Realtor obligations: Return phone calls to interested buyers. The R/E Maven

 

 

It simply amazes me how many real estate agents can be so caviler and inefficient in the way they conduct themselves.

A listing realtor has a sworn duty and responsibility to work in the seller’s best interest.

How do many of these realtors justify this obligation when they do not even return inquires of interest concerning the very properties they are supposedly working in the best interest of a seller to sell. If they do not communicate the sales process either stalls or dies on the vine.

Return communication is the second step in this process. The first step is advertising, either through signage or print/Internet. Most firms have someone assigned to perform these duties and they do usually get the word out that a particular property is available for sale. It is in the second step of communication where realtors constantly fall down.

 

Case in point.  I recently responded to a full-page advertisement in the New England Real Estate Journal. This full-page advertisement was placed by one of the offices of the largest real estate chain in the country. This full-page ad contained only one agents name, picture and contact information and it had two parcels of land that I was interested in. I called this Realtor and left two unanswered messages over the course of four days. About the seventh day she finally answered the phone and I attempted to gain some information about the properties. She was not at her desk and her memory concerning the facts was shaky at best so she asked me to send her an email and said she would send the pertinent information back to me upon receipt. I did so the next day and honestly I then forgot about her and these properties. A week later I received mail from her about some totally unrelated real estate. I was put on her automatics mailer but had still not been sent the information I was promised.

 

I made the effort of four contacts seeking information about some unfortunate sellers land that I could now care less about. I feel sorry for the property owner for trusting this realtor. I made more of an effort (4 to 0) to get information concerning this property than the realtor did. For this property it is just too difficult to do business this way. Someone wasted $1,200 for a full-page advertisement and the seller is still the party that suffers from poor agent representation. 

 

 

As a group realtors suffer from a bad reputation. One of their largest sins is their not returning property inquiry phone calls. It is extremely frustrating when potential buyers put more effort into seeking information than the listing realtors does in providing the information. This lack of communication is not in the seller’s best interest.

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.

 

 

 

Real estate marketing advice: the great commission mystery, The R/E Maven

 

 

As a seller of real estate do you know exactly where you commission dollars are going?

 

Most sellers assume that commissions are simply split even Steven, right down the middle but this is incorrect.

 

Printed in an Exclusive Right to Sell Listing Agreement prepared by the State-Wide Multiple Listing Service, Inc. is the following clause. “Broker is authorized to cooperate with other brokers, and divide with other brokers such compensation in any manner acceptable to Broker.”

 

As a seller if you sign this from you have just given your listing broker the authority to do whatever he or she pleases with the commission and how it is split.

 

Now everyone knows that the system has always functioned on a 50/50 split. It is definitely in the seller’s best interest that the buyer’s agent is offered half of the commission. They seem to be attracted to where they are paid the best and rightfully so. Statistics show that the vast amount of listings are not sold by the listing agent but rather by a co-brokered situation with a buyers agent involved in the transaction. So there exists proof positive that the sellers really need every buyer’s agent on board that they can influence. But as a seller, how do you know what is actually occurring? Have you ever even asked?

The sad truth is that many a game has been played between agents over the commission split. It is not uncommon for a listing agent to charge a 6% commission and only offer a 2.5% commission to the buyers Realtor thereby keeping 3.5% for themselves. The easiest way this is done is for the sellers listing agent to just pretend the total commission is 5% and 2.5% is a fair split when in actuality it is not. How is anyone else to know?

 

Sellers you need to treat the real estate agents the same as you would any professional that you consider hiring and for you own benefit ask how much money is involved and what the breakdown is for everyone involved.

 

 

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.

 

 

 

Sellers need to get a commitment from Realtor before listing property.

 

Money is tight in real estate and real estate sales offices are no exception. Even the large national brand offices are cutting back on expenses and the largest expense that they have is their advertising budget. They are all hurting and cutting back on what they spend.

 

For your property to sell effectively it needs to be priced accurately and to be exposed to the entire marketplace. If this is not done because the Realtor’s office has financial constraints then they are doing you and your property a complete disservice.

 Know one knows where that one perfect buyer for your property is going to come from and you cannot afford to let anyone squander away any opportunity.

Spend some time and check out the agent you are considering too hire. What do their current listings look like on the other Internet marketing sites such as www.zillow.com, www.Googlebase.com, www.point2homes.com and www.trulia.com.

Are the descriptions great, is the agents bio and picture complete, are there plenty of pictures and do they utilize at least eight to ten of these sites? Remember that most of these sites are free so all that is required of the agent or their office is some attention to details and if they do not handle this properly you need to wonder what else they might be missing

Just as importantly because this is what the real estate office is actually going to need to spend some money on, you need to obtain an actual commitment as to where and how often your property will be advertised. This includes online newspaper advertising. Remember the majority or buyers use the Internet to search for property. Online newspaper advertising is a great vehicle to use. In most of the major newspapers it only costs about a dollar per day. So an excuse not use exactly what will cover your market is not acceptable.

 The reason that you need an actual commitment is that the larger offices have set papers that they use because they buy their online newspaper listing space in bulk. They save money by limiting their ad placement to these certain publications. If your property is not located in the particular marketplace where their set bulk buying relationships are it does you little good. An ad in the Wall Street Journal might be impressive but is it really a draw for your property?

 You as a seller need to prepare ahead of time and seek out which newspapers, large and small, serve your market area the most effectively. If you are not sure which newspapers cover your area then a good comprehensive source to start with is www.newspapers.com.

 

At listing time it is only appropriate for the Seller to demand that an advertising schedule be established and agreed to ahead of time.

 

 

 

Have you ever wondered why so few Realtors attend open houses?

 

 

The Multiple Listing Service system was established and operates under the premise that any member agent has the equal opportunity and access to sell the listing of another Realtor.

 

Once a listing is placed on the Multiple Listing Service it becomes every Realtors inventory.  Every Realtor can sell that property regardless of whether or not they are familiar with the owner.

 

If all the listings on MLS become common inventory for all realtors then this would seem to suggest that every realtor has the responsibility to personally educate themselves about each and every property in their respective territory.

 

This is necessary for several reasons. First, they need to know their inventory. Any good salesperson will intimately know what they have for goods to sell. A car salesperson may have several dozen vehicles of the same make and color to sell but will know the difference about his or her inventory and be able to show a buyer the top of line model with all of the available options or a base model that fits within the buyers budget. 

Secondly, every piece of Real Estate is unique and cannot be judged from afar. This even applies to realty such as condominiums that seem the same. The units might be identical but the owners and how they choose to live will always be different. If the owner in unit “A” has 14 cats and the tenant on unit “B” has no animals then the condition between the two units are definitely going to be quite different. No one can know the exact nature of a property unless they experience it first hand. The third reason is obligation. If a Seller allows all Realtors equal access to sell their property and to be potentially well compensated for this opportunity, they are morally and professionally obligated to know just exactly what they are trying to sell.

 

To do the Seller justice the Realtor needs to know the exact nature of the property before they attempt to show the property to a Buyer. This prior knowledge will help the Realtor return with the right buyer to a property because the Realtor can actually explain from a base of knowledge that is far greater than a simple description on a listing sheet.

 

If Realtors choose to participate in the collective sales effort known as The Multiple Listing Service, laziness is not an excuse for becoming familiar with each and every parcel of Real Estate in their respective sales areas. Open houses are a perfect, easy and effective way for realtors to serve the Sellers and become familiar with their shared inventory.