Realtors want state to define scope of services

The House Business Committee has passed an Idaho Association of Realtors bill to make sure real estate firms present and explain offers to their clients. If it ultimately becomes law, the bill would block home owners who want to pay a real estate agent only to list a home in the Multiple Listing Service, with no other services required.

The bill takes aim at real estate firms creating MLS listings for clients who go on to represent themselves through the real estate transaction.

Rep. Jim Patrick, a member of the Business Committee, said he’s concerned some customers don’t know what they’re getting into when they waive all services except the MLS listing.

“It sure is attractive when you see some really cheap rates for real estate fees,” he said. “Most people aren’t sophisticated enough and this is the largest purchase they’ll ever make.”

But some people are ready to make those transactions without real estate agents.

“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,” Darrel Richards wrote at www.idahobusiness.net. “The title company’s closing agent did everything and the Realtor tried to look knowledgeable/interested in what was going on.”
John Eaton, government affairs director of the Idaho Association of Realtors, said at a Business Committee meeting last week that real estate firms offering just MLS listings or other limited services cause problems. He said sometimes home buyers approach sellers with an offer and the sellers reply by asking if it’s a good offer.
“Our agents report this is happening frequently,” Eaton 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.
 “Basically it’s saying consumers aren’t smart enough and they can’t have choice,” said Heinrich Wiebe, co-owner of Fizbomap.com.
Fizbomap is a division of Genius Realty, and uses the limited-service business model the House Business Committee discussed.
“We see this as a built-in path to job security through statutes,” he wrote on the company’s Weblog. “The focus should be on consumers that are choosing to selling their own home, but don’t want to pay for 100 percent of the old-school Realtor package. Why should it be forced on them?”
Wiebe said Fizbomap offers customers the option of using Genius Realty agents to vet the offers they receive. Customers can opt to add this service at any time in the process if they feel overwhelmed, he said. Only one customer has ever opted to do so. No one has ever had to call with questions after they received an offer, he said.
Eaton said at the meeting that this wouldn’t affect “for sale by owner” homes because no real estate agent is involved. He said that it wouldn’t prevent companies like Fizbomap from charging low rates and offering limited services to their clients, as long as they are available to present written offers to their client, make counteroffers on their behalf, and answer basic questions about whether offers are fair.
Nor would it prevent an Internet-based company from doing business in Idaho, since the agents could present offers by e-mail, he said.
The bill is not designed to curb any existing business models, he said.
Wiebe said he doubts it’s that simple. The bill doesn’t define what an offer presentation means, he said. If it were merely a matter of e-mailing or faxing written offers to the customer and being available for a basic question or two, it might not be a problem, he said.
But he suspects “presenting” offers means sitting down in front of customers and explaining the offers in detail. If he has to do that, he said, he’s going to charge for it.
The Business Committee unanimously recommended to send the bill, which would amend the Idaho Real Estate Brokerage Representation Act, to the House floor with a “do pass” recommendation.
Wiebe said if consumers no longer have the option to just buy an MLS listing, many of them will elect not to use the MLS and will still try to sell their homes themselves, perhaps in new listing service types of sites that aren’t operated by Realtors. Some, such as craigslist.com and zillow.com, already exist.
“It will just aggravate the buyers,” he said. “The Realtors are really cutting off their nose to spite their face.”
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To contact the author of this story, send e-mail to:  lora.volkert@idahobusiness.net.