patrick.net

MLS is by everyones opinion here going to be obsolete in its form. That is not a monopoly or deadweight, it is the normal industry/product life cycle. It was great for a few decades, now the Internet is destroying it. It’s natural.

That does not preclude economic dead weight. By your definition centrally planned economies which boom for 15 years, suck the life blood out of a continent for 35 more years, then decay into anarchistic capitalism contain no dead weight either.

Malcom,

Where you, you're fully paid off home and considerable credentials are going to be sorely let down is that ultimately the MLS WILL be dismantled. Yes, dismantled. It'll take time but watch, you'll see.

NO other industry has such a direct interface (and influence over) non-combatants (rank and file consumers). Drawing a parallel as to how commodity producers treat each other and how the NAR lines up people that only want buy a house for their "bi-annual sheering" is pointless.

Seriously man, your logic is so flawed.... I don't know WHAT to do with you. I can't wait for your book to come out, so I can set it next to the crapper.

Randy, the main problem I'm having with the slightly differing POVs here is that (deadloss/excess profit) whatever concept, that you think you can go from industry to industry and declare that they have an excessive revenue stream. That is just fundamentally different from how I look at things. Who is to determine what a normal margin is? I said it earlier 6% is no longer the norm, not here in SD anyway. When a house cost 100K, 6K in realtor selling costs might be reasonable; the market has changed because 6% of 800K seems excessive. But it is not what I think is excessive that matters, it is the market.

I made gains which even I think were excessive but many times I had multiple bidders who couldn't wait to run head first into a brick wall. That is the dynamic of a free market, a willing seller, a willing buyer. They don't have to be happy just willing.

DINO, I agree that it will dismantle itself, what's your problem?

My logic isn't flawed, you just need to learn that there is more to an issue than just what a JBR thinks is fair.

Peter P is a jerk. Just kidding, he is so damn likeable that someone had to say it.

Hi_there,

This all started when Malcom "took offense" to NAR being described as a monopoly but thanks for the Monday Morning Quaterback ctrique!

By_there :)

Oh Dino, now you're going to speak for me. "He started it!"

"Peter P is my favorite. He is the most practical guy around here."

Why? Do you sell sushi?

I'm happy to see free markets flourish. I don't want the government picking winners and losers. Malcolm you're switching contexts in the debate arbitrarily. We've now switched from a legal/economic discussion to a practical/ideological one.

I'll revert back to my practical question (no jargon added):

Is it fair that the MLS boards force members to sign an exclusivity agreement that prevents them from using any competing services?

If that's ok then there sure are a whole lot of companies out there missing some spectacular "excess" profit potential.

"Is it fair that the MLS boards force members to sign an exclusivity agreement that prevents them from using any competing services?"

I have no idea. What competing services do you mean?

It would seem like a bad long term business decision to me, but what do I know?

Oh come on Malcolm. It's an honest question. The competing services are those you keep telling us will make all this moot.

The MLS Boards put member agents in jeopardy by forcing them to "marry the MLS" and ne'er lay eyes on anything else. Misbehaving agents are kicked out of the "membership", which is after all just a big club. Are there any barriers to honest competition in that system?

Malcom,

I'm *not a JBR. I'm a bubble-sitter. There's a difference. While CA might prove to be a bit of a challenge there's no community in OR I couldn't well afford to buy in to. I chose not to.

They say there's at least "some" truth behind every sterotype and with as much as we're seeing "the fee driven abusive mortgage broker" being played out in real time for all to see I just find it hard to believe that anyone would (or should) rush to any REIC member's side?

Since it's now obvious to anyone following that NAR/MLS "is" a monoploy you've quietly abandoned that saying technology alone will provide the disintermediation? Why didn't you just fess' up earlier and save a lot of trouble?

Randy, this is not arguing objectively because to form your argument it would be more compelling if you could actually cite the clause, then I can read it and give my opinion.

Honestly, if I went down that path there are so many industries you would have a problem with, that you would literally rethink some very basic foundations.

Such as? For most consumers, the difference between paying a 6% commission and a 2% commission is far greater than the TOTAL SPENDING for most other categories.

Malcolm, I've been enjoying the debate between you and Randy, but in my opinion his points are more compelling, largely due to superior organization and debating skills. I would like to see you outline your position in the way he has (and not in one sentence either). Present him with a set of falsifiable tests as he has to you. Until then, you haven't convinced this lurker.

By the way, is this lawsuit spurious?

http://www.realestatejournal.com/buysell/agentsandbrokers/20050511-hagerty.html?refresh=on

By the way, I fully agree that dead weight is a critical issue. Other than supply and demand, it is the most vivid and useful concept I remember from my undergrad econ minor.

I challenged the initial premise that all monopolies were illegal, and questioned how a tradegroup is a monopoly? I questioned if you actually knew what a monopoly was because it seemed to me that you were using the term for shock value.

