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The Courts United States

Internet-Based Realtors Win Monster Settlement 337

Posted by kdawson from the disintermediation-works-eventually dept.
coondoggie writes "Until today, most Internet-based real-estate brokers were considered second-class citizens, and their clients were left in the cold. But perhaps that will change with today's news that the Department of Justice has reached a proposed settlement with the National Association of Realtors that requires NAR to let Internet-based residential real estate brokers compete with traditional brokers. NAR has agreed to be bound by a 10-year settlement, under whose terms NAR will repeal its anticompetitive policies and require affiliated multiple listing services to repeal their rules that were based on these policies." Here's the whole settlement document on the DoJ's site.
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Internet-Based Realtors Win Monster Settlement More

Internet-Based Realtors Win Monster Settlement

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  • Great. (Score:2, Insightful)

    by mrbluze ( 1034940 )
    Now where is the nerd-bit to this article? Apart from the fact that there's the word 'internet-based' in the summary. I mean, not everything on the internet is nerd.

    • Re: (Score:2, Insightful)

      by deepershade ( 994429 )
      Or perhaps it is, but not everything on this site would interest a nerd like you?

      News for Nerds. Nerds is a very broad term, and not everyone is going to have the same tastes in articles.
      Just pass on by the ones you don't want to read.

    • Re:Great. (Score:5, Insightful)

      by NMerriam ( 15122 ) <NMerriam@artboy.org> on Tuesday May 27, 2008 @07:45PM (#23564369) Homepage
      It's just one more example of Internet disintermediation changing economics.

      Hard as it may be to believe, there are still a lot of businesses that think this "internet fad" is going away, so seeing yet another major industry be dragged into the 21st century economy is interesting to a lot of folks.

      • Re:Great. (Score:5, Insightful)

        by Anonymous Coward on Tuesday May 27, 2008 @08:55PM (#23565023)

        so seeing yet another major industry be dragged into the 21st century economy is interesting to a lot of folks.
        "Realtors" are a cartel, not an industry.

      • Re:Great. (Score:5, Insightful)

        by PhreakOfTime ( 588141 ) on Tuesday May 27, 2008 @09:36PM (#23565381) Homepage

        I appreciate the views that others have of the real estate industry that are similar to what I saw while working as the IT grunt for a small real estate company. And yes, I heard the exact phrase 'the internet is just a fad' and IT was just a waste of money. The babysitting eventually got old for me, and I came to realize that I had to leave, because the people in charge just dont 'get it'. Not in a bad way, just in a 'my grandparents still listen to music on AM radio' kinda way.

        There is no other industry I have seen that is so absurdly protectionist in its business practices. And the result of that type of worldview has led some real estate companies to be literal fossilized relics of their time.

        This settlement gives me great pleasure to finally see, as the roadblocks setup by MLS are some of the most frustrating I have ever encountered, from the buyers point of view.

        Having seen the industry from the inside, I would never have any part of buying or selling a home through a real estate agent. If I see a house thats for sale that I want, I am patient enough to let the rediculous 'listing agreement' expire, and then buy it right from the seller directly. It is amazing how eager people will become to sell to you when they realize that waiting a few months can net them a 7% larger profit.

        And what ever happened to that small real estate company, you may ask? Well Caton Commercial [willcounty...tcourt.com] spends some of its time showing up to court cases brought against them by various old employees and business partners, and sending out threatening Cease and Desist [demystify.info] letters to other old employees.

      • Re: (Score:2, Interesting)

        by interest rates ( 1297057 )
        This is really a meaningless settlement that prohibits MLSs from blocking the use of their listings on VOWs (Virtual Office Websites) which are these days rarely used. The fat lady already sang in practice a year or two back and Trulias and ZipRealtys of the world have been aggregating listings and selling customers back to realtors. The most noteable part is the gobs of money NAR wasted on this.

    • Re:Great. (Score:4, Interesting)

      by QuantumRiff ( 120817 ) on Tuesday May 27, 2008 @07:56PM (#23564467)
      It has as much to do with this site as "internet-based" retailers did a decade ago. It is forging ahead, changing an industry. I don't have time to go sit with a realestate agent, I want to look at the houses online, and narrow it down to one or two, take a look at them, and make an offer. I don't want to have to give 3-6% of the sale price to somebody, when I do most of the work. (And no, posting some pictures and some text into a MLS database is not "work"). If I, as a nerd, can make the standard 6% commission go down to about 3% by using "internet-based" real estate companies, who have less infrastructure costs to support, and can make a profit on volume, instead of "services", then I can save many thousands of dollars. In California, many houses in "average" neighborhoods sell for around 400k. The commission you are paying to an agent is around $24k for the privilege of buying that house.

