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CBS and "60 Minutes" Bash Conventional Realtors Again

By Bill Cherry

Dallas Realtor-Broker

My 43rd Year Serving Texans

Meet me on the web at www.billcherrybroker.com

Tonight, Sunday, May 13, 2007, "60 Minutes'" Leslie Stahl filed another report that insinuated that buyers and sellers of homes would be better off if they were to use an Internet broker like Seattle's Redfin.

I have never found it particularly difficult to refute these arguments and what the supporters use as evidence, but it is rather impossible when only one side is presented, as was Ms. Stahl's stance.

I found this one-sided presentation terribly offensive.

Her report boiled down to this: The Internet brokers want to have full use of the services owned and used by conventional agencies without having to pay for them, like the Multiple Listing Service.

And they want the homeowner to list his home with them and then do all of the work - figure out by themselves how to prepare the property to show best, be home to show the property when a prospect calls, prepare all of the documents and feel their way through the closing.

By doing this, they can reduce the fee to $3,000.

Nothing is said about how the homeowner knows his house has been properly priced by the Internet broker, or what happens when a conventional real estate agent has a client to whom he would like to show the house. After all, the conventional agent expects to earn 3% if he sells the house.

Ms. Stahl ignores the cost of the conventional broker's office, support staff, advertising, errors and omissions insurance, and that the conventional agent's experience and education has value. The Internet broker has none of that...no place for a customer to go other than the client's home.

I was an invited guest on a weekly radio program on Dallas' KAAM-AM radio's called "The Money Doctor" and it's hosted by Dr. W. Neil Gallagher. That hour long program pitted me against Doc Gallagher as he played devil's advocate - there's no need for a Realtor. I had to convince him and his audience that there was.

A CD of this program is available to you by sending me $2.00 to cover the cost of packaging, postage and the disc. Email me for instructions. It's a good piece for those who are trying to decide whether or not to use a conventional Realtor, and it's a good piece for Realtors to use as a part of their listing presentations.

I'm offering this as a public service.

Posted by BILL CHERRY on 05/13/2007 08:30 PM

Comments (15)

60 minutes, discount brokers, redfin, 60 minutes red fin report, leslie stahl, mls, multiple listing service

Originally posted at: BILL CHERRY'S GREATEST DALLAS PARK CITIES REAL ESTATE BLOG: CBS and "60 Minutes" Bash Conventional Realtors Again

15 Comments on CBS and "60 Minutes" Bash Conventional Realtors Again

MAY

2007

I received a call from one of my past clients instructing me to watch this.... We have companies here in MS that promise to sell the homes at a discounted commission but the seller really needs to read the fine print. It is very true you get what you pay for.

You really do get what you pay for. I have had so many people come to me complaining about the internet brokers who have wasted their time and money. I am sure not all of them are like this, but I know there are plenty out there who are! Many of them get paid up front and never look back. Around here, that may have worked 2 years ago... but in this market, you need a hands on person to help you sell your house.

Eva

I saw this thing. One of my agents called and asked me to watch it. I hadn't planned to because I knew what it would be.

What can I say. They had an agenda and they found a dupe agent who walked right into the trap.

What does show do for 6%? Puts the house in the MLS and sticks a sign out. Nuff said.

Michelle, we as an industry of professionals have done a terrible job of educating the public of our value. And further, we have done a terrible job of raising our standards so that every Tom, Dick, Sally and Jane can't get a license so they can be Play Like Realtors.

When I first got in the business, you couldn't be a Realtor if you weren't full time and didn't have an office in an area zoned for offices...in other words, no home offices.

Bill Cherry

Good analysis but I would disagree on the MLS piece. NAR needs to be careful, as they have essentially locked up mostly public data through lobbying and have selectively restricted it to 'discount' outlets. This is not too different than the gasoline companies, OPEC, DeBeers diamonds, etc... and tends to upset the public even when it could be argued it provides a benefit.

I can't possibly imagine that NAR will ever let this really pose an issue. They have the bankroll and the contacts where it counts. Republicans need friends with Bush in the tank now so they shouldnt mind a bit of protectionism for a large and well financed voting block.

As far as the concept, I can imagine there will be some people who chose a discount stock broker.

