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177
zzyzzx
2024 Apr 1, 11:15am
zzyzzx
2024 Apr 1, 11:15am
https://www.reddit.com/r/FirstTimeHomeBuyer/comments/1bs0ul7/realtor_is_dragging_his_feet/
Realtor is dragging his feet
Realtor is dragging his feet
178
zzyzzx
2024 Apr 9, 11:43am
zzyzzx
2024 Apr 9, 11:43am
WSJ Opinion: The Realtors Still Need Market Reform
Despite a recent lawsuit settlement, the cartel keeps home prices high and damages the economy. REX founder Jack Ryan wants federal antitrust action.
By Allysia Finley
April 5, 2024 3:12 pm ET
Ask a Democrat to name the most powerful business lobby in Washington, and he might say the pharmaceutical or fossil fuel industry. A Republican might respond the climate lobby. Jack Ryan says the real answer is the trade group both parties are too intimidated to cite.
“People in Congress are terrified of the Realtors, because they probably have 10,000 in their district, and a lot of them make a lot of money,” says Mr. Ryan, 64, who is a real-estate entrepreneur but not a Realtor. The latter term is a registered trademark of the National Association of Realtors; nonmembers who use it risk an infringement suit. Realtors “work the PTA, the football games, the churches, the synagogue,” Mr. Ryan says. Little wonder the cartel’s rules, which hurt home buyers and sellers alike, have gone unchallenged in Congress.
Not so in court. The NAR has been hit by class-action claims across the country over a rule that requires seller agents to make a blanket offer of compensation to buyer brokers as a condition for listing a home on an affiliated multiple-listing service, a database of homes for sale. On March 15, the NAR settled the claims by agreeing to scrap the rule and pay $418 million to compensate sellers.
In Mr. Ryan’s view, the settlement is more a tactical retreat by the NAR than a victory for home buyers and sellers. The legal battle against the cartel is far from over.
Mr. Ryan likens himself to King David in describing his yearslong fight against the NAR—a somewhat incongruous metaphor given that, while not as tall as Goliath, Mr. Ryan stands 6-foot-4. After nearly two decades as a Goldman Sachs investment banker, in 2000 he went to teach at an all-boys Catholic school on Chicago’s south side—an effort, he says, to put his God-given talents to good use. In 2004 he won the Republican nomination to face Senate candidate Barack Obama, but he withdrew from the campaign after records from his 1999 custody dispute with his ex-wife were released to the public.
In 2015 he founded REX, a real-estate service company that aims to buy and sell homes outside the Realtors’ system—bypassing broker commissions that have averaged 5.5% to 6% for decades even as transaction fees in other industries have plunged thanks to innovation and competition.
“Why is it that every middleman’s fees are down but residential real estate fees?” he says. “And why is it always the same fee whether it’s a $300,000 home, a $3 million home or a $30 million home? And why is it the same if it’s a hot market or a cold market? And why is it that a first-year associate charges 5.5% and the 30-year grizzled vet who’s done 500 transactions charges 5.5%?” In most other developed countries, few buyers use brokers and overall commissions run in the neighborhood of 2%.
The U.S. is different because of the NAR’s Code of Ethics and Standards of Practice, which the association describes as its Ten Commandments. Its chief injunction is that Realtors “shall cooperate with other brokers.” Cooperation, Mr. Ryan says, is really collusion to keep commissions high: “There’s an artificial 5% fee tacked on the price of every home.”
Buyers often don’t need brokers, since they can search for homes online and tour them on their own. “When I was living in Malibu, there were people who were surfing all day and they seemed to be doing very well. And when I asked them what they did, they said they were real-estate agents,” he says. “They sold two homes of buddies of theirs and that let them make $120,000 to surf for the next year.”
Brokers can sometimes help buyers negotiate and close purchases, Mr. Ryan notes. But there’s a conflict of interest when the seller pays the buyer’s agent. There’s little incentive, then, for buyer brokers to negotiate a better deal for their clients. The system instead encourages them to steer clients to higher-priced homes. Buyer agents also steer clients away from homes that offer lower commissions. Thus commissions don’t come down.