JBR is just a term and not meant to anyone personally. It is used third party with me because it denotes a mindset. No offense intended, though claiming to be bubble sitting is basically telling everyone that you want to be a property owner.

Clause = Craigslist.

Some (but not all) MLS board agreements establish grounds whereby the member advertising a home on Craigslist is in violation of their Terms of Use (ToS) and can be removed from the membership and denied rights to access and utilize the MLS.

Clause = Zillow's new buyer&seller market making thingy. Agents attempting to use this will most often find themselves in violation of their MLS board agreement.

Clause = OpenMls.com

(Note, the last in that list is soon to embrace Second Life "virtual real estate" listings. So, they're damned to failure anyway and agents participating there deserve whatever punishment they get.)

Well... partially true. I own several properties, here and abroad but do not currently own my primary residence. One day, when this market runs it's course, reverts to the mean (and seriously cleans up it's act) I'll own my primary residence (again).

In the meantime I live quite comfortably (and bank the difference) thank you.

Here's another article:

http://money.cnn.com/2005/10/26/real_estate/buying_selling/real_estate_waste/

Some excerpts:

As a result, says Susan Creighton, the director of the Bureau of Competition for the FTC, traditional brokers try to maintain an advantage over Internet-based brokers, fee-for-service providers, and discount brokers that threaten to undermine high commission rates.

* Seek legislative actions to restrain trade. One panelist, Steve DelBianco, of executive director of NetChoice Coalition, pointed out traditional brokers are not reluctant to seek legislative relief to protect their interests.

I think Randy is a fine debater, I just have a different perspective. I addressed all of his and DINO's points, I don't know what else you would have me do Boston.

I agree with all of it, it is unfair, NAR is a propaganda machine, I agree with it all, but that doesn't mean that they are any different than any other trade group, and they have a right to their proprietary systems.

I have given plenty of first hand proof that they can try in futility to set 6% as the norm but the free market is just to powerful a force.

I haven't seen one point that I disagreed with stick or seem compelling. Sorry.

Clause = Google real estate, when they open up that API and folks start getting creative about how to end run MLS.

Hi_there,

I'll deal with you later.

What's strange to me is Malcolm's attempt to defend these kind of practices with the argument "that's how business works". Yes, that's how business works. But the way the Justice Department works is to end these anti-competitive behaviours. From a societal point of view, you should be rooting for the Justice Department, not the NAR. This will lead to greater efficiencies for the consumer (by eliminating the dead weight Randy refers to).

Randy,
If the clause really says that listing on other engines violates TOS, it would seem wrong to me.

Boston, I believe that our system flawed and all is better than most places so even if it means presenting a point of view that may seem aligned with NAR and distasteful I can only offer my knowledge to pool with others. I will not though judge a system because I don't like the prices they charge.

Realtors list on MLS and in newspapers routinely that is why I requested clarification.

Boston Transplant,

Yeah uh, great article but until Aaron Farmer makes a victorious court appearance that's all just a bunch of anecdotal gobbledy-gook, right.

Knee capping is always "anecdotal" (until they're yours).

Randy is a great factual debater. I admire him for that.

Malcolm

I'm sorry, I thought you meant the formative clause of my argument, not the verbiage from an agreement.

It's business. Sorry if commerce seems unfair, but people challenging an industry who in my opinion is just operating like anything else should be challenged. I believe that it should be a burden to get the government to unravel an industry, you don't want it so easy that every whiner gets reform laws passed.

MLS, the Canadian perspective.

http://www.thestar.com/Business/article/201219

Malcom, I will concede that anecdotal evidence gets thrown in there, but clearly it has enough merit for the justice department to get involved, per my first article. Does anyone know what the outcome of that lawsuit was?

Malcolm,

Just curious --why do you call DinOR "Dino"? Every time I see that, I think of a certain Stone Age reptilian cartoon pet.

FTC Action, 2006

Demonstrates the type of clause to which I was referring, and the fact that local MLS boards have indeed been found guilty in courts.

MLS agreements can be found on the internet, but you'll note that pretty much all of these are posted in violation of copyright, which the boards hold close to the vest.

July 13, 2006
FTC Charges Austin Board of Realtors with Illegally Restraining Competition
Board of Realtors Required to Eliminate 2005 Rule Blocking Internet Searches for Non-Traditional, Low-Cost Brokerage Properties

The Federal Trade Commission today charged the Austin Board of Realtors with violating the antitrust laws by effectively preventing consumers with real estate listing agreements for potentially lower-cost unbundled brokerage services from marketing their listings on important public Web sites. In settling the charges, ABOR is prohibited from adopting or enforcing any rule that treats one type of real estate listing agreement more advantageously than any other listing type, and from interfering with the ability of its members to enter into any kind of lawful listing agreement with home sellers.

I don't know, that's just how my mind read his name.