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Misleading Advertising - Agents Slamming Other Agents

By Eric Kodner

Real Estate Broker/Owner with Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes

May 22, 2008 08:43 AM

This morning, I watched a local Minneapolis & Saint Paul area television show which featured an area "fixed-price" real estate brokerage firm. The television station has an evident fondness for this company (or their money), as this is the second time in a month I've seen them featured.

(1) Visit this company's website and you'll find a page titled "Service Comparison Chart". The three-column chart is designed to compare the one-price company to what they describe as the "Full Commission Broker/Agent". A third column is labeled "For Sale by Owner - Assisted".

*QUESTION ONE: Define a "Full Commission Broker/Agent" please. What do they mean by "full commission"?

Is this company implying companies who don't use a fixed-price commission model never negotiate? That would be a violation of Federal Anti-trust law. Are they accusing everyone who is not them of charging the same commission rate?

Should this flat-fee real estate company be allowed to mislead the public in this manner?

(2) Their chart goes on to claim that these "Full Commission" competitors do "Not Often" offer "Online access to area real estate listings".

*QUESTION TWO: Are you kidding? How many firms in Minneapolis and Saint Paul do not have an MLS Broker Reciprocity portal on their website? Show me some of these, please.

The company service comparison chart goes on to claim that they offer the following advantages that other companies do not: Full service, state-of-the-art mapping and search, complete web resource (what is complete?), qualify for mortgage online, online access to area real estate listings, instant email notification, more resources and better service for less, 1-800 number and personal home pages for clients.

COME ON! How can you make such ridiculous, unsubstantiated claims? I can show you hundreds and hundreds of companies in the same service area with the same (or better) features and more.

*QUESTION THREE: If the only way your company can attract business is by misleading the gullible among those who see you on television or visit your website, why are you in business in the first place?

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Diane & Bob Arenholz

William RAVEIS Realty - Yorktown Heights, NY

Covering all of Westchester County, NY

Eric,

Interesting post. I just took an ethics class and I think your brokerage might have legitimate legal issues to bring up to this company....What is your broker's opinion about this matter?

May 22, 2008 08:54 AM

Eric Kodner

Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes - Minnetonka, MN

Wayzata Lakes Realty: Twin Cities, Madeline Island

Diane & Bob -- I AM the broker.

In my opinion, it's false and misleading advertising. It inflates the value of what they are offering and wrongfully denigrates the level of service provided by competitors.

May 22, 2008 08:58 AM

Audrey June-Forshey

RE/MAX Realty Services - Darnestown, MD

GRI, Gaithersburg, MD

Eric, I always think it is so sad that people believe everything they hear on TV as the gospel. I guess we will have a never ending job of educating the seller. Is there anything you can do to challenge the broker on TV?

May 22, 2008 09:53 AM

Audrey - One of the brokers who run the company happens to be an AR member.

These people know what they're doing. They are not unaware that what they've written is improper and very misleading. I'm surprised that some of the larger firms in the area haven't taken them to court.

It's discouraging to see people in the industry doing this to each other to make a buck. It presents a poor image of the industry to the public.

May 22, 2008 10:03 AM

Susan Walters

Keller Williams Realty, Ann Arbor, MI - Ann Arbor, MI

Full service is full service. My husband cringes when I list another property with a $200 virtual tour plus advertising throughout, and open houses, plus my Department of Listing Services help, and my Transaction Coordinator for closings. Let's see a discount broker do that! And, it DOES make a difference!

May 22, 2008 06:12 PM

Madeline Island Realty - La Pointe, WI

CRS, Madeline Island Realty, LaPointe, WI 54850 -

Susan, I just have trouble with any firm, whether it's a discounter or a "full-service" company, blatantly misrepresenting themselves and denigrating others without any proof. If being dishonest is the only way they can pick up clients, what does that say about their business model?

May 22, 2008 06:25 PM

Ross Quintana

Real E Smarter - Spokane, WA

Real E Smarter Real Estate Coach - 509-362-1966

I agree, full commission, and full service can't be defined as we all offer different services and fees. This type of advertising should not be allowed. It dables in the concept of set prices which there aren't. It is not different than if they said all other agents charge 6% but we charge x. They simply can't say that or imply it in my oppinion.

Jul 18, 2010 03:02 PM

Misleading Advertising - Agents Slamming Other Agents

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