the legislature requiring separate agents for buyers and sellers…? Here’s a massive jump into the future for ya. The legislature doesn’t require agents to be involved real estate transactions. The fact is the statue allows brokers to represent both the buyer and the seller in the same transaction. DUAL AGENCY. Which I might add is illegal for Lawyers to do.
Does John Easton suggest that dual agency is an issue? Is dual agency not in the best interest of both buyer and seller? Trust me, there is a dilemma for brokers when they “attempt” to get the best deal for each client. Check with the Idaho Real Estate Commission on this one and see who’s making the legitimate complaints. I’ll bet the house its’ consumers who are the ones complaining.
Comment By Wiebe Tuesday, February 20, 2007 @ 11:07 AM
Real estate agents aren't necessary....in fact for most of the 20th century there was no such thing as a realtor.
IF you have an offer and you don't know what to do with it, the best route is to hire a real estate lawyer. Not only do they have knowledge of real estate and transactional law superior to that of a real estate agent, but a good real estate lawyer will actually read and understood the offer, and they won't charge a %, and they aren't motivated to rush you to accept and close just so they get their commission.
IAR's insistence that they are motivated to protect either (1) the uninformed seller or (2) the ethically bound Buyer's agent is laughable. The IAR doesn't really think that passage of this legislation will protect sellers who don't know what their property is really worth. The proposed legislation is a thinly veiled act to protect IAR's quickly loosening grip on the real estate transaction market.
Finally here's a question open to any real estate agent: if the services you provide really add value to the transaction, then why are you afraid of opening up free access to information about properties and the ability of us dullards out here to list and sell our own properties?
Zillow is coming, and it's just the beginning. Realtors it's up to you to come up come up with new ways to add value, because "owner of all the information" isn't going to cut it for long.
Comment By Darrel Richards Tuesday, February 20, 2007 @ 1:01 PM
Darrel,
Lawyers inside a RE transaction? Oh God, no more of them...one has to use 'em back East...more friction as they put their pinkies in the deal flow stream.
Optimally, we will be heading into an e-based records system that starts at the court house and reveals all titles, clouds, encumbrances, you name it on properties...it's all information anyway.
As this seamless digital version takes hold, the buy-sell spread will diminish to zero...normal consumer based real estate will become what it is anyway--just another large scale consumer durable.
On an e-based cashless economy, check out this week's Economist from the UK. On migration to it in real estate, check out the continuing RE bubble that's imploding by the day. Of course, our knowledgeable Idaho political wingnut will tell you this is a sign of end times and coming of the Anti-Christ.
Oops, gotta go...laser appointment to have these numbers taken off my forehead.
Comment By Bill Sellers Tuesday, February 20, 2007 @ 4:29 PM
Even without e-based records, Title companies can already do everything that you mention (titles, clouds, etc. etc) and in nearly all residential cases there's nothing that would require a real estate attorney--or a realtor.
Think I'm wrong? I recall the last time I went to a real estate closing, the Realtor was about as useful as the aquarium at the title company. The title company's closing agent did everything and the realtor tried to look knowledgable/interested in what was going on.
My point is that in the rare cases where there is a problem that the unquestionably better, more knowledgeable, less likely to screw you by double-ending the deal, and less expensive source of advice is a real estate attorney....and GOOD lawyers know how to help deals happen rather than interfere with their pinkies (or whatever).
Get ready for realtors to start "educating" the public on how "scary" life would be without them... That's how you extend the life of an obsolete profession.
Comment By Darrel Richards Wednesday, February 21, 2007 @ 4:54 PM
Why do home owners need to pay a real estate agent to use the MLS system if they are excellent home marketers anyway? I’m sure that their management team doesn’t mind them checking their personal email 10 times a day to see if they have any new emails from ‘tire kicking’ buyers. Taking call after call from buyers, financially qualified or not, to describe their beloved home only to sacrifice the invaluable lunch meetings for months until your property sells and then to run home for lunch, if you’re lucky enough to live close enough, to let in prospective buyers. Phew! There are other web base sites where you can sell your property; Craigslist.com, Zillow.com, etc. I personally appreciate the Comparative Market Analysis I get on my home from Zillow.com; out of date information doesn’t make such a favorable profit even taking the real estate agent out of the equation.
It’s easy for a professional who teaches/assist people in marketing their own business that to say that another sales person is “going to have to get a haircut and get a real job’. Sales isn’t for everyone.
By the way, in general, a home is the biggest asset one person will own. Personally, my vehicle or furniture are far from being assets. Compare apples to apples, please!
Comment By tf Wednesday, February 21, 2007 @ 7:32 PM
Isn't this same problem present when a buyer's agent represents a buyer on a sale from a true FSBO? Why not ban that?
Comment By FSBO Friday, February 23, 2007 @ 11:44 AM
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