Request for Comments "Real Estate Workshop" #00052

Submission Number:
00052
Commenter:
Douglas Miller
Organization:
Consumer Advocates in American Real Estate
State:
Minnesota
Initiative Name:
Request for Comments "Real Estate Workshop"
Please read our attached letter with cites and deeper analysis. CAARE is the only non-profit public charity in the country dedicated to consumer protection in the real estate brokerage industry. Also, please do not give credence to the comments from ARELLO. ARELLO is the organization that supposedly represents all the state real estate licensing regulators in the country. However, like most state regulators, the president of ARELLO is a Realtor. He fails to disclose this to you. The Realtor Association is the largest single industry lobby spender in the U.S. The only bigger spender is a conglomerate - the U.S. Chamber of Commerce. The Realtors owned our last election, they practically hand pick their own regulators and they write their own laws. For example, they have legalized things like dual agency just for Realtors. Dual agency is illegal and considered to be fraud in every other fiduciary profession. They even severely influence the media - they are typically the largest advertisers. Realtors have not used their enormous power for good. If the Realtor cartel (Stephen Brobeck of the Consumer Federation of America was the first to call them out) were gone tomorrow, consumers would not be harmed. They would benefit directly. Every job that Realtors do can be done better by other more highly trained professionals for far less money. If the Realtors and MLSs were gone, so would all the price fixing schemes and consumers would save tens of billions of dollars every year. Why do listing brokers control how much buyer brokers are paid? Why have Realtor Associations throughout the country made it impossible for buyers to pay their own brokers? Could it be that if they did, most people would forgo using Realtors to buy homes? Could it be that if they did, real estate commissions would halve? Most people find the house they want to buy on the internet without a Realtor, yet most people are forced to pay for a buyer broker whether they want one or not. The listing contracts ALL put listing brokers in control over how much is paid to buyer brokers. They also allow the listing broker to keep the entire fee if they don't share their fee. The result is that listing brokers spend more time trying to keep buyers out of the houses they're marketing so that they can get a double commission. It is why some companies refuse to submit their clients' listings to Zillow, Trulia and Realtor.com and why there are pocket listings and coming soon listings. Realtors are in the business of betraying their clients for profit. We have seen lots of fee innovation on the listing side of homes. However, you will note that none of the MLS or Realtor commentators have talked about why there is NO fee innovation on buyer brokerage fees. That's because the buyer brokerage fees are price fixed and the Realtor Associations facilitate the price fixing through their forms, rules and MLSs. We cite the DOJ's rebate page that shows 11 states that have made it illegal to negotiate buyer broker fees. You have a huge job ahead of you if you plan to clean up the anti-competitive practices that identify with the name Realtor. For starters: 1. Prohibit listing brokers controlling the buyer broker commission. 2. Require buyers to pay for their own broker, except by buyer request. 3. Prohibit MLSs from concealing how much is being offered to buyer brokers. 4. Prohibit MLSs from offering money to buyer brokers and instead, if any money is to be offered, require them to offer it directly to the buyers and let the buyers negotiate with their buyer brokers. 5. Prohibit buyer brokers collecting their fees from anyone except the buyer. 6. Prohibit standard form fee agreements that are drafted by competitors. 7. Prohibit affiliated business arrangements for ancillary services. CAARE is here to help residential real estate consumers. Please let us know how we can help you bring competition back to this corrupt industry. Thank you. Douglas R. Miller