At the same time, seller agents often don’t get the best deals for their clients because they want a quick commission. REX aimed to reduce these inefficiencies in part by using predictive analytics to match home buyers and sellers. It hired licensed real-estate professionals but paid them fixed salaries to eliminate conflicts of interest.
While sellers paid REX a 2% fee, they didn’t have to compensate buyer brokers. REX advertised homes on its own website as well as on better-known real-estate sites like Zillow and Trulia. But Mr. Ryan says REX would often get calls from buyer agents asking. “Are you going to cooperate?”
“They’ll say, ‘Hey, that house on 22 Greenwood, is it for sale? Are you going to cooperate?’ Cooperate means ‘you’re going to pay me the commission,’ ” he says. REX would respond that it didn’t pay buyer agents and “you have to get the money from your client, just like lawyers do, investment bankers do. . . . If you want to submit an offer with that fee included, we’ll consider it, but it’s going to be a lot less attractive than the person who makes an offer without that fee. Or you can talk to your buyer about paying you a fee for your work.”
Many angry buyer agents vowed never to show REX homes. Some buyers even reported that their agents lied, telling them REX homes weren’t for sale. Mr. Ryan has shared with the Justice Department hundreds of recorded phone calls between REX employees and Realtors, which he says provide evidence of illegal steering and price-fixing. The NAR has denied both allegations.
While REX initially grew rapidly, its growth faltered in 2021 after Zillow joined the NAR and began complying with an association rule for affiliated multiple-listing services that made it harder to find homes sold by nonmembers. After that, Mr. Ryan says, home sellers didn’t want to list their homes with REX because they worried few buyers would see them. “All of a sudden, our growth goes from around 100% a year to 5%. And you can’t fund yourself as a fast-growing company like an Uber or a Robinhood growing 5%.” The NAR “basically killed us.”
Mr. Ryan then channeled his energies into whipping up support and marshaling evidence for antitrust class actions against the NAR. His efforts, including speeches at antitrust legal forums and providing data to plaintiffs, paid off last autumn when a Missouri jury handed down a $1.8 billion verdict against the NAR and some brokerage firms. Afterward, payday-chasing plaintiff lawyers rushed to file lawsuits in other states.
But Mr. Ryan doubts the March 15 settlement will be enough to diminish the NAR’s clout or reduce the fees Americans pay. Seller agents, he notes, will still be able to advertise compensation for buyer brokers on other websites, so steering will continue to occur. “There’s a lot of other rules that the NAR has set up to enforce the price fix,” he says, including the one that concealed home listings by REX on Zillow. He hopes the Justice Department will bring a broader antitrust case against NAR.
Good news came on Friday when the U.S. Circuit Court of Appeals for the District of Columbia ruled that the Justice Department could reopen its investigation of the NAR. The Trump administration in November 2020 closed its probe with a settlement that made superficial changes to some NAR policies. The Biden Justice Department sought to continue the investigation, but the NAR sued.
Launching a broader investigation into the NAR’s rules would seem to advance the Biden administration’s agenda of making housing more affordable. By Mr. Ryan’s calculation, American home buyers and sellers pay some $120 billion a year in excessive real-estate costs. If commissions sharply dropped, home prices would, too, since the fees get baked into the price. Sellers would also make more from a sale, which they could use for a down payment on another home.
Lower commissions would also boost profits for home builders, who must pay buyer brokers’ fees on new-home sales. That, Mr. Ryan says, would spur more home construction, further reducing prices and rents. Lower broker commissions would increase the volume of home sales, as happened in the stock market. In the 1970s the Securities and Exchange Commission ordered stockbrokers to end fixed trading fees. Stockbrokers then, like Realtors today, had become lazy because they faced little competition. Because fees were fixed at artificially high rates, few Americans could afford to trade stocks.
“When it costs 12 cents to trade shares, a big day on the New York Stock Exchange was 100 million shares traded,” Mr. Ryan says. “Now that the fee is almost zero, two billion shares trade a day. Every economist knows that when you drive transaction costs down, transactions go way up per day.”
Other industries could benefit from lower commissions, too. “The jobs of plumbers and carpenters and electricians and title companies and escrow companies and mortgage companies are all tied to the volume of homes trading,” Mr. Ryan says.
