patrick.net

On previous threads we've talked about what happens when agents try to block or boycott. They lose their value. That's why now you see ads for companies promising to show ALL houses regardless of who lists them. You can't stay in business very long if you don't change with the times.

Malcolm

Are you really arguing that an industry group should be allowed to capture economic benefits for themselves at the expense of consumers? That is precisely what is happening, economically. It's an intermediate level undergraduate econ textbook example of a "dead loss" scenario.

The reason we have free market competition rules is to eliminate dead loss. The existence of dead loss harms both the consumers (who pay higher prices) and the overall economy (inefficiency).

You seem to like parallels. Can you show me any other examples of *transactional* monopolies which have been (a) not regulated and (b) found legal?

Malcom,

Illegal? Abusive? What level of abuse are we going to allow ourselves to be subjected to before "we" make it illegal? (If it isn't already)

It's hardly just "me" that wants a new game Mac. Just b/c you're not actively blogging and actually paid the 6%er's doesn't mean you necessarily like or appreciate it. Let alone see the value. Many are questioning "the value".

Before you jump at the chance to say I'm hopping from topic to topic, in the end, ALL of this is about commissions. It's the very reason the cartel exists. Like SP says, everybody profits from the transaction but the buyer is the only guy bringing any money to the party. It's time he had a say.

That's the part of anti trust that I would agree applies Randy. Whether Realtor associations have so much control of the market that they illegally crush competing innovations. With all my own observations, experiences, and readings I just end up with a different conclusion. The discount brokers are evidence that price fixing doesn't work, the argument of minimum standards of service fails because it would be done through law so it would have to be legal if it is lawful, and I respect proprietary tools. You can't force Coke to tell you their formula because you WANT to sell soda. (not referring to FDA ingredient list)

DINO, finally the true motive, you think they cost too much. I wish I could bandstand everytime I think something is too expensive. You're are still wrong, I can cite personal and plenty of other 1st hand accounts of people not paying 6%.

In a free market you always question the value, that is your RIGHT as a buyer. A seller has a RIGHT to charge whatever they can get. Not pretty, not always equitable but that is the system, and again, I'm not going to call for it to be dismantled because others won't shop around or act like real free market consumers.

Malcom,

I agree that MLS isn't a legal monopoly. I think the NAR has been a virtual defacto monopoly, in that they pull 95% of the business, as it's much harder to do business as an independant real estate agent than as a NAR member. I also believe that there are some Realtors and branches of NAR that think it ought to be a full monopoly and try and make it so. I also believe that after they invented it "hey! Awesome! This makes our job easier!" they realized that it marginalized a large portion of their defacto (not legal) monopoly. So naturally they want to keep it in house. Unfortunately for them, the 'tech' is so absurdly easy to replicate these days that it's only a matter of time before they cave in and offer free access to the MLS if only to try and keep it being the #1 tool. If Zillow ever quits sucking ass in usability (I can never get a search to work during business hours) it demonstrates a tool with far MORE functionality than the simple MLS.

Market forces created the NAR and MLS system. People used to mainly move inside their own town, or possibly one or two towns over. The local real estate agent knew what was on the market, and knew bob over in Closertoyouville and would be happy to call over there and get you connected if you were moving down the road. With a massive increase in mobility, it was much easier to get buyers to houses outside their own neighborhood with a centralized repository. When it was on paper, you almost NEEDED the NAR. MLS changed that, even if it has taken years for people to really see that. Going back to fully independant and local real estate agents would be entirely feasible now that you don't need an unbrella organization to disseminate information. Moving from Maine to Nebraska? No problem. Your local real estate agent can help you pick out a bunch of homes, call the listing agents, get specifics, and you fly out and, check out your choices, buy it. You can even have closing on the original house in another state as part of the closing agreement.

The NAR's de facto (not legal) monopoly is already broken, they just don't want to admit it. There will be kicking and screaming as they go down, and eventually they will accept it and move to be more inclusive so that they stay relevant. At least if they're smart they will.

"The free market worked, the houses sold for asking price and those exclusive agents were left holding their dicks."

Monopoly or not, I do not think the MLS in its current form will last long. In a rising market, the sellers did not care about the commission, as long as they got a profit on the sale. This is the same mentality as the "tax refund" imbeciles. But in a steady or declining market, when the seller sees that his house sold for what he paid for it, but he must write a check of $35,000 or more just to cover the sales commission, the miopic "gotta list with an agent" mentality will disappear. Maybe we will get fee based appointment maker/showers and new forms of independent sales databases. You could visit the database on-line (or at kiosk), make appointments, and drive yourself to the properties.

Malcolm

Now you're using straw men.

Coke's formulae are trade secrets. Any other company is allowed to do their best to replicate the results, and even to reverse engineer within limits of established common knowledge.

What is a proprietary trade secret about MLS? Am I to believe that I cannot replicate their database structure? Their screens? Their report formats?

Rather, Zillow's estimation formulae may well be a trade secret. They cannot and should not be forced to reveal that. I'll tell you what. I'll agree that MLS shouldn't have to reveal their "search algorithms". You and I both know those aren't worth squat.

Malcolm and crue-
I asked a former Ebay employee why Ebay didnt get into Real Estate as deep as they could. The answer was, many states require a certified represenative in the state to conduct business. I suspect this was put into place when interstate banking regulation was being rewritten and powers to be in each state wanted to maintain control over markets.
If we had Fed Deregulation this would assist in breaking down barriers.

