A few questions about SourceMLS

The post entitled What is a Listing? that went online 9/17 both on my blog and on Notorious R.O.B. drew a few public comments and more than a few private email messages.  Most of the email started off with variations of, “Don’t use my name or even mention you received this message, but . . .”  It seems there are a lot of people out there who have comments and ideas on this topic, but are afraid to voice them in a public forum.  Gosh, I wonder why.SourceMLS Logo

However one brave soul allowed me to use his letter so long as I didn’t identify the source.  I think I cleansed it enough to erase any trace back info.  Here it is.

I want to comment on SourceMLS. I’m relatively new and uninformed on many of these topics especially when compared to the veterans of CMLS, so to say I had to read and reread this multiple times to grasp the concepts is an understatement; which I found ironic itself, understanding the confusion. It is very possible I’m missing something which will make what I’m about to say sound very stupid but since this isn’t a public forum I’m going to risk embarrassment.

My question doesn’t actually pertain to the details and definition you discussed but rather what doesn’t make any sense to me is how this program/badge and initiative is going to be a catalyst for change and awareness for stale data and outdated listings? My understanding is if a site WANTS (perceived incentives to follow) to display this badge they need to, among other things, make adjustments to how they display and update listing data to try and comply with the terms of the program, some of which sound seemingly arbitrary. At this point, as you stated, CMLS decides if the website in question is “reasonably acceptable” to join the program. After going through that process, congratulations, you can display the (rather uninspiring) SourceMLS badge? The description of which (as it appears on the WAV Group site) is

“In effect, the SourceMLS initiative will act similarly to the way that the IDX disclaimer works today on your broker website. The principal difference is that your participation will play a role in supporting the industry with developing a professional real estate branded seal that consumers will grow to recognize and trust. Moreover, third party websites will not be able to display the seal unless they conform to the Terms of Use for participation.”

They compare it to IDX disclaimers displayed on websites. I’m just guessing now but I would be shocked if you asked 100 people who have looked at real estate online if they have read or even noticed the IDX disclaimer. It appears to me that the success of this program rests on websites applying to this program and updating their websites. The incentive for doing this, aside from having a better functioning website, is to be able to display a badge to users on your site, presumably you can also advertise that your site now has the badge and is compliant to this program vowing to only show fresh listings to attract more users to your site. Will the average user ever notice, care, or even understand what the badge means enough to dissuade them from using sites that don’t display it? Is this badge more meant to be symbolic like a yellow “live strong” braceletLivestrongBracelet that raises money and awareness for cancer, in this case brokerage websites standing together raise awareness and hopefully abolish stale listing data? I don’t see how this will help brokerage and MLS sites become more competitive? This is confusing on so many levels but I don’t want to start rambling in my email, hopefully I haven’t done that yet and my confusion/question is coming across clearly.

Apologies for the long email but I figured I would share the thoughts your blog posts elicit. (end)

Sue Adler and Rob Hahn created the event series Hear it Direct which stages panel discussions with consumers to give “real estate industry professionals stunning insight into the mind of their clients.”  If you haven’t been to one, I’d highly recommend it.  Often we “insiders” spend so much time talking to each other that we forget there’s a whole world of “outsiders” who often have the clarity of thought to pose tough questions we totally overlooked by being so deep in the weeds we can’t get out of the swamp.  This email was a prime example.  The author is not an MLS CEO, not a broker, or agent, or mortgage officer.  The author is engaged with all of those types of people and is a keen observer of the industry into which he has cast his fate.

So, to the planners of the project and authors of the rules of the program, I paraphrase the following questions from a member of your observing public:

  1. What is the real purpose of SourceMLS?
  2. How this will help brokerage and MLS sites become more competitive?
  3. Is SourceMLS more symbolic than literal?
  4. If you achieve the mission of creating a “branded seal that consumers will grow to recognize and trust” what do you expect the consumer to trust that brand to mean?
  5. And the $64,000 question, do the MLSs promoting SourceMLS really expect the badge will achieve enough notoriety and reach hallmark status so as to dissuade consumers from using sites that don’t display it?
  6. And if the answer to 5 is yes, what’s the budget and the anticipated schedule for that promotion? (More than $$64,000 I suspect.)