      • Re:Great. (Score:4, Insightful)

        by ShinyBrowncoat ( 692095 ) on Tuesday May 27, 2008 @08:04PM (#23564569) Homepage

        The commission you are paying to an agent is around $24k for the privilege of buying that house.

        Actually, the seller pays the commission, but the point is the same: why pay 6% to sell your house if a internet-based real-estate agency can get you in the same listings and attract almost as much interest at half the cost?

        • Re: (Score:3, Insightful)

          by ImaLamer ( 260199 )
          "Attract Almost As Much Interest"

          The funny thing about this statement, and the business that we are talking about here is this: I fired up this browser in the search of homes, condos and apartments in St. Petersburg, Fl where I'm thinking of moving for a different job. The reason this is an issue, and the reason the traditional real estate agent is so afraid is because this newfangled Internet (and this is how it intersects with nerd news) gives me the ability to check those listings from my home in Cincinn

        • Re: (Score:3, Insightful)

          by tyen ( 17399 )
          That's obfuscation from the real estate industry. The seller remits the commission, the buyer funds the commission. The agents say "the seller pays" to hide how the buyer is putting up all the actual funds of the commission, unless the transaction is a short sale where the seller actually puts up funds from their own pocket. Thus affecting buyer psychology. As long as the seller negotiates a price that is over the lien amount, any claim that the seller is "paying" the buyer (including claims of closing co
          • Not if you retain a buyers agent and set it up right. In that case the buyer pays the agent a fee on his side (which raises buyer closing costs) and the seller pays on thier side (which lower thier net). Like with lawyers the only winners are the listing agency (and maybe the agents). You are splitting hairs, the seller gets cash minus X% commission. If the seller wants a higher net they add X% commission to the price they want and ask that new number, THEN the buyer really is funding it without knowing i

        • Re: (Score:3, Informative)

          by larkost ( 79011 )
          The seller brings the house to the table. All of the money that is brought to the table is from the buyer's side (which includes the institution that makes the loan). So while the seller might be paying the realtor, they are paying with money gotten from the buyer. It might be presented as otherwise, but that is just a fiction.

      • Re: (Score:2)

        by jafiwam ( 310805 )
        Let's simplify this shall we?

        QuantumRiff

        Real Estate Business is a scam.
        There. See, how easy that was? /Waiting for my 6%

    • Re:Great. (Score:5, Interesting)

      by Frizzled ( 123910 ) on Tuesday May 27, 2008 @08:39PM (#23564879) Homepage
      Unless you've gone through the hassle of buying (or attempted to buy) a house this wouldn't be very clear.

      Right now it is almost impossible to purchase a house using internet based tools. Every housing market is controlled by the local realtors and they are VERY territorial. This means extra calls to look at houses if you aren't using a local realtor, extra time spent researching because tools are intentionally crippled for non-local agents, houses that aren't "keyed" properly for non-local agents (meaning even if you've done your research, then had someone call on the house, you still might not be able to get in and see it).

      This makes it harder to find (and buy) a house if you aren't working with a local agent. Knowledge is power, and with current tools & rules the local agents wield a lot of power over non-local (internet) based ones.

      Time will tell if this ruling bears fruit, but it is definitely good news for any nerd looking to buy a house in the future.

      • Re:Great. (Score:5, Funny)

        by phoenixwade ( 997892 ) on Tuesday May 27, 2008 @09:25PM (#23565285)

        Unless you've gone through the hassle of buying (or attempted to buy) a house this wouldn't be very clear.
        Did you really just say that he will become relevant when he moves out of his parents house?

        That was very smooth!

      • If I'm reading your explanation, it's sounds like it was a good system for local businesses. I wonder how long it will now take for corporate Walmart realtors to pop up and run the independent operations out of business? You're going to help me out here with an explanation of why using a non-local realtor is ever a GOOD idea.

        BTW, I just bought a house last year and I had no issues with getting into any house I wanted within a few days.

    • Just wait until they discover "spam".... (Score:4, Insightful)

      by Joce640k ( 829181 ) on Wednesday May 28, 2008 @12:39AM (#23566759) Homepage
      Internet + sleazeballs. What could possibly go right?