Better buyer agents might still be able to charge 3%, but the others would find other work, boosting the economy further. “Is it really true that 1½ percent of the workforce should be real estate agents in America?” Mr. Ryan asks. “When the price for the job drops to what it should be, then people are going to start doing other things with their time, which will be much more productive.”
Lower commissions would also reduce the cost of moving. That would mean more labor mobility, which would boost the nation’s economy, although Mr. Ryan admits it could hurt blue states that are already losing population. But that could spur those states to improve governance to stanch the flow of residents.
Mr. Ryan holds another view that is countercultural, especially for someone in the real-estate business. “Everyone thinks that they should own a house, which is like the 11th Commandment, and it just makes no sense,” he says. He is a co-author, with John Tamny, of a forthcoming book, “Bringing Adam Smith Into the American Home: A Case Against Home Ownership.”
“I’m not against owning a home in general,” he says. “I just want people to look at it as the way that they should look at a car. Should I own the car? Should I lease the car long-term, or should I just Uber around?”
That also puts him at odds with the NAR, which has been among the loudest advocates of government subsidies to boost home ownership. The result is a gigantic government-housing complex that harms taxpayers: “Fannie Mae, Freddie Mac, HUD—all these programs to encourage homeownership blow up every 20 to 25 years without fail.”
https://www.wsj.com/articles/the-realtors-still-need-market-reform-antitrust-home-real-estate-6663bec6
Despite a recent lawsuit settlement, the cartel keeps home prices high and damages the economy. REX founder Jack Ryan wants federal antitrust action.
By Allysia Finley
April 5, 2024 3:12 pm ET
Ask a Democrat to name the most powerful business lobby in Washington, and he might say the pharmaceutical or fossil fuel industry. A Republican might respond the climate lobby. Jack Ryan says the real answer is the trade group both parties are too intimidated to cite.
“People in Congress are terrified of the Realtors, because they probably have 10,000 in their district, and a lot of them make a lot of money,” says Mr. Ryan, 64, who is a real-estate entrepreneur but not a Realtor. The latter term is a registered trademark of the National Association of Realtors; nonmembers who use it risk an infringement suit. Realtors “work the PTA, the football games, the churches, the synagogue,” Mr. Ryan says. Little wonder the cartel’s rules, which hurt home buyers and sellers alike, have gone unchallenged in Congress.
Not so in court. The NAR has been hit by class-action claims across the country over a rule that requires seller agents to make a blanket offer of compensation to buyer brokers as a condition for listing a home on an affiliated multiple-listing service, a database of homes for sale. On March 15, the NAR settled the claims by agreeing to scrap the rule and pay $418 million to compensate sellers.
In Mr. Ryan’s view, the settlement is more a tactical retreat by the NAR than a victory for home buyers and sellers. The legal battle against the cartel is far from over.
Mr. Ryan likens himself to King David in describing his yearslong fight against the NAR—a somewhat incongruous metaphor given that, while not as tall as Goliath, Mr. Ryan stands 6-foot-4. After nearly two decades as a Goldman Sachs investment banker, in 2000 he went to teach at an all-boys Catholic school on Chicago’s south side—an effort, he says, to put his God-given talents to good use. In 2004 he won the Republican nomination to face Senate candidate Barack Obama, but he withdrew from the campaign after records from his 1999 custody dispute with his ex-wife were released to the public.
In 2015 he founded REX, a real-estate service company that aims to buy and sell homes outside the Realtors’ system—bypassing broker commissions that have averaged 5.5% to 6% for decades even as transaction fees in other industries have plunged thanks to innovation and competition.
“Why is it that every middleman’s fees are down but residential real estate fees?” he says. “And why is it always the same fee whether it’s a $300,000 home, a $3 million home or a $30 million home? And why is it the same if it’s a hot market or a cold market? And why is it that a first-year associate charges 5.5% and the 30-year grizzled vet who’s done 500 transactions charges 5.5%?” In most other developed countries, few buyers use brokers and overall commissions run in the neighborhood of 2%.
The U.S. is different because of the NAR’s Code of Ethics and Standards of Practice, which the association describes as its Ten Commandments. Its chief injunction is that Realtors “shall cooperate with other brokers.” Cooperation, Mr. Ryan says, is really collusion to keep commissions high: “There’s an artificial 5% fee tacked on the price of every home.”
