NAR settles with the DOJ

[Caligirl]

Interesting results regarding the antitrust case filed in 2005 against the NAR:

http://www.usdoj.gov/opa/pr/2008/May/08-at-467.html

 

[Head Surfer]

Interesting but not surprising. The NAR has long been lobbied to protect the antiquated business practices and over priced services its members provide.

Time for it to move into the 21st century and have a little competition. No one needs a Realtor to decide which houses to show a customer, the internet is much more efficient to let the customer sort thorough the listings and decide which ones to see.

The Realtor can then earn their money by writing the contract and handling the administrative details. And commissions will, and should be lower because they are providing less service.

 

[Eli Weiss]

Realtors Agree to Stop Blocking Web Listings

In a court settlement, government lawyers said the National Association of Realtors could no longer discriminate against Internet-based agents by blocking them from the group’s multiple listing service, a database of for-sale properties.

http://www.nytimes.com/2008/05/28/business/28realty.html

http://biz.yahoo.com/nytimes/080527/1194779373631.html?.v=3

 

[Terrel L. Shields]

About time...I just hope it doesn't mean they will raise fees. I am sick of the NAR and MLS's in general.

 

[MJ Rock]

How will this effect the appraisal industry? It seems this action will eventually allow AVM, Z's, Zillow and other non traditional valuation service providers the access to build a superior database. Eventually, consumers will demand sales along with the listings for comparison shopping. With sales data from the MLS and public information, lenders would rely more heavily on Automated models instead of appraisers when quality of data is significantly improved with full MLS access. We might save with cheap MLS access in the short term but it may cost us the mortgage business in the long run.

 

[Fred]

How will this effect the appraisal industry? It seems this action will eventually allow AVM, Z's, Zillow and other non traditional valuation service providers the access to build a superior database. Eventually, consumers will demand sales along with the listings for comparison shopping. With sales data from the MLS and public information, lenders would rely more heavily on Automated models instead of appraisers when quality of data is significantly improved with full MLS access. We might save with cheap MLS access in the short term but it may cost us the mortgage business in the long run.

Except for saying it depends on who "us" is, and not agreeing that the people who use AVM's to develop appraisals aren't "appraisers" - I'd call your post a good example of asking a question and answering it. Your analysis sounds right to me. It has been assumed across-the-board that going forward, regional and national property databases would improve in accuracy, making the results of AVM appraisal more accurate.

 

[Mountain Man]

Interesting but not surprising. The NAR has long been lobbied to protect the antiquated business practices and over priced services its members provide.

Time for it to move into the 21st century and have a little competition. No one needs a Realtor to decide which houses to show a customer, the internet is much more efficient to let the customer sort thorough the listings and decide which ones to see.

The Realtor can then earn their money by writing the contract and handling the administrative details. And commissions will, and should be lower because they are providing less service.

What we have in my area are agents have become more like ad agencies... many offer stages services based on the level of advertising and exposure. Keep in mind that the selling side typically gets 3%, but most are something like: 4%, MLS and on the web. 5% MLS, print ads, and web exposure. 6% MLS, print ads, web exposure, open houses, and mailers to bombard prospective buyers and the neighborhood. When I buy a HUD foreclosure, and don't write it up myself, I pay a flat fee on the buying side, then give the same agent the listing at 4% when remodeling is done. Some older franchise companies (coldwell tanker) still live in 1985, insist on a full 6% or 7% commission, and refuse to offer any discounted services... even for builders who do 10+ homes a year. That's a part of the reason I left. In days gone by, you HAD to go through an agent to find a house for sale. MLS books were GOLDEN, and access was heavily restricted. But many other franchises, like Century 21, have learned that the internet has changed things. They not only have kept their full service brokerage, but also started a discounted "assist to sell" kind of service. The smart brokerages will embrace the internet, change to specialize as more of an ad agency function, and offer services A La Carte.

 

[Fred]

But many other franchises, like Century 21, have learned that the internet has changed things. They not only have kept their full service brokerage, but also started a discounted "assist to sell" kind of service. The smart brokerages will embrace the internet, change to specialize as more of an ad agency function, and offer services A La Carte.

Sounds like an idea touted in an AI White Paper from several years ago: scope of work - range of services.

Next thing you know, the market will start looking for the same thing in valuation. Fast and cheap desktop appraisals developed with the assistance of AVM in addition to detailed-interior-inspection, field-researched appraisals.

 

[Caterina Platt]

I, for one, am not cheering

Sorry guys. I don't agree that it's a good thing. The way I understand this, I could get licensed and sell your real estate in Illinois over a virtual office website?

A host of problems arise from this. How in the bloody H*ll do I know anything about Illinois real estate law, your property, your subdivision covenants, your school district, traffic, etc.? How can I be liable for the material facts about the property condition when I've never seen the place? Who's going to be present for the inspections? I certainly won't be there for you at closing.

This will do the same 'good' for the real estate sales industry that doing mortgages over the internet has done for the lending industry. I bet most of us can name more bad than good in that realm.

 

[Jim Bartley]

I agree with Ms Platt. DOJ makes the leap that cheaper=better.