  • A boon for the Real Estate Industry (Score:3, Insightful)

    by antirelic ( 1030688 ) on Tuesday May 27, 2008 @07:33PM (#23564233) Journal
    Protectionist policies usually only protect a handful of businesses. In the case of the Real Estate industry, a high cost to entry bars a lot of business from entering into the market without going into co-hoots with the "big brand" businesses. What this does is allow independent realtors to compete with the big boys, which will in essence force the big boys to be more competitive.

    The internet helps small businesses expand as fast as they can handle, and forces big business to stay competitive or lose business. This is really good for everyone. Not a perfect solution, but a good start. Now, if this would only happen for all industries...
  • When I saw "Monster Suit" I at first thought the article would be about realtors winning a suit against Monster Cable. What realtors would call themselves monsters?
  • I've heard the same realtor's ad on the radio here for a month now, and one of its catch-phrases at the end is "Only Realtors are members of the National Association of Realtors.".

    That always struck me as an "orly?" (/duh?) statement every time I heard their ad, but now reading this I wonder if they are trying to strengthen their "name brand" (NAR) so to speak since they are losing their lock-in? Since now merely looking for a Realtor doesn't necessarily mean they will get your business.

    • Re:recent advertising blitz? (Score:5, Informative)

      by TClevenger ( 252206 ) on Tuesday May 27, 2008 @07:54PM (#23564447)
      They actually have a trademark on the word "realtor", so you can't call yourself a realtor unless you belong to the NAR.

      Yes, it's ridiculous.

      • Registered trademark (Score:4, Informative)

        by wheatwilliams ( 605974 ) on Tuesday May 27, 2008 @08:20PM (#23564697) Homepage
        I don't think that part is ridiculous. There's a distinction between a real estate agent and a Realtor®. One is a person who has a license to sell real estate, and another is a person who pays dues to and is a member of the National Association of Realtors®. It's been that way for many decades, as far as I know.

        • Re: (Score:3, Informative)

          by morgan_greywolf ( 835522 ) *

          There's a distinction between a real estate agent and a Realtor®
          Yeah, that's because Realtors® are real estate brokers, whilst agents are just people that are licensed to work under a broker.

          Although, it's important to note that not all real estate brokers are Realtors®. Only NAR members are Realtors®

          BTW-- the word 'realtor' is just a made up word. There was no such work until NAR came along.

          • Re:Registered trademark (Score:4, Informative)

            by urbanrealtor ( 1295226 ) on Tuesday May 27, 2008 @09:24PM (#23565271)
            That's actually not accurate. Realtors are members of the NAR. It does not have a bearing on their level of licensing. I am a Realtor. I have a salesperson's license. My broker is also a Realtor. By the way, while it can be beneficial to have a trade association (like the NAR) for the purposes of constructing a fair and organized market (though that is really a subjective measure), lots of the "benefits" (eg: code of conduct, pledge of fairness, listing services) are either redundant with existing structures or not implemented in a helpful way.
          • Realtors are members of the NAR and you have to belong to the NAR to belong to the local MLS - while paying dues to the national and local RealtorTM associations. The whole purpose (from my point of view, of course) is to prevent licensed real estate agents who are not members from participating in the Multiple Listing Service. The MLS used to only be accessible by printout. Now it's available online locally or nationally but the "little guy" is still locked out of the MLS at least until this agreement. If
        • That "monster" settlement infringes on the trademarks of Monster Cable, Inc. [allheadlinenews.com]

      • Re: (Score:2, Insightful)

        by gujo-odori ( 473191 )
        Why, exactly, is that ridiculous? You can't call yourself a CCIE unless you actually are (well, you could, but you'd be open to getting sued by Cisco and by your clients as well), you can't call yourself and MCSE unless you actually are (well, you could, but you'd be open to getting sued by Microsoft and by your clients as well), you can't call yourself a Sun Certified Solaris admin unless you actually are (well, you could, but you get the idea...).

        And you can't call yourself a Realtor unless you actually

        • Re: (Score:3, Informative)

          by v1 ( 525388 )
          The fact that a brand has become so successful that
          many people informally but incorrectly use it to refer to anything in that generic class doesn't mean anything in that generic class should be allowed to call *itself* by that trademark.

          Actually if you let your term fall into generic everyday use without defending it you can lose it. Companies that are in danger of losing a trademark because if common use often mix in their company name in all their ads.

