It is this whole idea of choice, where consumers pick and choose which professional services they want and which ones they don't want, . . . that is at the heart of the issue today, said Phil Querin, a real estate lawyer with the Portland, Ore., law firm of Davis Wright Tremaine. It is what has driven the U.S. Department of Justice and the Federal Trade Commission to take action against the NAR and to discourage state regulators from enacting minimum service laws.In the court of Consumer Opinion, you can pretty much assume that this case has already been lost by the real estate industry. The outcome of the lawsuit is inferior to the collateral damage being inflicted in the marketplace. Web-savvy home shoppers and sellers are becoming increasingly disgusted with the profession. They are, as a whole, seeking out better ways to do business in the real estate sector. They are also becoming informed and educated as to the perils of doing business with the traditional real estate agent. Do you think they don't know that most brokerages and the NAR seek to restrict co-branding relationships with favorite destinations like Yahoo!, MSN, eBay and Lending Tree, Redfin and the like? Remember, these people are tech-savvy. When you post rants about how Mrs. Ummel is "an idiot" or when you post on blogs information on pocket listings and making huge commissions with an admitted lack of marketing ...don't you think they can read what you post? When you are asked directly to justify your commissions and the best you can come up with is "stamps and gas"? How do you expect the American consumer to respond to your profession? I have asked EVERY agent I have ever come in contact with to tell me how they justify their commision. I have asked every real estate agent I come in contact with to tell me how much their marketing budget is for a property. I get basically the same nonsensical tilting of the head with no reasonable affirmative response. If you can't tell a consumer why you are needed, and if your response to a lawsuit as in the Ummel case that "she should have done her due diligence", then why are you as an agent needed? The next time you are asked that question don't call Lawrence Yun or anyone at the NAR, think for a moment and realize the truth. In the current business model of rhetoric filled statements and boiler-plate forms, you really aren't. Do you think the 70-80% of those who start their search on the Internet looking for properties don't read anything beyond listings? The real estate profession can't possibly be that naive...or can it?
Sellers want their homes marketed to the broadest possible audience of prospective buyers. These same Sellers are being left speechless as they continuously learn that Realtors are PURPOSELY and WILFULLY restricting service, not acting in the best interest of the client and basically fleecing the consumer to inflate their commissions. Too add insult to injury these brokerages, instead of mandating a clean-up of their embarrassing rank and file members, are instead using their control of state licensing boards and lobbying power to influence state and national legislatures to protect their outdated way of doing business. This does nothing to improve the image of a real estate agent nor does it do anything to endear the consumer to the real estate agent. It actually serves to effect the contrary.In April of 2007, the Department of Justice and the Federal Trade Commission issued a report about the state of the real estate business, and in that report it was concluded that competition, and the resulting necessary change of the business model was being hindered by some real estate brokers, the NAR, state legislatures, state real estate commissions and local Realtor boards. Based upon their findings, the DOJ and FTC advised that certain changes would be needed to PROTECT the consumer from the actions of real estate agents. Those changes advised a much more open exchange of information between the consumer and the real estate agent...but it seems the most significant change recommended was for real estate agents to actually promote change. The DOJ thought it wise for real estate brokerages to actually explain to consumers the "wide range of alternatives available to them when hiring a real estate broker, including the types of business models available and the negotiability of fees, for both home buyers and sellers", who may or may not understand the duties owed by their broker". Lastly, the DOJ / FTC report advised that the business model may need to be retro-fitted. The report advised and suggested that real estate commission rates and fees charged that now move in tandem with housing prices may not be the best course for the future evolution of the real estate business model. The DOJ vs. NAR lawsuit was filed in 2005, the DOJ/FTC report came out in April of 2007. There has been more than ample time to make broad sweeping changes to improve the industry we are all a part of. Why haven't they been made? Do we collectively think the consumer is dumb and has no choices but to accept the way business is being done? What changes have been made on a national or local basis to accommodate and better serve the interests of buyers and sellers? What exactly are you doing on an individual basis to enhance your credibility and ability to properly be the best agent that you can be? These questions are not asked rhetorically. They require substantive thought and we should all demand a call to action. The bell has been sounded and if no one answers it with credible and impactful change...one can only expect more and more lawsuits. The alternative could mean the ultimate extinction of the current real estate agent business model. Which in review of the status quo, might not be a bad thing at all. All of this now being said, do you really think Mrs. Ummel needs to win for her case to matter?