Buyers often don’t need brokers, since they can search for homes online and tour them on their own. “When I was living in Malibu, there were people who were surfing all day and they seemed to be doing very well. And when I asked them what they did, they said they were real-estate agents,” he says. “They sold two homes of buddies of theirs and that let them make $120,000 to surf for the next year.”
Brokers can sometimes help buyers negotiate and close purchases, Mr. Ryan notes. But there’s a conflict of interest when the seller pays the buyer’s agent. There’s little incentive, then, for buyer brokers to negotiate a better deal for their clients. The system instead encourages them to steer clients to higher-priced homes. Buyer agents also steer clients away from homes that offer lower commissions. Thus commissions don’t come down.
At the same time, seller agents often don’t get the best deals for their clients because they want a quick commission. REX aimed to reduce these inefficiencies in part by using predictive analytics to match home buyers and sellers. It hired licensed real-estate professionals but paid them fixed salaries to eliminate conflicts of interest.
While sellers paid REX a 2% fee, they didn’t have to compensate buyer brokers. REX advertised homes on its own website as well as on better-known real-estate sites like Zillow and Trulia. But Mr. Ryan says REX would often get calls from buyer agents asking. “Are you going to cooperate?”
“They’ll say, ‘Hey, that house on 22 Greenwood, is it for sale? Are you going to cooperate?’ Cooperate means ‘you’re going to pay me the commission,’ ” he says. REX would respond that it didn’t pay buyer agents and “you have to get the money from your client, just like lawyers do, investment bankers do. . . . If you want to submit an offer with that fee included, we’ll consider it, but it’s going to be a lot less attractive than the person who makes an offer without that fee. Or you can talk to your buyer about paying you a fee for your work.”
Many angry buyer agents vowed never to show REX homes. Some buyers even reported that their agents lied, telling them REX homes weren’t for sale. Mr. Ryan has shared with the Justice Department hundreds of recorded phone calls between REX employees and Realtors, which he says provide evidence of illegal steering and price-fixing. The NAR has denied both allegations.
While REX initially grew rapidly, its growth faltered in 2021 after Zillow joined the NAR and began complying with an association rule for affiliated multiple-listing services that made it harder to find homes sold by nonmembers. After that, Mr. Ryan says, home sellers didn’t want to list their homes with REX because they worried few buyers would see them. “All of a sudden, our growth goes from around 100% a year to 5%. And you can’t fund yourself as a fast-growing company like an Uber or a Robinhood growing 5%.” The NAR “basically killed us.”
Mr. Ryan then channeled his energies into whipping up support and marshaling evidence for antitrust class actions against the NAR. His efforts, including speeches at antitrust legal forums and providing data to plaintiffs, paid off last autumn when a Missouri jury handed down a $1.8 billion verdict against the NAR and some brokerage firms. Afterward, payday-chasing plaintiff lawyers rushed to file lawsuits in other states.
But Mr. Ryan doubts the March 15 settlement will be enough to diminish the NAR’s clout or reduce the fees Americans pay. Seller agents, he notes, will still be able to advertise compensation for buyer brokers on other websites, so steering will continue to occur. “There’s a lot of other rules that the NAR has set up to enforce the price fix,” he says, including the one that concealed home listings by REX on Zillow. He hopes the Justice Department will bring a broader antitrust case against NAR.
Good news came on Friday when the U.S. Circuit Court of Appeals for the District of Columbia ruled that the Justice Department could reopen its investigation of the NAR. The Trump administration in November 2020 closed its probe with a settlement that made superficial changes to some NAR policies. The Biden Justice Department sought to continue the investigation, but the NAR sued.
Launching a broader investigation into the NAR’s rules would seem to advance the Biden administration’s agenda of making housing more affordable. By Mr. Ryan’s calculation, American home buyers and sellers pay some $120 billion a year in excessive real-estate costs. If commissions sharply dropped, home prices would, too, since the fees get baked into the price. Sellers would also make more from a sale, which they could use for a down payment on another home.