          Microsoft Office
          Kleenex Brand Tissues
          Ziploc Brand Zip

          • Re: (Score:2)

            by mcmonkey ( 96054 )

            BandAid brand Band-aids

            Actually, it's "Band-Aid Brand Adhesive Bandages". Do you have a citation for J&J ever using "Band-Aid Brand band-aids"?

            That sounds like an implicit admission your trade mark is now generic. The only reason they would need to specify "Band-Aid Brand band-aids" is if there were band-aids not of the Band-Aid brand.

      • Not only that, but as I recall from a website which does not exist anymore, they also prefer (maybe demand) it be spelled "REALTOR", complete with all caps. They even have a trademark out on the specific ALL CAPS spelling.

        Well, okay, the site I was thinking of (TimmyBigHands, where one of the writers mentions that his spellchecker "caught" him "misspelling" it in lowercase) ended, but there's a mention of the fact at hand on the obligatory Wikipedia article [wikipedia.org].

    • Re:recent advertising blitz? (Score:4, Insightful)

      by Anonymous Coward on Tuesday May 27, 2008 @08:00PM (#23564521)

      I've heard the same realtor's ad on the radio here for a month now, and one of its catch-phrases at the end is "Only Realtors are members of the National Association of Realtors.".

      That always struck me as an "orly?" (/duh?) statement every time I heard their ad, but now reading this I wonder if they are trying to strengthen their "name brand" (NAR) so to speak since they are losing their lock-in? Since now merely looking for a Realtor doesn't necessarily mean they will get your business.

      That's exactly what they're doing. You can almost hear the "(tm)" trademark and the ALL-CAPSness in the word "REALTOR". That's because it is a trademark, and it's NAR's trademark. The generic term is "real estate broker".

      Similar cases of trademark dilution have taken place in the past -- do you use a Xerox(tm) or a photocopier? Kleenex(tm) or facial tissue? Likewise, are you doing business with a REALTOR(tm) or just some random real estate broker?

      All of which is, as you've surmised, bullshit. Much like used car salesmen, real estate brokers are basically weasels. Because houses aren't identical, they can't be bought and sold like stocks, bonds, or even consumer electronics, so buying a house is more like buying a used car; people have to interact, in meatspace, if for no other reason than to inspect the property, and that invites a whole food chain of people whose only interest in the process is in getting a cut of your transaction.

      And as the president of the National Association of Weasels, we'd like to make sure that you do business with one of our WEASELS(tm). Only WEASELS(tm) are members of the National Association of Weasels. Would you risk your family's financial future with mere polecats, skunks, or other poor imitation? Demand professionalism! Settle for nothing less than genuine WEASEL(tm)!

      The trademark has worked well for NAW^HR, but this court case is the thin edge of a very big wedge. NAW's de facto monopoly over the WLS data broken, there'll no longer be any advantage to being a Genuine Weasel. Any old weasel can work within the same set of databases, which means that NAW will be denied the fat fees that only WEASELS pay...

    • Re: (Score:3, Informative)

      by gujo-odori ( 473191 )
      The way they phrase it (I'm a real estate licensee, in addition to my primary gig in IT) is awkward/duh, but what they mean is that Realtor is a registered trademark of the NAR, and that only members may call themselves a Realtor.

      What, you may ask, is the benefit of that? Basically, it comes down to your rights if an agent screws you over. If that agent is not a member of her/his $STATE Association of Realtors (and by extension, the NAR), you can file a complaint with your state's Real Estate Commissioner a

  • Won't change a thing (Score:3, Interesting)

    by Anonymous Coward on Tuesday May 27, 2008 @07:42PM (#23564341)
    "Real" realtors will still blacklist listings by online or DIY listings. Non local "real realtor" basically translates into negligible viewings.

    Obviously this is pathetic. I happen to have three realtors on my doorstep, and they sing the same song, claiming colleagues will do the same. You cannot break this kind of cartel when grassroots will practice it regardless.

    • Re:Won't change a thing (Score:5, Funny)

      by Vectronic ( 1221470 ) on Tuesday May 27, 2008 @08:00PM (#23564523)
      "I happen to have three realtors on my doorstep..."

      Shit, is this a new fad like pink flamingo's and garden gnomes?

      "...and they sing the same song..." Aww, a triplet, do they dance too? If I tickle the right ones tummy, does he give me the key to your house?

      Now I want realtors for my porch.
    • I think the barriers will be broken one way or another. Personally, I would love it if craigslist displaced MLS altogether. I think the overheads in buying and selling a home are insane, and way out of line with the technology. I would still hire a home inspector and a lawyer to make sure the legal formalities are addressed, but beyond that, it's all waste.

