Department of Justice is WRONG!!!

By
Real Estate Agent with Premiere Plus Realty Marco Island BK3351211

JUSTICE 

At the urging of our famous Broker Bryant, I am making this a post.  While reading one of BB's greatest posts, I was directed to read:http://www.bloodhoundrealty.com/BloodhoundBlog/?p=978.  Upon doing so, I discovered that one of their regular contributors over there is a Mr. Michael Cook.  Mr. Cook wrote a horribly misinformed perspective about real estate agents and the "monopoly" they have created.  The following is my response:

"Mr. Cook,

What is a "standard commission" that you referred to? You clearly don't know my market. I've seen commissions from 2% to 10%. Where is the monopoly?

You even mentioned 5%-7% varied commissions. How is 5%, 5.25%, 5.5%, 5.75%, 6%, 6.25%, 6.5%, 6.75%, and 7% FIXED? Even from YOUR statistics (which aren't accurate) how does 9 different commission rates equate to "fixed"? Look it up in the dictionary. Where is the monopoly?

You stated that you negotiated down your commission on the sale of your "slam dunk" property. You couldn't have negotiated anything if it were as you called it "fixed". Where is the monopoly?

The reason the Justice Department is looking into the real estate business is because of uninformed people like you whining about commissions. If there's so much money to be made in real estate, why do 9 out of 10 people fail in the first year of the business? If there's so much money to be made in real estate, why does our company (the number one company in sales in our region) only make an average of $140 per transaction? Where is the monopoly?

You commented, "So why have consumers not demanded lower prices", what? Have you seen teachers salaries decrease? What about police and fire fighters? The reason most people's income doesn't go down is because of the free market system of supply and demand. You see, the average person isn't interested in working nights, weekends, during their child's soccer tournament, on a sunny Saturday when the golf course is calling, on their birthday, on their anniversary, getting calls at all hours of the day including dinner and sex, and most people don't care to replenish their flyer boxes and try to drive in open house signs into the frozen ground when it is -3 degrees out like today! You see, it's the tough ones that survive this business. It's the value received by the consumers for services rendered that keeps the commissions at a fair level. Where is the monopoly?

You didn't step on my toes, but you stomped on common sense all over the place!

Mr. "NYCJoe",

Do you go into a private club and expect them to serve you dinner when you aren't a member and haven't paid your dues? What about a private golf course? Do you expect to play their course when you haven't paid the dues that support their greens and staff? If you have a hammer and nail bag, do you expect a carpenter's union to give you work when you haven't served an apprenticeship or paid your union dues that support their organization? There's another hundred analogies out there but hopefully you get the point. No one, including the DOJ, can claim a monopoly here when all someone has to do is pay a fee to join and pay a fee to support the services NAR offers to its members. Or they could go the more expensive route and start their own organization (and I'm sure that they wouldn't want to charge anyone for providing all these services to them because that, in their minds, would be a monopoly).

Did General Motors cry "foul" at Ford?

Go on out and start your own association/organization if you want. Or join the rest of us hard-working, PROFESSIONALS in NAR! Wake up! There ain't no free lunch in life!

IF YOU WANT TO DANCE TO THE MUSIC, YOU GOTTA PAY THE PIPER! Pied Piper

Lucky :) "

Well?  What say ye "Rainers"?  Shall we "Rain" on his parade?

Posted by

For info about Real Estate Anywhere in the World, please call:

LUCKY LANG, VOTED FAVORITE REALTOR®

Lucky Lang Davenport Iowa Real Estate for Sale

Lucky Lang, SRES®, RFC, M.I.S.

Licensed in Florida & Iowa

Premiere Plus Realty, 886 Park Ave. #103, Marco Island, FL 34145

Cell: (563) 676-9031

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Rainmaker
185,772
Irina Netchaev
Pasadena Views Real Estate Team, Inc. - Pasadena, CA
Pasadena CA Real Estate
Great post.
Feb 05, 2007 12:54 AM #15
Ambassador
4,167,673
Jeff Dowler, CRS
eXp Realty of California - Carlsbad, CA
The Southern California Relocation Dude
Go, Lucky. Great post - thanks for saying what needs to be said...again and again.
Feb 05, 2007 01:17 AM #16
Rainmaker
226,979
Joan Snodgrass
Midamerica Referral Network - Kimberling City, MO

Right on.  Thanx. 

 

 

Joan 

Feb 05, 2007 02:04 AM #17
Rainmaker
217,815
Lucky Lang
Premiere Plus Realty Marco Island - Marco Island, FL
Marco Island & Naples Florida Real Estate

Ardell:  My post is actually about Mr. Cook's blog.  I commented about the DOJ looking at real estate agents because of people whining about commissions.  If discount brokerage companies aren't about commissions, please enlighten me.