Lower commissions would also boost profits for home builders, who must pay buyer brokers’ fees on new-home sales. That, Mr. Ryan says, would spur more home construction, further reducing prices and rents. Lower broker commissions would increase the volume of home sales, as happened in the stock market. In the 1970s the Securities and Exchange Commission ordered stockbrokers to end fixed trading fees. Stockbrokers then, like Realtors today, had become lazy because they faced little competition. Because fees were fixed at artificially high rates, few Americans could afford to trade stocks.
“When it costs 12 cents to trade shares, a big day on the New York Stock Exchange was 100 million shares traded,” Mr. Ryan says. “Now that the fee is almost zero, two billion shares trade a day. Every economist knows that when you drive transaction costs down, transactions go way up per day.”
Other industries could benefit from lower commissions, too. “The jobs of plumbers and carpenters and electricians and title companies and escrow companies and mortgage companies are all tied to the volume of homes trading,” Mr. Ryan says.
Better buyer agents might still be able to charge 3%, but the others would find other work, boosting the economy further. “Is it really true that 1½ percent of the workforce should be real estate agents in America?” Mr. Ryan asks. “When the price for the job drops to what it should be, then people are going to start doing other things with their time, which will be much more productive.”
Lower commissions would also reduce the cost of moving. That would mean more labor mobility, which would boost the nation’s economy, although Mr. Ryan admits it could hurt blue states that are already losing population. But that could spur those states to improve governance to stanch the flow of residents.
Mr. Ryan holds another view that is countercultural, especially for someone in the real-estate business. “Everyone thinks that they should own a house, which is like the 11th Commandment, and it just makes no sense,” he says. He is a co-author, with John Tamny, of a forthcoming book, “Bringing Adam Smith Into the American Home: A Case Against Home Ownership.”
“I’m not against owning a home in general,” he says. “I just want people to look at it as the way that they should look at a car. Should I own the car? Should I lease the car long-term, or should I just Uber around?”
That also puts him at odds with the NAR, which has been among the loudest advocates of government subsidies to boost home ownership. The result is a gigantic government-housing complex that harms taxpayers: “Fannie Mae, Freddie Mac, HUD—all these programs to encourage homeownership blow up every 20 to 25 years without fail.”
https://www.wsj.com/articles/the-realtors-still-need-market-reform-antitrust-home-real-estate-6663bec6
179
zzyzzx
2024 Jul 3, 8:36am
zzyzzx
2024 Jul 3, 8:36am
https://www.inqld.com.au/business/2023/09/12/real-estate-agents-and-media-are-our-least-trusted-occupations-and-gap-is-growing-wider
Real estate agents and media are our least trusted occupations, and gap is growing wider
Real estate agents are seen as the least ethical occupation, but the media is considered the least ethical sector.
Real estate agents and media are our least trusted occupations, and gap is growing wider
Real estate agents are seen as the least ethical occupation, but the media is considered the least ethical sector.
180
zzyzzx
2024 Jul 3, 10:51am
zzyzzx
2024 Jul 3, 10:51am
https://www.newsweek.com/housing-market-realtors-struggling-1905555
Realtors 'Running Out of Money' as Housing Market Struggles
Realtors 'Running Out of Money' as Housing Market Struggles
182
zzyzzx
2024 Jul 5, 9:38am
zzyzzx
2024 Jul 5, 9:38am
https://www.reddit.com/r/RealEstate/comments/1dvl72g/buyers_agent_sabotaging_my_home_sale_is_this_legal/
Buyer’s agent sabotaging my home sale. Is this legal?
Here’s our situation. We interviewed a few real estate agents and didn’t like any of them. We’re in a very rural area so didn’t have a lot of options. They were unprofessional and hard to communicate. Their other listings looked horrible.