  • One anti-competative practice down, many to go. (Score:4, Insightful)

    by Original Replica ( 908688 ) on Tuesday May 27, 2008 @07:45PM (#23564361) Journal
    I'm glad to see anti-competative practice and brokers in the same sentence. I don't know if internet brokers are going to have any positive effect on the rental market in major cities though. Right now the only realistic way to get a new apartment in NYC is to pay a fee equivalent to 15% of the annual rent to a broker for the privilege of renting from the landlord who has given them the exclusive right to make the public aware of the apartment's availability. So that's easily $3600, just to be allowed to deal with the apartment management company. I once paid a broker's fee to someone who had an exclusive on all the apartments owned by the broker who shared an office with her. I was in the same room with the landlord, but I couldn't rent from him without paying her first. i would love to use capitalism properly and not give my money to brokers, but they control far to high a percentage of the real estate for that to be a viable option.

  • What about Realtors' conflicts of interests? (Score:5, Interesting)

    by whoever57 ( 658626 ) on Tuesday May 27, 2008 @08:04PM (#23564565) Journal
    Wake me when someone acts against real estate agents who are supposed to be representing the buyers stop getting commissions paid by the sellers. This is an obvious and massive conflict of interest.

    I saw an item on TV where agents were saying that sellers wanted to place their houses with agents on the basis that the buyer's agent got a larger commission. Now, why would they do that if they did not think it would influence the AGENT of the buyers? If the seller can influence the buyer's agent, there is something deeply wrong.

    Can someone explain to me how this obvious conflict of interest has persisted for so long?

    And before anyone tells me that a realtor is necessary -- I bought a house in the US (for several hundred thousand dollars) with no agents involved on either side of the deal.

    • Wake me when someone acts against real estate agents who are supposed to be representing the buyers stop getting commissions paid by the sellers. This is an obvious and massive conflict of interest.

      Real estate agents exist to match buyers and sellers. Technically, you both hire one -- and it's only a potential conflict of interest if your actual agent shows you a house she also acts as the seller's agent for.

      Which is why you may want to hire your own inspector and lawyer.

      And before anyone tells me that a realtor is necessary -- I bought a house in the US (for several hundred thousand dollars) with no agents involved on either side of the deal.

      I bought a T-Shirt without ever leaving my home. Are you saying Wal-Mart is unnecessary?

      • Re: (Score:3, Insightful)

        by Solandri ( 704621 )

        Wake me when someone acts against real estate agents who are supposed to be representing the buyers stop getting commissions paid by the sellers. This is an obvious and massive conflict of interest.

        Real estate agents exist to match buyers and sellers. Technically, you both hire one -- and it's only a potential conflict of interest if your actual agent shows you a house she also acts as the seller's agent for.

        And for this service of spending a few minutes on a computer matching their client's specificatio

        • Re: (Score:2)

          by genka ( 148122 )
          You forgot one thing- someone has to open doors to the prospective buyers. I agree that 6% is way too much to pay for such service.

    • Re:What about Realtors' conflicts of interests? (Score:5, Informative)

      by jmv ( 93421 ) on Tuesday May 27, 2008 @09:03PM (#23565087) Homepage
      It's a lot more than who pays who. One basic problem is that agents are paid on a percentage of the sale. Let's say a property is worth $500,000 and the commission is 3% to each agent (seller and buyer). The seller's agent knows that if he can get the seller to sell for $450k, he only loses 10% of his commission and he'll make the sale with nearly no effort. Hence, the interest of the seller's agent (in terms of pay/effort) is to make the seller accept any price even if it's low.

      On the buyer's side, it's even worse because if the buyer pays more, the agent gets more, so there's clearly no incentive for the buyer's agent to help his client bring the price down *if* the client is buying anyway. In the end, both agents' *only* interest is to get the property sold, no matter what the price and the interests of the clients. It's as simple as that.

      • So you're saying that one agent's self-interest is to push the asking price as low as possible, and the other's self-interest is to push the offered price as high as possible. That sounds like conflicting interests requiring negotiation that will wind up with a price in the middle that everyone accepts, which is exactly what you want.

        Now, honest agents who are working for their client's best-interests will also wind up on opposite sides, but they'll be on the same sides as their clients, unlike the dishon

        • Re: (Score:3, Insightful)

          by Pulzar ( 81031 )
          So you're saying that one agent's self-interest is to push the asking price as low as possible, and the other's self-interest is to push the offered price as high as possible. That sounds like conflicting interests requiring negotiation that will wind up with a price in the middle that everyone accepts, which is exactly what you want.

