patrick.net

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.

Out of curiosity, which blog is the “ben’s blog” y’all are referrin’ to?

That would be the mother of all bubble blogs, thehousingbubbleblog.com.

But patrick.net is a community, if not a family.

If you get full asking price why would you care if you agent got both sides? Their job is to sell your house, if he has a pocket buyer I'd rather have that 'exclusivity'.

If you get full asking price why would you care if you agent got both sides?

I agree. But I will only deal with good agents.

Your problem DINO is that you try to paint all realtors the same. They can be viewed as a commodity (contrary to many monopolies) but even that is not right because they are different in abilities, experiences, and networks. Some are good, some are disgusting, some are just new inompetent Johnny Come Lately types.

I suspect your model of how things should work basically ends up being a government HUD official lists your house in the national registry, then a buyer is approved by the national bank, and the deal is transacted at the government determined fair market price. Then no one can get hurt, and it will be much more efficient.

I have met some good agents. I even have friends who are agents. You just need to trust your instincts on whether they can help you.

Malcom,

Randy has tried to help you, I've tried to help you and you just keep flailing for some kind of loose thread to tug on. NAR is crooked, we all know it and their culture of corruption, collusion and entitlement is both legendary and well documented. There is no paradox. Not here.

And what's with the JBR/"successful" cheap shot? I've made (and lost) a lot money. I've never made anything secret about that. Anybody can act "classy" when they're winning.

He's a realtor.

Peter P, your point is ridiculous. You actually expect people to shop around for a good agent? Absolutely absurd. Wait a minute, let me get this straight, you are advocating choosing an agent based on his or her actual ability. You don't find it UNFAIR to consider someone's track record in your decision? You don't seem to realize that you are VICTIMIZING newer agents who haven't proved themselves as yet. Don't you realize that this type of EXCLUSION makes you a greedy MONOPOLIST? If not a monopolist you are a DE FACTO COLLUSIVE MONOPOLY, and enough people like you can only lead to buyer CARTELS.

"RealtWHORES?" - are BJs in the listing agreement?

"RealtWHORES?" - but they are not the ones getting f**ked! At least, not yet.

DINO, no offense but I don't need your help. I have a point of view just like yours. You sound like a bible basher with this, I am right so I am trying to help the ignorant atitude.

Actually I live quite well in a fully paid off house if you must know.

You should learn to see through a bunch of silly realtors scrambling around to try to save their livlihoods. It's quite comical when you realize no one really has any power over you.

Randy H & DinOR,

Great posts, great debate --thanks for doing the "heavy lifting" on this for all of us.

Malcolm,

I can understand that it's possible to argue against the MLS being a monopoly from a strictly legalistic POV, and I'm sure capable antitrust lawyers could argue statutes and precedents forever. But from a consumer or disinterested observer's POV, how can you not see anti-competitive or collusive behavior happening right before your eyes? Does 5-6% for basically granting access to a proprietary database seem like a reasonable premium to you, especially when the rest of the world somehow manages with 1-2%?

Forget about the local Realtor pulling down competitor's signs/flyers stuff for a minute --small potatoes. How many cases of coordinated MLS "blacklisting" or large-scale NAR's legal broadsides against competing HelpUSell or Zillow-type outfits does it take for you to see there's something very anti-competitive going on, and they're not just isolated, unrelated incidents?

The strict "no compete" clauses in MLS-Realtor agreements may turn out to be the smoking gun form a legal standpoint. However, the anti-competitive collusive behavior (blacklisting, attacking competitors, etc.) will only buttress the case.

Malcolm, you are right. I should not discriminate a person based on his abilities.

To be fair, I will choose one by throwing darts. Besides, this should outperform 75% of agent-pickers. :)

"Actually I live quite well in a fully paid off house if you must know. "

If more people made this their goal, the real estate guild would be far less an issue. People would not see the price as "other peoples money," and not be so careless with it.

