Monday, September 26, 2005

Discount brokers get what they deserve

The United States Department of Justice has filed an anti-trust lawsuit
against the National Association of Realtors saying, its practice
of  limited access to its MLS service by discount real estate
brokers is discriminatory and anti-competitive.

This little game has been going on for a long time. Real estate is a
competitive and cooperative marketplace where its player's reputations
are almost as important as their skill. Most discount brokers don't
have great reputations so the other players just decide not to play
with them, at least not on the same court. My own experience is that
discount brokers (most, not all) are uncooperative and ineffective in
their practice of Real Estate. There is a trade off with these brokers
who greatly discount their services and entice sellers to sign contract
that basically absolve the broker of any wrong doing during the
transaction and shortly afterward. Essentially, less service + No
accountability = discount broker.

Just for a moment I would like to make a few points about this business
we call real estate. First, I do not sell homes. I coordinate the
transaction. Nothing I say or do is going to make your mind up about
whether or not a particular house might be the right on for you.
Second, whether I'm the listing or the selling agent (sometimes both)
there are a million little tasks that must be completed by each party
to the transaction in order for it to close. Those tasks are beyond the
scope of this rant but suffice to say each side is responsible for
making sure certain aspects are complete and accurate. Discount brokers
largely leave these tasks to their client (seller), which is a little
like a Brain Surgeon telling his patient he'll get a discount if the
patient does 90% of the surgery himself. For me this means that if I
represent buyers who are trying to buy a house listed by a discount
broker, I end up doing most if not all of the work - which of course
puts me in a situation where I'm really a double agent now. (dual
agencies are perfectly legal in California) which puts me at risk
because now instead of being RESPONSIBLE FOR the buyers side I'm also
RESPONSIBLE FOR THE SELLER TOO. Now - Do I get paid more for this
increased work load and liability? No! And that is precisely why I
refuse to work with discount brokers unless its on my terms.

Furthermore, discount brokers claim that by excluding their listings
from the mls, buyers are somehow hurt because they cannot see the
entire inventory of homes available in the area. You're damn right they
are! First off - Discount brokers don't generally represent buyers so
what do they care? Second, If I've got buyers who want a home in an
area and their are two options one is listed by HopeUSell, the other by
ReLAX. I'm going to highly recommend writing an offer on the ReLAX
listing. Its called risk management. ReLAX will be there tomorrow if
there is a problem and together we can work it out. They are PART OF
THE COOPERATIVE marketplace and understand the concept of working
together to reach a common goal of, closing the deal - not just getting

1 comment:

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