          That's not at all what he way saying... He was saying that they will both be looking to sell as quickly as possible and have no interest in getting the best deal for their clie

    • Can someone explain to me how this obvious conflict of interest has persisted for so long?
      Probably because commissions help make better salesmen, which help make the company richer, which drives down their overhead (but that's pretty negligible). That, and no-one really complains about it.
    • They do have 'buyers agents' that you can use now. They have their own association and you pay them a flat fee to act on your behalf. They end up being your expert during the RE transaction.

      Now, if you've gone through a buy or sell before you realize it's really not all that hard and start wondering wtf you need either a buyer or sellers agent. IMHO, selling is very easy. Just find a lawyer to draw up the papers and have the buyer's bank write you a bank check. Buying is a little more complicated since
      • A fixed price agent still isn't aligned with your interests - now that they have your money, their motivation is to get the whole thing over with ASAP.

    • Re: (Score:2)

      by SirKron ( 112214 )
      For example, before the advantageous use of computers, it was A LOT of work to compile an accurate Comparable Market Analysis of "like" homes sold in a neighborhood. My wife is a realtor and now for 90% of her inquiries it is a simple address input then "create PDF" on her company intranet. Additionally, marketing a property used to be a lot harder and more expensive. Pictures had to be developed, print media cost a lot of money, calls to someone in the next county were not free, and don't forget putting
    • Well the idea is the buyer agent commission is supposed to be an incentive to show the home. When I listed my home my agent told me, ok we can offer the other agent 3% or 4%, 4% is more expensive but will encourage more buyer agents to show off your home.

  • From the Trenches (Score:3, Informative)

    by LifesABeach ( 234436 ) on Tuesday May 27, 2008 @08:06PM (#23564589) Homepage
    From previous experience, any home in southern California for sale is not only on the MLS portal, but is also on someone's web site, usually the listing agent. I do not know of ANY listing agent that is going to tell anyone NOT to advertise their listing for free. Given the above, all it means is that the same address will get on the search engines more than once. The impact will be that other properties will be pushed down the list. I do not know if that is a win for the Seller, or Buyer, but this is going to be the outcome. There are going to be some legal problems about the listing, but I figure the folks that won the law suit already know how to side step it. Ya, I am a Realtor, if you have a question about homes ask me, my advice is always free.

    • Re:From the Trenches (Score:5, Insightful)

      by fredmosby ( 545378 ) on Tuesday May 27, 2008 @08:19PM (#23564689)
      Ya, I am a Realtor, if you have a question about homes ask me, my advice is always free.

      What exactly do realtors do? Why would I want to use a realtor to sell a home rather than listing the home myself, and what is the benefit of using a realtor to find a home rather than just looking through the listings myself?

      I'm not actually planning on buying a home any time soon, but I'd like to know. Usually I prefer researching major purchasing decisions myself, rather than trusting a salesperson.
      • IANAR, but from what I understand, you're paying for the advertising for the most part.

        You'll get much more traffic from potential purchasers with a realtor (ff spellcheck wants me to capitalize realtor. It also wants a space between 'spell' and 'check'). You also probably, but not definitely get someone who has a better concept of what you can reasonably get for the house. They can also show the house off to prospective buyers when you have somewhere else to be. I do know (anecdotally) though that you

        • Re: (Score:2, Informative)

          by Anonymous Coward

          IANAR, but from what I understand, you're paying for the advertising for the most part.

          No. If you have a good Realtor, you are paying to resolve conflict between the seller thinking the house is $400k, the buyer thinking it's $300k, and the seller getting all mad when offered $300k. When negotiations take place, it's the Realtors who actually keep sanity around and make the deal happen. Remember, someone is selling their home - not some xyz property. There's a lot of emotion involved. The Realtor also protects the minority. The seller has no clue who he is selling to till the closing table.

        • You also probably, but not definitely, get someone who has a better concept of what you can reasonably get for the house

          Most counties have property records online; or another pay for service has the information cheaper than 6% of property value. I just entered "%%% foobar dr" into my county appraisal district; and listed the sale/appraisal of 57 residences on my street. No realtor required. Previous to the Internet, it was more effective to pay a realtor and their support structure to obtain this informatio

          • You still need (and will, for the foreseeable future) a real appraiser. Looking up neighborhood appraisals online can give you a ballpark figure, but it can't account for the specifics of your house. What condition is it in? How big is the kitchen/yard? What work have you done? And a million other questions to ask.