If there are no solid answers for these questions, perhaps someone should send them to Sue Adler and ask her to query her next panel for their thoughts.  I look forward to hearing those answers.

For this post:
Cause: 
Inquiring minds want to know
Effect: 
Out of the mouths of babes

Miscellanea 927

Brian Boero, 1000 Watt Consulting, has blasted out his miscellaneous thoughts called Friday Flash for quite a while (highly recommended). I like that name, but since it was already taken, and since I’m cautious about over-committing to a schedule I’m not always able to maintain, I need a new name without a time constraint. Possibilities: Intermittent Items. Sporadic Stuff. Serendipitous Subjects. Random Run-ins. Still thinking on that one.

– – – – – – – –

One of the advantages of working for yourself is you have a lot of time on your hands. Hours and hours spent sitting in an office “at work” pretending to be productive simply by keeping your eyes open and glued to a computer screen are now available to accomplish softer tasks – things like reading and thinking, and imagining. I love it. In reading many news sources, I sometimes hit two or three articles that seemingly on close examination have no relevance to each other, but from the higher level view they might. While none is of sufficient interest to warrant a full blog post, collectively they make for some interesting (I hope) thoughts. As I come across those from time to time, I’ll pass them along here.

In a Washington Post article this week on carbon nanotubes and super-miniature computers, scientists have been successful in creating a working computer so small you could fit 40 CPUs on Franklin Roosevelt’s head on a dime. If you share my wonderment that today’s smartphone has a more powerful computer than the Apollo 11 spacecraft that put Neal Armstrong on the moon, you’re also thinking that our pocket pals couldn’t get any smaller or smarter. You, as am I, would be wrong.

On the Time magazine cover this week is a question – Can Google solve Death? Followed by a subtitle, “the search giant is launching a venture to extend the human lifespan. That would be crazy – if it weren’t Google.” So the progenitor of driverless cars is now striving to become the Ponce de León of cyberspace and not discover but create the fountain of youth.

Lastly, news from the University of Washington that Microsoft co-founder Paul Allen is funding a project to advance computers that connect brain to spine in paralysis victims. The device could recharge wirelessly at night (sleeping on a coil-imbedded mattress). How big? See item #1 above.

Ear on mouseI’ve long been convinced that if I live just ten more years I will live forever. Between replacement parts (knees, hips, shoulders), growing new body parts in petri dishes or on mouseback , and robotics (Afghanistan and Iraq wars may not have done much for world peace or the national debt, but they did accelerate research into replacement parts for limb blown away by hidden explosives), about the only thing we couldn’t survive would be the proverbial ‘hit by a bus’ problem.

Based on these three stories, I’m starting to rethink my 10-year time horizon. Could be less.

– – – – – – – –

Speaking of cars, this article over on the Tech Dirt blog is worth noting. Consider this opening paragraph, which I have altered (three yellow highlights) to remove the identity of the players or the industry:

MLSs have been dealing with disruption just about as well as any other legacy industry has. Instead of attempting to compete, MLSs have chosen to respond to web portals refusal to cut them in on the middleman action by throwing up as many regulatory roadblocks as possible. Sadly, this antagonistic attitude toward both their competition and the home-buying public somehow makes sense to them, and they seem very willing to bury both the upstart and their last remaining shreds of goodwill at the same time.

The article is NOT about real estate brokers or MLSs. But it seems that the protectionist philosophy is not unique to the world of real estate data managers. Check out the link to see who they’re really talking about. And then ask yourself, where on the “most trusted professions” list do those folks rank relative to your position? And where should you rank?