HARM says
"how can you not see anti-competitive or collusive behavior happening right before your eyes? Does 5-6% for basically granting access to a proprietary database seem like a reasonable premium to you, especially when the rest of the world somehow manages with 1-2%?"

I see it all, I don't disagree with anything you are saying, but you guys keep shooting down your own point when you then bring up the new competing technologies that by themselves are unraveling it. MLS is a proprietary system, or course it is anti competitive, that is the definition of proprietary. You guys have this purist view of how business works. It is not like that. It is just like the military, your goal is to establish an unfair advantage. If that seems wrong to you then I'm afraid you have some big problems because that is the main point in most MBA programs.

Peter, that is funny, that reminded me of these human lie detectors. They boast about having a 50% accuracy rate. Excuse me? You just basically admitted that you aren't better than random chance.

I'm not seeing this resulting in any conclusion. Malcolm, with all due respect, you are refusing to engage on objective grounds.

My conclusions, as stated before in earlier threads spanning over a year ago, are:

* The MLS consortium represents a potential source of future anti-competitive enforcement action. It violates a number of tests normally applied to similar environments.

* People misunderstand, or choose to selectively understand, the fundamentals of American Free Market Capitalism. Thus the ridiculous analogies this debate has reached.

* The law is complicated and even most lawyers only understand portions of it. Couple that with the fact many words with legal definitions are overloaded by terms of art from various sciences, which are again overloaded by conventional connotation. Monopoly is such a word.

* The NAR and its MLS consortium will not be regulated in the near future due to practical political reasons. This will not be a vote on whether it is "right" or "wrong", just that it is.

* The free market will eventually have its revenge, if the industry is not regulated first. But not before a spectacular amount of unnecessary economic sacrifices are made at the alter of self-serving inefficiencies and anti-free market behavior.

* There is precedent for everything I've said above.

Ok Randy since I don't like being accused of dodging the point I will go one by one.

Randy H Says:

April 18th, 2007 at 11:50 am
I’m not seeing this resulting in any conclusion. Malcolm, with all due respect, you are refusing to engage on objective grounds.

(How? I am the only one to substantiate my points.)

My conclusions, as stated before in earlier threads spanning over a year ago, are:

* The MLS consortium represents a potential source of future anti-competitive enforcement action. It violates a number of tests normally applied to similar environments.

(The courts seem to disagree so far)

* People misunderstand, or choose to selectively understand, the fundamentals of American Free Market Capitalism. Thus the ridiculous analogies this debate has reached.

(I agree, but if you are applying this to me let's all whip out our degrees, or life stories. My credentials aren't peanuts.)

* The law is complicated and even most lawyers only understand portions of it. Couple that with the fact many words with legal definitions are overloaded by terms of art from various sciences, which are again overloaded by conventional connotation. Monopoly is such a word.

(Yes, people here throw terms around for shock value, and don't even understand that even loosely termed there is no shock value to those of us who know the systems.)

* The NAR and its MLS consortium will not be regulated in the near future due to practical political reasons. This will not be a vote on whether it is “right” or “wrong”, just that it is.

(That's what I've been saying.)

* The free market will eventually have its revenge, if the industry is not regulated first. But not before a spectacular amount of unnecessary economic sacrifices are made at the alter of self-serving inefficiencies and anti-free market behavior.

(The sacrifices are required for the free market to work. Back to theory, excess profits invite competition. When you block the excessive profit you delay indefinitely a market correction.)

* There is precedent for everything I’ve said above.

(Yes)

Is anything else about my point of view ambiguous?

MLS is a proprietary system, or course it is anti competitive, that is the definition of proprietary. You guys have this purist view of how business works. It is not like that. It is just like the military, your goal is to establish an unfair advantage. If that seems wrong to you then I’m afraid you have some big problems because that is the main point in most MBA programs.