            They'll also tell you something slightly different than an appraisal: What they think someone will pay for it.

        • Re: (Score:2)

          by Skim123 ( 3322 )

          I've never sold a house, but I have purchased one. And from what I remember there were many forms and processes: house inspections, termite inspections, title insurance, setting up an escrow account, walk throughs, and more. As a first time home buyer or seller, I imagine the deluge of paperwork can be intimidating. You might worry that you're forgetting a critical document. Perhaps it's not such a big deal if the buyer has an agent/Realtor, but if both of you are first timers and both are trying to do this

      • Re:From the Trenches (Score:5, Informative)

        by DougWebb ( 178910 ) on Tuesday May 27, 2008 @08:59PM (#23565047) Homepage

        My wife is a Real Estate agent (not a broker; there's a difference) and there is a ton of work she does for her listing clients, often including spending hundreds of dollars of her own money, sometimes over a thousand, to pay for preparing the house for sale and marketing the home. I've also donated many hours of my own time ripping out old carpeting, taking down wallpaper, painting, and doing various light carpentry jobs for her clients.

        Her clients also get her experience. I've seen a number of For Sale By Owner homes, and they never look as nice as my wifes listings. People just don't realize that you have to clean your home and make repairs before you try to sell it. Otherwise, it looks like run-down junk, and buyers will treat it accordingly. First impressions are everything, and you need an agent who knows what to spend money on and how much to spend, so that you get the best return on your last-minute fix-up dollar.

        All of that is before the house even goes on the market. Once it's on, there are endless phone calls, viewing arrangements, and follow-ups that have to be performed; it's definitely a full-time job. Once an offer is negotiated and accepted, there's even more phone calls and work to do meeting with inspectors, dealing with lawyers, and making sure the deal doesn't fall through. It's just a steady stream of work, and if you've already got a job, you don't want to do the agent's job too.

        Finally, all of the buyers know that you're not working with an agent, and since they're probably selling their home as well, they know just how much you're saving. 99% of the time they'll deduct that amount from what they would otherwise offer you, figuring that you wouldn't have gotten the money anyway, and why should you get a free ride? It can't be for your time; agents don't do anything, right?

        • Her clients also get her experience. I've seen a number of For Sale By Owner homes, and they never look as nice as my wifes listings. People just don't realize that you have to clean your home and make repairs before you try to sell it. Otherwise, it looks like run-down junk, and buyers will treat it accordingly. First impressions are everything, and you need an agent who knows what to spend money on and how much to spend, so that you get the best return on your last-minute fix-up dollar.

          This is just common
          • You may not need to be told to cleanup your house for sale, but you'd be surprised at how many do need to be told. And how many more need to have the work done for them.

          • Re: (Score:2)

            by Skapare ( 16644 )

            ... because the $50 listing on housetrader.com isn't very far away into the future.

            What a worthless site.

          • You'd be surprised how many people don't get it, and how many people are happy to pay her 3% (the buyer's agent gets the other 3%, and both agents pay a big chunk of their 3% to their brokers and the IRS) to have her take care of hiring the cleaners and stagers to take care of cleaning up the house.

        • Working hard does not entitle someone to a percentage, especially $10-20+K per sale.

          • A good agent will put in a lot more work, including fronting a lot of the preparation and marketing expenses, for a higher priced home. For example, when a house first goes on the market, there is an Open House held just for agents and brokers. Top level agents listing high-end homes will often pay a caterer hundreds of dollars for this open house, just to draw in as much attention from other agents and brokers as possible. This spreads knowledge about the house that you can't get through an online ad, and

        • Re: (Score:2)

          by bataras ( 169548 )
          I own a house and want to do the following when I sell it:

          a) list it on MLS for 500k$
          b) do it for sale by owner
          c) only pay 3k$ to a buyer's agent who is doing little more than bringing a buyer to me

          How do I:

          a) get it on MLS, the defacto system for communicating listings to all local agents without being extorted 15k$ (3% promise to buyer agent)
          b) not get blacklisted by every agent in town for offering -only- 3k$ (0.6%) to a buyer agent

          How do we stop MLS from being a Multiple blackListing Service?