Since Ebay isnt a Realtor firm they are excluded from conducting such business on mass scale in California. Actually I think they are a Delware company.

Randy you are questioning basic economic theory of excess profits. Economic theory states they are temporary so now we are discussing freshman college stuff. Anyway I won't be baited with YOUR criteria since I don't see realtors as monopolies why would I strain to fabricate a concept of transactional monopolies to make a point I don't even want to make?

In fact, the Supreme Court *just* ruled in a case which may serve to deny states wide regulatory powers over mortgage financing and more basic real estate transaction services. The Supremes seem to believe this power falls within the Federal Govt's domain.

Now whether that's good or bad in this context is yet to be seen. Depends how much control one believes the NAR has over Congress.

BTW Realtors are regulated so why does the criteria have to be unregulated transactional monopolies. Ebay btw is classic since it attempts to block transactions outside of itself but our system understands that IP is necessary for a business to fairly protect its revenue. Ebay is an auction site, not a networking site.

SFBB,

If you're like me I kind of cringed when the realtwhores basically "stormed" Craigslist. For a very brief period sellers seeking alternatives found a little haven. They were able to peddle their wares (for cheap) on C/L without having to compete with an advertising juggernaut like NAR.

Well NAR wasn't having ANY of it. They quickly flooded it with SO MANY listings finding the actual FSBO's was like finding a needle in a haystack! I s_u_p_p_o_s_e some would argue that this is just another example of "free markets" in action but to me it's the equivelant of Safeway plunking down in the middle of the "farmer's market"? Uh...? Is this what Craig intended?

Malcolm

No. I am not talking about excess profits. I am talking about dead loss. I don't know where you went to school but it must have rocked if you covered dead loss as freshman 101 econ.

Dead loss can be a permanent fixture in a non-competitive market. Thus, the terms "dead loss".

Just see SFbubble's post, I can't say it any better.

"What the NAR does is more like price fixing than anything else"

SF, they do it everyday with fake bids creating artificially high prices.
If we had an open auction where all bidders MUST be present and
a true open bidding process is conducted, then we could eliminate
any and all price fixing. This would also eliminate any sticky prices
and todays sellers would face immediate market moves. Gone would
be.. "my castle is worth a million pounds of gold." Sorry Charlie! Aint gonna happen.

No, and I wouldn't and don't take offense to the question.

SP - that could be taxable? Im not sure, my knowledge on Personal Taxes is limited. But is sure smells like ordinary income (boot).

Space, it used to be rare for bidding wars to occur. Normal markets are a buyer and seller negotiating, we don't need more laws or systems to make sure that everyone. ..............

Malcolm-
Agreed, more deregulation may be the answer.

Why can't people in this country just say no? If the price makes it so the deal is not attractive don't do it. Don't go running around looking for someone to legislate or a court to force the deal to your terms.

We just did a whole thread devoted to pocket listings and feigned bidding wars so whatever "regulation" realtors fall under, it needs a serious going over.

(It does make for some lively debate though)

We are just saying NO!

Bubble blogs are a buyer's strike water cooler. Uh! Excuse me, some of us here are actually thirsty (elbows way to front)

OMG, nothing but love btw, but DINO you just sat there, and made all of these points about MLS being monopolistic because no one can comptete with it, and it does all of this and that, and then you bring up the subject of pocket listings, where the agent on his own chooses not to use the tool because of an economic benefit.

This blog is great, this is actually the first message board that I've actively posted to.

How do you tax a mini-valise containing $250K in currency notes that the buyer hands to the seller as partial, un-recorded consideration?

Don't currency notes have embedded GPS chips?

"Can you show me any other examples of *transactional* monopolies which have been (a) not regulated and (b) found legal? "

Again. The National Football League

Malcom,

As usual, you're missing the point. It's this ENTIRE CULTURE of entitlement where NAR sees the buyer as nothing more than a necessary evil. The culmination of which is the "ultimate realtwhore circle jerk-fest" where properties are flipped back and forth amongst various straw buyers (complete with appraise-whore/lender collusion) where it takes the D.A a year and a half to figure out who was s@cking who off.

Sea World

Missing the point? I don't even see a point in that last post.

This blog is great, this is actually the first message board that I’ve actively posted to.

Same here. Ben's blog is too informative. No one will talk about sushi.

Now the speculative bubble was some giant conspiracty of the realtors?

:) or cake.

You do realize entire culture of entitlement is a paradox.

Like saying they are all monopolies.

But it has to be from a JBR point of view, truly successful people can keep their silly opinions to themselves.

We like to inform, persuade, AND entertain.

Yep. We have sophistry and post-modernism. :) We also have excellent data and analysis from Randy.

Malcom,

Help Me, Help YOU! O.K?

NAR/MLS/REIC very quickly indoctrinates "rookies" into the "finer points" of being a realtwhore. USE the MLS when it suits your/our needs, circumvent (and SCREW the client) when double dipping is in order!

This infraction (if caught) carries some pretty stiff penalties, as much as five HUNDRED dollars! Pffft (I just got both ends for a total of 60k?) I think I can swing a $500 fine. Now you're trying to tell us these assclowns should be allowed to "self-regulate". That they should be trusted to run MLS in an ethical fashion? You're kidding, right?

Out of curiosity, which blog is the "ben's blog" y'all are referrin' to?

Yes, they will go out of business much qucker if you let them hang themselves. If you don't trust your realtor don't use him/her.