I don't think I'm totally naive in how business really operates, and I know that businesses always try to create unfair advantages to the extent they are allowed to by law. The question is, do any of the NAR-MLS activities and/or member agreements actually violate antitrust laws?

Also, the military has a legal and de facto "monopoly" on warfare, granted by the Constitution.

I haven't resorted to making up words or applied some idiot smashing signs as supporting my argument. I am always cautious when people can't just use a word directly because it doesn't apply that they start adding prefixes like pseudo, or stringing a bunch of terms together to sound intellectual.

Oh come on, you know I meant the military has the objective of attaining an unfair advantage over the enemy, not whether it competes with the free market.

Malcolm

I was applying my criticisms generally. Lack of understanding or respect for free market capitalism is a running theme of mine on this bog. I apply it fairly evenly, even to fellow MBA holders. The rise of MBA CSR course, programs and institutions is a perfect example of what I see as a failure to understand the basic tenants of market capitalism within a representative social democracy.

I continue to take issue with your categorization of "dead loss" as "excess profits". The point of "dead loss" is that it does not invite entrants, but it discourages entrants. The *only* way to remedy dead loss is through government regulation, or to wait long enough for the entrenched industry to become technologically irrelevant. The latter is hardly a triumph of market capitalism so much as it is a statement about human society.

Or more academically, it is a failure of the market to efficiently allocate capital in the short, medium or long-term. Only in the very-long run does capital reallocate itself through obsolescence.

Your question of NAR-MLS lies in the courts, not to how many people with the same agenda of not liking something whine about it. It is a nonissue until you get a court to agree with you.

I'm not debating dead loss or excess profits, they are related but tangents to the main issue we are discussing. To refocus, is the MLS system a violation of antitrust laws or is it so legally out of line that reform is needed?

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.

Malcolm,

RE: military analogy

You said: "It [meaning business] is just like the military, your goal is to establish an unfair advantage." For business to become just like warfare, we would have to fully deregulate each market. The short-term result would be close to anarchy, and the long-term result would be monopolies and cartels that enforce their anti-competitive market power through violence or threat of violence. Pretty much like modern-day Sudan or Nigeria, I suppose. Is this an ideal "free market"?

"Or more academically, it is a failure of the market to efficiently allocate capital in the short, medium or long-term. Only in the very-long run does capital reallocate itself through obsolescence. "

Peter, Randy is hinting that the free maket sometimes fails.

HARM, nice point, and I agree with it. That's why I'm not a purist either, I just don't have a problem with a bunch of nitwit realtors.

HARM I am trying to get it published but my thesis was actually on Public Private Partnerships.

I believe public policy sets the limits, then you let the free market do its thing. That's my view in a nutshell.

@Malcolm,

Ok then. I don't really have a problem with nitwit realtors either, as long as they don't gang up, collude and start acting like mobsters.

Peter, Randy is hinting that the free maket sometimes fails.

Even I fail sometimes. ;)

No, not you.

But HARM, this is the slippery slope that everyone is on. They take the numberous incidents of predictable human behavior and extrapolate in an image (purely for shock value) of a bunch of guys breaking knee caps. They are not mobsters, many of them couldn't even follow this discussion.

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.

Malcolm

I don't agree that dead loss is a tangential issue. For me, at least, the market economics are all I really care about as a theoretical debate.

Yes, I am not suggesting that free markets sometimes fail. I am declaring that free markets often fail in the short, medium and even long term. I am one of those who believes in principles based market regulations which are dynamically codified into effective rules-based constraints. I also believe we are failing on both points currently. So my assertion that the MLS represents a market failure is consistent.

Similarly, I am a pragmatist. I would endeavor to address market failures which are of a higher priority, and accommodate or rationalize those which are less consequential. The NFL, for example, is easily rationalizable. It is also economically less consequential than the MLS, or say the various dead losses which exist in the energy complex.

Many of the FBs are realtors who supposidly had the inside scoop on what was going on. ha ha ha