Leslie grew up here on the North Shore and you kind of expect lots of liberal dogma but no one is taking her serious! Just another television elitist rant.

I saw 60 minutes tonight and was outraged at the bias in the report. No recognition of the time a Realtor puts in behind the scenes to sell a property,no cost of advertising, office space, postage for mailings, etc. I tried to log in to redfin.com and got a message that the site was overwhelmed with visitors to the site after 60 minutes and they hoped to back to normal by tomorrow. Realtor.org does seem to be doing a good deal of advertising to get the real story out.

Presenting both sides of the story really wouldn't create all of the buzz that they have by doing the story the way they did. It just comes down to agents educating the public, and demonstrating that we bring tremendous value to a transaction.

I have to stand with you guys on this. I don't charge as much as most of the local companies but I am not a dicounter brokerage. I am a traditional brokerage that just doesn't charge as much. I am a small comapny and I have very low over head so like any good business model the more I save my self the more I can save my clients. Folks like Help-U-Sell are a bit better than the discounters. Thier fees are simular and you show your own home to save the money but they are at least there to help if you need them. In Mississippi it is illegal to give rebates so we don't have that to worry about. I posted on here about how the comany Help-U-Sell works. I know how they work bacause I used to work for them. I lit a fire under the broker of the local Help-U-Sell. He started screaming anti trust this and that. I suppose he did not want the general public to know what his comapny really did for them.

Jason question. Do you pay for access to your local MLS? If so why can you not restrict it. It is NOT public information. It is information that belongs to me as a broker. I can chose not to put that information on the MLS and I can chose not to be a Realtor. So why can't they restrict their membership to people who provide a certain amount of service. It seems to me this is a way of protecting the consumer. If you don;t provide xyz service you can;t be a Realtor

Thanks to Jeff for doing a better job of making the MLS ownership point than I did.

And thanks to John. One of the things that was very obviously missing was an interview with a seller who had used Redfin and not been happy or had not sold their home.

And to Diana. It will be interesting to see if Redfin actually profits by this report or crashes and burns because their business model is flawed.

Michael. It would be interesting to know how Ms. Stahl has transacted her own real estate business over the years. Has she used conventional brokers? Has she used a Redfin? How'd she pick Redfin for this piece over all of the other discount brokers?

And, lastly to the rest of you who posted comments. I think your points show that you are not only competent professionals, but thinking competent professionals.

Bill Cherry

Jeff,

Its a valid point, but then you become a monopoly/cartel and you are inviting regulation, breakup etc.... It is not black and white, but it is a very thin line when one entity controls an 'essential resource' like electricity and then dictates terms of use that tend to restrict competition.

When that one entity has the cash to lobby and change laws all over the country for its members benefit, certain government types (who maybe looking to launch a bigger career) get all excited.

MAY

2007

Hi Bill...I watched the show segment and, unlike most of the REALTOR viewers, I did not think it was so terrible, mainly because, like you, I have no difficulty showing the benefits of full service. In the abscence of service, all the discounters can offer is a lower fee. Here on the Massachusetts North Shore, sellers need a full service, full fee broker more than ever,

Regards...Jay

My neighbor who is a police officer made an interesting comment. "If a Real Estate Company is not physically checking the homes they are listing, is this not going to attract clients with grow-ops, mold or infestation problems with their home who otherwise would have a hard time listing through a full service Realtor?"

I wonder as well about the safety aspect of having total strangers, unscreened coming to view your home. Again would that scenario not be attractive to the criminal element?

Mike, thanks for your observations.

I have always had a rule. No agent meets a new buyer prospect for the first time anywhere but at our office. No agent leaves without leaving a copy of the prospect's drivers license with the office, and no agent leaves without giving the office a schedule of the showings.

One time I got in a big argument about that procedure with an agent. The guy claimed he had left his driver's license at home. I wouldn't let her leave with him. He stormed out. She thought I had cost her a sale.

Well, what happened was he left our office, went to another, that agent took him to show him vacation homes, and he killed her.

As you and your police officer neighbor pointed out, this business of a homeowner trying to show his own home with no way to properly qualify the prospect is seriously stupid. -- Bill Cherry, My 43rd Year as a Realtor.

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