– – – – – – – –

And lastly, keep this Tundra© cartoon in mind the next time someone says that your MLS or Association needs to be nimble, make quick decisions, and develop new ideas with the dexterity of an internet startup.

Wolves eat deer by committee action

Even with all good intentions, you’re still running by committee.


For this post:
Cause: Odds and ends hanging around
Effect: Three ideas do a blog post make

 

 

Zillow Strikes Again

On the newswire this morning was a press release announcing the broadcast of an interview with Senators Bob Cocker (R-Tenn) and Mark Warner (D-Va) conducted by Zillow Chief Economist and all-round trend prognosticator Dr. Stan Humphries. The senators are co-sponsors of co-sponsors of Senate Bill 1217, the Housing Reform and Taxpayer Protection Act of 2013 which seeks to replace Fannie Mae and Freddie Mac, the two government sponsored enterprises (GSE) that were deeply embroiled in the housing crash of this past decade. Their bill would completely replace F&F with a new system of regulations designed to prevent future housing bubbles and crashes.

Casey-at-the-BatTo my thinking, this discussion is hugely important to the future of the housing industry. But who is holding it may be as significant or more so in the minds of some. Remember back in August when Zillow hosted a housing conversation with President Obama? Remember the uproar from the REALTOR membership asking why their trade association wasn’t involved? Multiple questions of “Why Zillow and not NAR?” led to the release of an excuse document, called a “Special Report” by NAR explaining that this wasn’t a real serious discussion on housing policy but just a “chat” sponsored by a “housing entertainment website.”

Well, guess what! Things are getting entertaining again. This time Zillow has snagged the two named sponsors of one of the most significant pieces of legislation pending before the otherwise do-nothing congress. And once again, NAR is nowhere to be seen in the discussion.

In pooh-poohing the Obama interview, NAR contended that one of the main reasons they were not involved was because NAR is often at odds with the Obama Administration over housing policy. To quote from NAR’s Special Report, “Our defense of issues that directly impact Realtor® business and the ability of Americans to own and invest in real estate sometimes contrasts NAR’s positions with those of the administration. Because of NAR’s leadership in the advocacy arena, our sources tell us that the White House did not want to get caught in a conflict of interest with us.”

But no such conflict of interest exists between NAR and DC over GSE reform. In a position paper published by NAR, the REALTORS support Senate Bill 1217 stating,

In the Senate, S. 1217, the “Housing Finance Reform and Taxpayer Act” (Corker R-TN; Warner D-VA) offers comprehensive reform of the secondary mortgage market but maintains a government guarantee. Though there are issues that remain to be addressed, NAR is supportive of this bipartisan approach which will accelerate the conversation necessary to reform our housing finance system.

So, without the potential conflict of interest, why is Dr. Humphries, not Dr. Yun, hosting this discussion? While the tape of the discussion hasn’t been released as of this writing (it’s due out tomorrow morning), I doubt NAR can play the same trump card as last time. This isn’t merely a chat done for entertainment purposes. This issue needs a serious policy discussion and supportive action by the leading home ownership lobby in Washington. Seems to me this would have been a perfect opportunity for NAR to seize the moments following the first Zillow interview and line up the senators for a follow-up conversation. That didn’t happen. There was no carpe in NAR’s diem schedule.

Here’s one final suggestion for NAR: host a serious discussion of tax reform, specifically the mortgage interest deduction (preservation of which NAR strongly supports) before Zillow goes three for three – and takes all the joy out of Mudville.

For this post:
Cause:  Fool me once . . .
Effect:  Fool me twice . . .

~bb

This post also appears on Notorious R.O.B.

What is a Listing?

I’ve been invited to speak at CMLS on the topic of what MLSs should do to help brokers make smart decisions about syndication.

