I really like Clark Howard. He has my dream job of being a consumer advocate. How cool would it be to bring the hammer when exposing on scams and ripoffs? Even further you get to talk about it on a national radio program.
The Clark Howard Show seems to have an issue with the real estate industry, but is not hearing all sides. Normally, Clark Howard fully investigates an issue to present varying points of view, but it seems as if he's not understanding the National Association of REALTOR stance on certain topics.
'DISCOUNT' MODELS ARE LUCRATIVE
Price-fixing is a federal crime under antitrust laws, so we REALTORS take it seriously. I'd like Clark Howard to add me to the list of agents who welcome varying price models. I even have my own flexible commission program that works for my business.
Remember that discounted services do not mean FREE even if the ad says it.
- It's marketing and is meant to lure sellers. If their discounted services aren't working, the broker will upsell you to a different model.
- You may pay less, which is good if that's your goal.The problem is when a consumer could have paid less by selling their house faster despite the upfront price seeming higher at the time.
Discount companies are not necessarily altruistic. I'm not saying they are bad. They are in the business to make money and this is a model that is catching on.
- Yard signs are free advertising. The more you have, the more sellers and buyers you get.
- Even if I place a sign in a yard and put it on MLS for "free", I'd still make money from the additional traffic. The issue is if agents do not give a solid marketing effort to get the home sold, which can be an issue in any pricing structure, but some may think it seems a little more rampant in discount companies.
MINIMUM SERVICE LAWS
Due to abuse of the discount model and
general sloppiness of some (even full service) agents, a handful of
states passed what are called "minimum service laws". Clark thought minimum service laws were antitrust, which is main bone of contention for him.
Minimum service laws defined the base services that brokers must provide to present a client. The need for this law occurred because some agents and brokers would "disappear" once they placed a sign in a yard and the home on MLS. This was not seen as "res presenting" sellers, so the law was passed and applies to all companies, even full service brokers who do the same thing.
By Texas law, ALL agents must:
- Present offers to your client.
- Answer their questions.
- Negotiate if they ask you to.
Is that antitrust or just extremely basic customer service? I agree with Clark that there should be competition in the industry, but I'd also want to make sure that both full service and discount companies did the best job they could for the seller. Professional agents just want sellers to get the full representation they deserve, regardless of how much they pay.
REALTOR versus Real Estate Agent
Clark's page on Real Estate Discounters.
Read more...Is the National Association of REALTORS the big, bad wolf?
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