Gena, Sam, Marty, Danny, Sharon, William, Jeff, Irian, Jeff, and Joan: Thanks for the comments and encouragement!

Lucky :)

Feb 05, 2007 02:56 AM #18
Rainmaker
164,037
Jeff Miller REALTOR ® Tampa Bay, FL
Charles Rutenberg Realty - Wesley Chapel, FL
20 years experience Tampa Bay/Wesley Chapel

I once negotiated with a Realtor to reduce her commissions.  She did so because this house was going to be a slam dunk and she knew we were fairly knowledgeable about the process.

and then

 I had a house sell in six days, with the closing following in another twenty.  My agent remarked that this was the easiest deal she had ever done, then promptly took her seven percent cut (3.5% to be fair) right to the bank.

 

Reduced to 7%???

 

This fellow is confused at best.

 

I would like to make clear that I agree with Lucky on his post.  I think the subject of his concern is the one who is confused at best. 

Good post Lucky. 

Feb 05, 2007 03:00 AM #19
Rainer
15,006
Jacqueline McCroy Elbert
RE/MAX Realty Suburban - Overland Park, KS
Thank you for giving Mr. Cook such an eloquent  come to Jesus.
Feb 05, 2007 03:26 AM #20
Ambassador
685,887
Rob Lang
At Home Kansas - Lawrence, KS
Local Expert in Lawrence Kansas Real Estate Homes
Congrats on the featured post.  Great blog topic and it needed to be said.
Feb 05, 2007 03:32 AM #21
Rainmaker
197,736
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes
Lucky: Perhaps we could un-confuse the DOJ if we presented commissions in decimals or basis points?

6.330
4.782
7.279
3.750
1.155

We already offer 6, 4, 1 and O percent listing options. 

I would also look to motive with the DOJ. Banks in real estate? 
Feb 05, 2007 03:47 AM #22
Rainer
18,772
Andrew Hodge
Right At Home Realty Inc. - Richmond Hill, ON

I have never really understood how the DOJ has rationalized this law suite of theirs.  MLS® systems are a product created by member REALTORS®, for member REALTORS®.  It is a service and like any service it has its rules and codes of conduct to insure that it is used in a manner that was intended and benefits all of its members, and through them their clients.  not allowing unrepresented sellers onto an MLS® system is totally within their right.  I have noticed though that some MLS® systems in the USA seem to allow the general public near full access to the listing information and allow all members to post all of the listings on their websites through IDX agreements (not just there own or their companies listings).  I feel that this does undermine there service and the services of there members. 

I am not fully fond of MLS.ca but at least they only post a client version and not sold data.  It is truly a marketing site and not an income generator or an effective market research portal for the public. (although the public often feels that it can replace an agent that is only because they do not understand the limitations of the public system.)

Feb 05, 2007 04:02 AM #23
Rainmaker
217,815
Lucky Lang
Premiere Plus Realty Marco Island - Marco Island, FL
Marco Island & Naples Florida Real Estate

Jeff, thanks for the update and clarification!

Rob, thanks for stopping by big brother!

Roberta, what a great idea.  (I like the 7.279)  DOJ & banks in real estate?  You don't think there could be a connection, do you?  Hmmm......

Lucky :)

Feb 05, 2007 04:10 AM #24
Rainer
10,983
Michael Jordan
Tarbell, REALTORS - Murrieta, CA
Good post, and I like your name, it rolls of the tongue nicely.
Feb 05, 2007 05:14 AM #25
Rainmaker
165,699
Home Design
Alpharetta, GA
Home Design and Real Estate
Wow!  Awesome Post!  I havent read one like this in a while.
Feb 05, 2007 07:05 AM #26
Rainmaker
138,226
FRANK LL0SA Esq.- Northern Virginia Broker .:. FranklyRealty.com
Northern Virginia Homes - FRANKLY REAL ESTATE Inc - Arlington, VA

Yo! You only make $140 per commission? Maybe you need to increase your Admin Fees.

 

Love to get your take on my new blog: $395 Realty Firm's "Admin Fee": Junk or Legit?

Frank Borges LL0SA- Virginia Broker/ Owner FranklyRealty.com

Blog.FranklyRealty.com Featured in BusinessWeek, CNBC, WSJ etc.

                      

 

 

Feb 05, 2007 02:55 PM #28
Rainmaker
197,736
Roberta Murphy
San Diego Previews Real Estate - Carlsbad, CA
Carlsbad Real Estate and Homes
Lucky: Doth the DOJ protest too much about monopolies? What powers lurk behind the charges of these pawns? Banks seem like a logical whisper.

Bah! I have never, NEVER heard the NAR, a local Board of Realtors or an employing broker even HINT at set commissions. I have always free to charge and give away what I will. 