      • Re: (Score:2)

        by cheebie ( 459397 )
        Here's a reply from a non-realtor who once tried to sell a house, then gave up and had a realtor do it. You get . . .
        1. Your house listed in the MLS that all the local realtors are looking at. This is where a LOT of people are looking for houses.
        2. Someone to show the house off in a professional manner. A good realtor know how to emphasize the good parts, and downplay the flaws, while not violating due disclosure laws.
        3. Someone to be there when the potential buyer wants to see the house. Never underestimate
        • 1) I think it depends on how old you are and how old the area is that you are buying/selling in. The younger the area, the less important an MLS listing is. I also think sites are going to start popping up that are similar to autotrader.

          2) Clean the house up and let people look. I've looked at houses and hate when some realtor is standing over me. If I have any questions, I the buyers have always been in the best position to answer.

          3) This is going to be true with anything you sell. I've managed to sel
      • What exactly do realtors do?

        . Provide (supposedly) an unbiased opinion on your home as to the proper selling price, what must be done before placing it on the market, what should be done to bring the highest selling price at the least cost, and showing the property for you.

        Why would I want to use a realtor to sell a home rather than listing the home myself

        Because real estate law is complex, varies from state to state, and without an agent (absent this ruling) you had no access to MLS services.

        and w

  • HUH ????? (Score:2, Interesting)

    by sciop101 ( 583286 )
    I do not understand the point of this.

    Were on-line realtors outselling people standing in the property?

    Was the internet better for buyer/seller?

    Did the online agent get a better commission?

    I thought real estate agents were all about follow the money$$$?

  • I was confused, thinking it was a settlement from a lawsuit brought by Monster, as they have continued [crunchgear.com] to launch Cease and Desist [monstervintage.com] threats and lawsuits against companies with little to do with their audio wire and cable product business, even though they themselves claim they dont [audioholics.com]...

    tm

  • It must be said... (Score:4, Funny)

    by chill ( 34294 ) on Tuesday May 27, 2008 @08:46PM (#23564939) Journal
    Welcome to the 21st Century, Century 21.

  • Texas and NAR (Score:3, Interesting)

    by 787style ( 816008 ) on Tuesday May 27, 2008 @09:02PM (#23565071)
    Someone I work with buys and rents out houses as a side hobby, and in an attempt to save money is on her way to get her brokers license. Along the way she needs her agent license, which is being refused to be given to her until she joins the Texas NAR.
  • You heard me right. Realtors are going the way of the dinosaur. I am already seeing it happen.

    Consider, anyone in my generation (20-30 years old) who is looking for a new home. What is the very *FIRST* thing you do when you are even considering it? Do you call an agent? No. You go to the web. You look on Facebook, on Cragislist, on Google even, and yes, MLS too. but the only reason you go to MLS is because it is on the web to begin with! Consider now, if you are selling a house and aiming for this market.

    • Why would you pay someone 2.5%-5% commission to list on just one of many websites, when all others are free? Why not try it with the other sites first?

      You mean like eBay? So, why doesn't everyone just use CriagsList.org?

      ...all an agent really does is bring bodies in the door. If you can get the bodies in the door via your own means there is no reason to pay for an agent.

      You just answered your own question.

  • I actually work for a MLS vendor that supplies a MLS solution to these aforementioned real estate broker companies. I wonder how this will affect our business. It seems to me that with the Internet-based brokerage companies out there, it would enable more expertise to enter the MLS business.

  • first off, here's the actual proposed final judgement that actually came out today [usdoj.gov], the actual news part of this, as the links above seem a few months old.

    secondly, both the submitter and the linked article seem to have absolutely no clue as to what this settlement means. it is in no way about 'enchancing competition' or 'opening up the industry'. it merely clarifies rules that allow brokerages to limit this data.

    specifically, this has to do with VOW (Virtual Office Website) data. if you don't know a

  • Probably won't help much (Score:4, Informative)

    by Trailer Trash ( 60756 ) on Tuesday May 27, 2008 @09:55PM (#23565551) Homepage
    Here in TN, the NAR just bought a piece of legislation making it illegal (you read that right: illegal) to give a purchaser a rebate. They have a lot of power, and they'll use it.
  • At least that's what I thought when I read the headline.
  • When I go to sell my house, I will not be doing "For Sale By Owner". When I go to purchase my next house, I will be calling a realtor to help me find it.

    The Realtor that helped me buy my first house was invaluable in walking me through a process I had never been through before. All the forms to fill out, what to look for when looking at the house, what the next steps are, etc. etc.

    I wonder how many of the people saying "I don't need a realtor" have actually been through the home buying process. I wouldn'

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