So we decided to sell it on our own, took professional pictures and put it on the market with flat fee MLS service. We figured 1% is enough for buyer’s agent’s work (especially with recent lawsuit and change) We got a lot of saves and views on Zillow and Realtor but got no contacts. We were curious to see how buyers would reach us so we requested a showing on Zillow. Got connected to a local agent. And here’s what happened:
He said he will get back to me after some research. He texted me saying “I have concerns about the property and don’t recommend it. Are you interested in any other property?” So we called as a “buyer” and asked him what the problem was. He basically told us that “The seller is a greedy scam artist who cares only about keeping all money to himself. Even his listing is sketchy with no seller’s agent. It’s a red flag.” Then he goes on the rant “I’m going be on welfare and won’t be able to pay for fuel…. Well I drive a diesel car and it’s expensive. We will have to negotiate the price and you can make up for the lost money for me. Or I will change the contact right before closing and I will make them sign it…. If you REALLY want to see it, I guess we could see but I don’t see the reason”
Whoa. We simply wanted to see if it works because we were nervous about doing it by ourselves but this was much more than that. He was sabotaging the deal and stopping a potential buyer from even looking at the house. Only because he’a angry about getting only 1%. So now, I’m worried if other real estate agents are doing this and if this guy is going to keep cutting people off this way. We’re in a small rural town so I wonder if we’re going to be bullied by these agents in the area. We already changed the fee structure to 2.5% but isn’t it illegal for a real estate agent to do this? Isn’t this what they were sued for recently?
I really want this guy to not take any potential buyers contacts and stop sabotaging the sale. Is there anything I can do to protect myself as a seller?
Buyer’s agent sabotaging my home sale. Is this legal?
Here’s our situation. We interviewed a few real estate agents and didn’t like any of them. We’re in a very rural area so didn’t have a lot of options. They were unprofessional and hard to communicate. Their other listings looked horrible.
So we decided to sell it on our own, took professional pictures and put it on the market with flat fee MLS service. We figured 1% is enough for buyer’s agent’s work (especially with recent lawsuit and change) We got a lot of saves and views on Zillow and Realtor but got no contacts. We were curious to see how buyers would reach us so we requested a showing on Zillow. Got connected to a local agent. And here’s what happened:
He said he will get back to me after some research. He texted me saying “I have concerns about the property and don’t recommend it. Are you interested in any other property?” So we called as a “buyer” and asked him what the problem was. He basically told us that “The seller is a greedy scam artist who cares only about keeping all money to himself. Even his listing is sketchy with no seller’s agent. It’s a red flag.” Then he goes on the rant “I’m going be on welfare and won’t be able to pay for fuel…. Well I drive a diesel car and it’s expensive. We will have to negotiate the price and you can make up for the lost money for me. Or I will change the contact right before closing and I will make them sign it…. If you REALLY want to see it, I guess we could see but I don’t see the reason”
Whoa. We simply wanted to see if it works because we were nervous about doing it by ourselves but this was much more than that. He was sabotaging the deal and stopping a potential buyer from even looking at the house. Only because he’a angry about getting only 1%. So now, I’m worried if other real estate agents are doing this and if this guy is going to keep cutting people off this way. We’re in a small rural town so I wonder if we’re going to be bullied by these agents in the area. We already changed the fee structure to 2.5% but isn’t it illegal for a real estate agent to do this? Isn’t this what they were sued for recently?
I really want this guy to not take any potential buyers contacts and stop sabotaging the sale. Is there anything I can do to protect myself as a seller?
185
zzyzzx
2024 Aug 19, 11:16am
zzyzzx
2024 Aug 19, 11:16am
https://www.reddit.com/r/RealEstate/comments/1ew7nz3/is_it_time_for_a_new_realtor/
Is it time for a new realtor?
Is it time for a new realtor?
186
zzyzzx
2024 Aug 20, 7:54am
zzyzzx
2024 Aug 20, 7:54am
https://www.reddit.com/r/FirstTimeHomeBuyer/comments/1evg5dz/realtors_are_the_leeches_of_society/
Realtors are the leeches of society
Realtors are the leeches of society
187
zzyzzx
2024 Aug 22, 10:12am
zzyzzx
2024 Aug 22, 10:12am
https://www.reddit.com/r/RealEstate/comments/1ey8k1l/you_are_an_unrepresented_buyer_and_want_to_see_my/
You are an unrepresented buyer and want to see my listing…
They are clearly another butthurt realtor that nobody should use.
You are an unrepresented buyer and want to see my listing…
They are clearly another butthurt realtor that nobody should use.
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One of the sales wiennie's at this development was trying to get me to buy some land. I understand that is their job, but the salesman seemed to be oblivious to the economy and market. They are programmed to say "it's a great time to buy" over and over again. :-(
https://www.centennialridgetx.com/index.html