The invitation is surprising for a couple of reasons:  I’m no longer in the MLS business nor do I work for a recipient of said broker syndication efforts and decisions.  Also, after I left Zillow I swore to myself (out loud this time) that I wouldn’t get involved in rehashing this old topic yet another time. I personally have attended multiple funerals for that dead horse (Cause of death:  multiple beatings) and do not look forward to waking another.

deadhorse1

But of course I accepted the invitation because I’m a glutton for punishment.  And lately some thoughts have occurred to me, more often now that I’m no longer under the influence (figuratively as well as literally speaking) of either of the two polar opposite positions in this debate – MLS gatekeeper or national real estate portal.

In an uncanny coincidence of timing, details of the long awaited SourceMLS™ branding initiative from the Council of Multiple Listing Services (www.cmls.org) was unofficially unveiled this past week through a posting by Victor Lund on the WAV Group blog. I say “unofficially” since there was no similar announcement on the CMLS or SourceMLS websites, but since Marilyn Wilson (the “W” in WAV) serves on the CMLS board I presume this post had CMLS blessing.

SourceMSourceMLS LogoLS has been over a year in the making and members have been receiving updates on its developmental progress since early in 2012.  SourceMLS was developed by MRED and Russ Bergeron and licensed to CMLS for their exclusive use with their membership and selected vendors. SourceMLS intends to identify listings and websites, either broker or third-party, who receive listing data directly from an MLS and who agree to treat that data according to the guidelines established by CMLS.  The intent, of course, is to rid the web of stale, outdated, old listings that are no longer active but appear to be so because the source of the listing hasn’t keep up with the recommended maintenance.

 

In comparing the WAV post, the CMLS Guidelines document, and the Trademark License, I found some significant differences and have multiple questions about which version is actually applicable.  But in trying to compare and contrast them for this post so I could properly relate the concern back to the applicable language that generated it, totally I confused myself.  So I’ll hold those questions for another time and another post.

Looking at the program in general, most of the provisions and requirements are pretty benign, but some of them seem to be designed specifically to get national websites to change not just their display practices but their core business practices.

One item which caught my eye was the provision that CMLS would have approval authority over any vendor who applied for licensure under the SourceMLS program. The language in the official guidelines document reads as follows:  “The Listing is displayed on or through a real estate information site or service that is reasonably acceptable to CMLS.”  (emphasis added)

While this may on its surface seem innocuous, it does offer CMLS literal veto power over any application that it feels is not in keeping with the high standards set by CMLS for listing display. Those standards are not identified or enumerated.  I’m sure CMLS will use this authority judiciously, but the fact that this provision is included in the guidelines and thus embodied in the license agreement by reference gives one pause to consider whether CMLS is either (a) overstepping the authority granted to it by the MLS or (b) creating an opportunity for arbitrary and capricious disapproval of any application by any website that CMLS feels is not acceptable but can’t find a specific rule that would justify denying the application.  Such an action may run afoul of regulations or even law since the protocols for such a review and decision have not yet been established.  Given the contemporary mood in MLS circles to want to “take back our data” this provision should raise questions in the halls of those non-broker websites who want to continue to use listing data from an MLS, but who must now conform to some unpublished standard of conduct to be “reasonably acceptable.”

The other interesting item is the requirement that states upon expiration or sale of a property the displaying website must remove that listing from the website (and potentially, or at least implied, from its database).  From the SourceMLS guidelines document:

If the Listing has been removed from active status, all listing content including but not limited to images, video and property descriptions have been removed from display within twenty four (24) hours of the Listing being removed from active status. If such Listing continues to be displayed, the listing broker name is displayed with the Listing.

(Let’s set aside for the moment the internal inconsistency between the first and second sentences of this paragraph.  In the first, one must remove the listing. In the second, if you can’t comply with the first – removing the listing – then show the broker’s name when you display it in contravention to the first sentence.  Huh?)

