Why Is George Hackett Mad At Howard Hanna?

First, you have to read the Post-Gazette article, here. Then come back for my analysis.

There is an old trick they play in politics, justice and business: if you create doubt in people's minds, they just may not buy into an idea. This doubt is created in many ways. Here are a few examples:

Do you remember the Michael Dukakis tank-helmet disaster? His opposition candidate, George H.W. Bush ran campaign ads showing Dukakis looking "out of character" as he rode around in a tank trying to portray himself as strong on defense issues.

Do you remember the OJ Simpson criminal trial? Defense attorney Johnny Cochran coined a phrase we'll remember forever: "if it [the glove] doesn't fit, you must acquit."

More recently, Gatorade has sued Powerade over claims made by Powerade that Gatorade is nutritionally lacking. (See the details of that suit here.) Regardless of whether Powerade's assertion is correct, Gatorade couldn't just sit there and watch Powerade take market share away from them. Instead, Gatorade decided to take the case to the court of public opinion.

In effect Gatorade is saying, "Dear Gatorade drinkers: our drink is not deficient and we're willing to spend the money to sue someone in hopes that you'll believe us. Until a judge actually decides whether Powerade's assertion is correct, Gatorade hopes you will continue drinking our product. Love, Gatorade."

It is readily apparent that Mr. Hackett is not pleased by Howard Hanna's recent "Buyer Advantage Program" that features "worry free home buying." Let's find out why: according to the Post-Gazette article, Mr. Hackett feels that Hanna is trying to deceive Sellers by hiding contractual language that would require them to pay $329 for an insurance policy that would pay for several mortgage payments in case the buyer loses his/her job after the closing.

Mr. Hackett apparently thinks that Hanna's buyer agents should be required to verbally notify listing agents that the language is included in the contract.

This is a huge red-herring for the uninitated. You see, real estate law dictates that everything about a contract to convey a house must be in writing. That rule is called the statute of frauds. In a nutshell, the statute of frauds requires that the terms of a contract should be in writing in order to prevent fraud from occurring. (For more explanation, please read here.)

By asserting that Howard Hanna is doing something "sneaky," you've got to accept at least one of three conclusions from Hackett's criticism:

1. Coldwell Banker agents don't read the contract when an offer is made to their sellers;
2. Mr. Hackett demands a verbal notice to the listing agent anytime a buyers agent makes any written request to the sellers via the agreement of sale;  or
3. The agreement of sale should be one long, long page - like a scroll - because everything that has consequences that cost $329 or more should be on page one.

Before we analyze Mr. Hackett's conclusions, remember one thing: there is only one place in the body of the PAR agreement of sale to add additional terms: Page 10. Everybody who practices real estate knows that. There's ABSOLUTELY NOTHING SNEAKY about putting additional terms, whatever they might be, however they might be (typed or handwritten) on Page 10.

So let's proceed to the analysis:

1) surely CB agents read the contract thoroughly. That's their job. It's the job of every agent.
2) asking for a verbal notice for contractual language inserted by agents is impractical and would make the contractual negotiation process impossible. By the way, CB buyers agents do not now - as a rule - provide verbal notice to listing agents each time they insert additional contractual language into Page 10.
3) Almost every term of the agreement of sale has a financial consequence greater than $329. Plus scrolls don't fax well. The receiving fax machine has a tendency to cut scrolls into neat 81/2 x 11 sheets.

So why did Mr. Hackett complain to the press about Howard Hanna's sneaky conduct? My guesses:
1) Hackett is fed up with hearing the buzz about Hanna's "Buyer Advantage Program." His only regret is not thinking of the program first. Take heart George: you instituted the Admin fees to consumers before Hoddy did.
2) CB has spent so much money paying Hanna agents to leave Hanna, it would be unthinkable to lose market share to Hanna.
3) Maybe, just maybe, if George goes to the press and complains that Hanna's practices are deceptive, maybe someone will will actually believe him. Heck "someone" even told George that Hanna agents don't know that the language is appearing in their own contracts. (Interview with "someone" at 11pm.)

My advice to George: stay credible: create a gimmicky buyer "bailout" program of your own before Northwood or Prudential beat you to it. Quick, call your marketing department in Jersey!