Feb 05, 2007 03:11 PM #29
Rainmaker
559,062
Maggie Dokic | Miami, FL | 305.81.HOUSE (46873)
eXp Realty LLC - Miami, FL
GREEN, CDPE, SFR, Pinecrest | Palmetto Bay |

Lucky, BB is pretty great, isn't he?  Thanks again for your post.  I enjoyed it.

btw, is that your real name?  It's a great one!

Feb 06, 2007 02:18 AM #30
Rainmaker
217,815
Lucky Lang
Premiere Plus Realty Marco Island - Marco Island, FL
Marco Island & Naples Florida Real Estate

Michael, Jennifer, Terry: Thanks for your comments!

Frank: Very interesting post you had.  We don't have an admin fee and when I said "our company", I was referring to the company I am licensed with.

Roberta: You speaketh words of wisdom!  Useth caution, oh wise one, to not giveth awayeth too mucheth!   (Try saying that fast three times!)

Maggie: BB is awesome!  Lucky is my real name!  I named my son after me: Lucky Lang II http://activerain.com/luckster77 so he is Lucky too! (Sorry, I couldn't resist)

Lucky :)

Feb 06, 2007 03:25 AM #31
Rainer
18,772
Andrew Hodge
Right At Home Realty Inc. - Richmond Hill, ON

Roberta: I believe that the law suit is more about MLS® systems preventing none member and FSBO services from posting their listings on the MLS®.  But then there is a reason why I need to keep punching "Alt 0174"(® for those that do not recognize it) as MLS® systems were never meant to be free public use tools.  Unfortunately it seems that some of the systems have opened themselves up to being seen as public systems through their rules and practices.  I do not know how the DOJ can really justify their attack on MLS® systems and boards, but it does seem to be something that they are willing to waste money on and at the expense of the REALTOR® boards which of course will only cause fees to rise and commissions to have to remain high or go higher in order to off set the extra costs of remaining in business.

Most likely it is a political move to distract people from other issues and make them look like they are trying to protect the public but it will be the public that ends up paying for it in the long run, through taxes and higher real estate fees.

Feb 06, 2007 03:49 AM #32
Rainmaker
559,062
Maggie Dokic | Miami, FL | 305.81.HOUSE (46873)
eXp Realty LLC - Miami, FL
GREEN, CDPE, SFR, Pinecrest | Palmetto Bay |
What can I say?  That put a big smile on my face for sure.  Lucky indeed!
Feb 06, 2007 04:32 AM #33
Rainmaker
305,020
ARDELL DellaLoggia
Better Properties Seattle - Kirkland, WA

Lucky,

The DOJ suit is/was about the opt out clause.  About agents opting not to share their listings, via IDX, with only certain companies such as "discounters".  Any marketplace that is topheavy is considered to be a monopoly.  It's not because they want to or try to, such as the old AT&T, sometimes it just happens that way without intent.

Feb 08, 2007 04:31 PM #34
Rainmaker
217,815
Lucky Lang
Premiere Plus Realty Marco Island - Marco Island, FL
Marco Island & Naples Florida Real Estate

Ardell,

Thank you for your comments, however I respectfully disagree with some of them.  I know what the suit is/was about.  Mr. Cook was trying to take the headlines of the suit and sensationalize them to his view.  Mr. Cook stated in his blog, "If you stop to really think about this, you will realize that real estate agents have created one of the longest standing monopolies out there."  As Broker Bryant properly stated, Monopoly my a..!  He then went on to reason that the DOJ was going after NAR because the commission, "has stayed fixed for so long".  His comments in his blog were reckless, wrong, and hurtful to an industry that feeds him (he's a real estate investor).  As I stated in my blog, if it weren't for uninformed whiners out there, like Mr. Cook, the DOJ wouldn't have bothered.  They are a department of reactionaries, usually not proactive, in practice.  In economics, the definition of a monopoly is a persistent market situation where there is only one provider of a kind of product or service, in other words, a market type in which there is a sole supplier of a good, service, or resource that has no close substitutes and in which there is a barrier preventing the entry of new firms into the industry.  The mere existence of "discounters", as you called them, PROVES there is no monopoly!  The old AT&T was a totally different situation.  When I got my first phone service, I had no choice.  There were no "discounters".  It was "Ma Bell" or nothing.  In my market, someone trying to sell their home can "go it alone", can call a "discounter", can call someone in my own company who may cut .25% off their commission (or whatever), or call me...a full service REALTOR(R) who will, on average, sell their home for more money and/or in less time.  The bottom line....is the BOTTOM LINE!
IF YOU WANT TO DANCE TO THE MUSIC, YOU GOTTA PAY THE PIPER!

Lucky :)

Feb 09, 2007 08:02 PM #35
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Lucky Lang

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