Realtor conflict of interest; The National Association of Realtors should reimburse the American taxpayers. The R/E Maven

 

The proposed settlement between the Department of Justice and the National Association of Realtors of the antitrust suit includes the agreement that the National Association of Realtors will no longer block the ability of virtual office (Internet) brokers from the use of the Multiple Listing service.

This agreement certainly sounds like the government has proven the case against the National Association of Realtors and the National Association of Realtors has lost the fight.

The question is at what cost and who ultimately will pay these costs?

This settlement should include fines and or penalties that should as a minimum completely cover what ever it cost the government to prosecute this case. Nothing, absolutely not one dime should come out of the American taxpayers pockets to pay for any related expenses in this case.

The National Association of Realtors is an extremely wealthy organization and their motives for blocking the use of the Multiple Listing Service were done for purely selfish money driven reasons. They need to pay for their own greed.

The public voiced its opinion recently that Real Estate Agents were one of the most distrusted professions. It is small wonder they feel that way when the National Association of Realtors President Richard Gaylord attempt to deceive the public with his press release that the settlement is a victory for the public. It was never about the good of the public. It was always about the survival of his association.

Let him say what he will but I say it is only a victory if the National Association foots the entire bill!

 

 

Realtor conflict of interest: The Dept. of Justice vs. The National Association of Realtors. The R/E Maven

 

 

 

Realtors are supposed to have a fiduciary relationship with buyers or sellers of real estate. They are sworn to uphold this capacity and work in the best interest of either the buyer or the seller. That is to place the best interest of the buyer or seller first, above their best interest.

 

Interestingly, the National Association of Realtors (NAR) choose to fight the government long and hard to prevent other brokers from modernizing the sales system through some new marketing capabilities of the Internet.

 

The Multiple Listing Service was built upon the premise that Agents and brokers would cooperate and have equal access to sell one another’s inventory.

In the proposed settlement between the Dept. of Justice vs. The National Association of Realtors, President Richard Gaylord recently announced, “the settlement affirms the value of Multiple Listing Services as a tool of broker-to-broker cooperation.” But this is exactly one of the reasons why the Department of Justice (at the expense of the American public) had to file an antitrust lawsuit against the National Association of Realtors in the first place. The NAR was blocking the equal opportunity use of the MLS system by virtual office (Internet) brokers. They were not letting every broker use the tools Mr. Gaylord claims are of such value to share broker-to-broker.

Mr. Gaylord is taking credit for bring about the very change that he and the NAR were trying to stop and had to be forced to allow. It seems rather hypocritical to run an organization and system, that functions on member cooperation, to then only turn around and prevent this same cooperation. Then for the sake of public relations, the NAR claims victory over the government when it was the government that actually had to force them into this cooperation. And at a cost of how many thousands of dollars out of the taxpayers pockets for them to attempt to do business in a self-serving fashion.

Who’s kidding whom?

The national Association of Realtors took money away from the taxpayers of this country in order to protect their own pocketbooks and then, they want to look like the good guys when they loose the fight. This proposed settlement will bring about change to enable competition, perhaps resulting in lower commission rates and this is what the fight was truly over, the NAR wanted to keep commission rates higher. Not helping the consumers as Mr. Gaylord had the Audacity to announce. This is a conflict of interest. The National Association of Realtor’s interest above all others.

 

It is sad to see the MLS has become such a dinosaur but with this attitude it is small wonder why. They survive because they are the giant but so was Tyrannosaurus Rex. Instead of embracing the capabilities of the Internet they have once again spent years and the taxpayers money being greedy obstructionists to advancement. It seems they have been so bust fighting the inclusion of others that they lost sight in their own system.

 

 

 

 

Realtor conflict of interest: Who to believe, The Dept. of Justice or The National Association of Realtors. The R/E Maven

 

 

 

The Department of Justice announced a proposed settlement to the now almost three year old, civil antitrust lawsuit that they filed against the National Association of Realtors.

 

The Justice Department announced that the “settlement will result in more choices, better services and lower commission rates for consumers.

The Department of Justice challenged the National Association of Realtors polices and related rules that obstruct real estate brokers who use innovative Internet-based tools to offer better services and lower costs to consumers. These policies by the National Association of Realtors prevented consumers from receiving the full benefit of competition. Under the terms of the announced settlement, The National Association of Realtors will repeal its anticompetitive polices and require affiliated Multiple Listing Services to do the same.

 

On the other hand the National Association of Realtors President Richard F. Gaylord recently announced in Realtor Magazine that the proposes settlement is “a win for consumers and Realtors.” Further stating that the proposed settlement resolves Department of Justice concerns, ensuring a level playing field for brokers operating a virtual office Web site and that the settlement affirms the value of the Multiple Listing Service as a tool of broker-to-broker cooperation.

 

So who are we to believe, the Department of Justice or The National Association of realtors? Both the Realtors and the Government spent an enormous amount of money on the action. Who is telling the truth and who do you suspect is putting a lot of spin on this one?

 

Perhaps tomorrow I will examine this a little deeper.

 

 

 

Association of Realtors Conflict of Interest with Deposit Money.

 

 

 

Some Association of Realtors listing contracts allow the Broker to keep one half of the Seller’s deposit money if the Buyer defaults.

This permission is snuck into some listing contracts and most Sellers do not know what they have committed to until it is too late.

“In the event a buyer defaults on the buyer’s obligations under a purchase and sales agreement and forfeits deposit money to the SELLER(S) as liquidated damages, whether by agreement of the buyer or otherwise, the BROKER and SELLER(S) shall share equally in the liquidated damages for that transaction providing the BROKER’S share may not exceed what the commission obligation would have been had the transaction closed. BROKER and SELLER(S) agree any such monies received are for liquidated damages and not commission.”

There are several enormous conflicts of interests with this type of treachery.

It is common for the Seller’s attorney to add a clause into the purchase and sale agreement that the commission will only be paid to the Broker “if as and when the deed is recorded and all monies have been paid” to the Seller. The Realtor’s job is not considered complete until the Seller has actually been paid in full and the Seller no longer owns any interest in their former property.  The Realtor will not be paid until these events occur and the transaction has been entirely completed.

How does the Seller’s Attorney include such a clause for the benefit and protection of the Seller if the Seller has signed this form at listing time, which is usually months before a Buyer has been found and the Seller has hired an attorney? Are Realtors avoiding the Seller’s Attorneys by adopting this language very early on in their relationship with the Seller?

The Realtor’s Association is entirely deceitful in the wording of this clause. Notice the Realtor has the Seller agree and sign that the Realtor’s half of the deposit is not to be considered commission but rather as “liquidated damages.” This is done to allow the Realtor to double dip. The Realtor can now receive the commission as well as one half of the deposit money, if they are lucky enough to find a second buyer.

How does this Realtors Association justify their behavior in all of this? If the Realtor sells the property they might receive a 5% or 6% commission but if there is a problem with the transaction they all of a sudden become the Sellers partner and get one half of the Seller’s deposit money. This will be many thousand of dollars. What liquidated damages has the Realtor suffered as compared to the Seller?

Instead it could be argued that the Realtor has not performed their job at all and does not deserve a dime. If the transaction has hit the point that that the Seller is entitled to keep the Buyer’s deposit, whether in court or by right, it is obvious the realtor involved did not secure a ready, willing and able Buyer for the Seller and should not be paid until they have done so and the transaction is 100% complete.