It seems The National Association of Realtors (NAR) has the Department of Justice in a bit of a pickle.
NAR, in an effort to support its vast membership's best interests, has given the go ahead for Agencies not to allow Zip Realty to show their listings. In a recent article in Forbes the author writes:
The National Association of Realtors, responding to the online threat, plans to put in place Jan. 1 new rules that could zap Zip and other discounters. The Realtors are pros at the protection game and have beaten back other interlopers, including the nation's biggest banks and Microsoft, which last year gave up a five-year effort to compile its own real estate listings.
So the Deprtment of Justice has stalled NAR from implementing their new rule.
Later in the article, Southern California Catalist Homes Broker Michael Davin says,
You can't blame Realtors for fighting to keep anticompetitive laws. Without them, the industry would be in for a shakeup. "Fundamentally, it really hasn't changed since the Twenties," says Michael Davin of California discounter CataList. The average Realtor today sells fewer than six houses a year. While other fields have become more productive, Davin says, "real estate has gone backwards."
A RealtyTimes.com article made an unconvincing point that the Forbes piece is unfair in that it takes a one sided view of discounting. It takes a victim view as if the Corporate wooptie woops (that is official language that means big shots) are picking on the poor non-corporate Realtor.
Here is my take:
There will always be a place for discounters and always a place for the Full Boat commissions. But reality is reality guys. The full service guys are being pushed down in commission and the discounters are finding they cannot make it at ridiculously low rates.
So we have an industry average of 5.1%.
Zip Realty, as pointed out in the Realty Times article has raised their rate a bit, while the tradionalists are beat down in commission. In the end, every body ain't that far apart.
However, that is not what is bothersome. What is bothersome is that agencies are keeping their listings from being freely circulated via the IDX/VOW protocol. Now these guys may claim they have the right to their listings, but who in the hell are they representing?
It sure isn't the seller.
They are attempting to protect their larger commissions by punishing the discounter. Ironic isn't it? The very reason the discounter has a marketplace is because of the the perception that Realtors overcharge for little service.
Well, when 70% of the buyers use the web to find a house to buy, and a seller's house is not part of the larger syndicate of homes on the web, who is not getting represented?
The Realtor community can pretend this is not going on, however, Catalist Homes mentioned above has been blackballed by some in the their MLS community in which I live. Meaning some agents have refused to show their listings because of Catalists discounting model. One company in particular has refused to share their MLS data thru VOWS. It is believed they did this as a way to make it difficult for Catalist to represent their listings.
What it comes down to in my opinion is that the industry lead by NAR has been intellectually dishonest. I believe that they probably do a better job at representing the needs and concerns of the vast majority of Realtors and not the few.
What a great organization you might say. Except Realtors are independent salespeople and the 80/20 rule applies. The few are what floats the boat. They are your transactions. They are your profit.
The few are rarely outspoken because they are too busy selling!
Thus, I think the opinions that matter. The opinions that are changing the industry in one way or another, are not heard. Ask any top producer in a competitive marketplace like Los Angeles if the Realtor designation matters at all. Most will laugh.
Yet, NAR and its followers (the voices of the industry) are quick to point out what a great job it does at protecting it constituency. Just listen to its latest branding campaign and you know there is a screw loose somewhere. "Ask if your agent is a REALTOR®, a member of the National Association of REALTORS®." Does anyone care?
So the real issues are blindsided as NAR and all the state AR's push for silly awareness campaigns to justify their existence and build machines like Realtor.com that suck your dues out from underneath you. Meanwhile, the value of you the Realtor's only tangible assett the MLS, is devalued thru FREE and ungoverned syndication.
It is this last issue that should really be the main concern of all Realtors as this is what is really driving commissions down.
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