In order to comply with the requirement to remove the listing, it seems necessary to agree on a definition of what a listing is. We in the industry have used” listing” rather generically over the years to describe a property data record within the MLS database, as in the whine, “They’re taking our listings and selling us our own leads.”  In fact, a listing is technically a contract between the seller and the broker retained to sell that property. When a broker or agent says, “I have a new listing” she doesn’t mean I just created data record. She means I have a contract granting me new authority and responsibility to market this property for sale.  Yet we use “Listing” as it was used in the second sentence of the quoted text above:  “If such Listing continues to be displayed…” does not refer to the contract being displayed, but instead to the listing data record.

So what is it that’s to be removed when a listing comes down?  The price and pictures, and prose.  Three p’s.

What is a listing?

CMLS, and they’re not alone in this interpretation, sees “listing” as something physical, an object that can be passed from one person or site to another, perhaps something that can potentially be monetized because it has value (although the value is debatable and difficult to quantify, as Todd Carpenter noted recently).

But a listing record is not a singular object.  The listing record is composed of two essential elements:  the facts and the fiction.  Facts remain unaltered by virtue of a contract to sell a property.  CoreLogic has them.  Data Quick has them.  RED has them.  The facts include size, age, rooms, bath and bed count, property size, taxes, school district, nearly every physical description of the property.  The fiction, those parts made up by the broker and the seller to flesh out the offering of the property would include list price, agent’s remarks, and photos, perhaps virtual tours, special offers, bonus commission offering.  All are subject to change and updating without affecting the core elements of the property record.

So what does CMLS mean when they say remove the “listing content?” The intent of this provision is to require that a website no longer display data from the listing record that it received as part of its syndication feed. However, as has been noted in a couple of recent nationally prominent copyright lawsuits currently pending in various federal circuit courts, most of the information contained in an MLS data record is public knowledge, public information, or public records – facts, which are not copyrightable, rather than creative works which are.

What the agent adds in creating the listing record is minimal. Certainly there is a requirement to state that this property is for sale, and what status it is in.  There’s the list price, considered in some quarters to be the most copyrightable work of creative art in a listing record.  There’s some poetic narrative of original prose called Realtor Remarks (or Agent Remarks in those MLSs that allow non-Realtors to participate) which couldn’t be more worthless after a listing contract expires, so we shan’t waste any breath on its debate, now shan’t we?  And, of course, photographs.

On most national websites, nearly all of the data elements that are contained in what the industry perceives as a listing record are already maintained in a master database of property information. That database is populated with public records information AND with information about previous sales activity on that property – yes previous listings, from agents, brokers, or even homeowners who posted that data on the portal without the requirement to remove it when the house was no longer for sale.  So when a website receives a new listing record, much of the content in that record merely duplicates data elements that the website already has collected in its database.

When CMLS asks the website to remove the listing content when it is no longer on the market are they requiring that the website remove factual information that it had prior to receiving listing record? In discussing this with one MLS, with which I was negotiating a data license, the answer to that question was “If you got the information from the MLS, you must remove it.” But how can they prove that the bedroom count, the current taxes, and the lot size are all data fields that came from the MLS and not from public records?

Even with regard to photographs, some real estate websites combine photos from a separate data feed into the display of an active property listed for sale. These photos may be of higher resolution or more numerous and may be coming from a franchise or the agent herself.  They are offered because in many cases the MLS is not capable of storing and displaying extremely high-resolution photos, or restricts the number of photos it will distribute to syndicated websites under the delusion that a consumer will click over to the MLS or broker site to see the rest of the photos when in practice the consumer will just move on to the next property that has more photos. Often the outside-sourced photos are exactly the same picture, but sent in a hi-res format rather than the lo-res version the MLS vendor created to be able to store them efficiently.  So are those photos the portal received separately from the broker, not from the MLS, part of the “listing” or not? Indeed the mere act of substituting one set of photos for another may be in direct violation of another provision which prohibits the website from altering the listing data it receives from the MLS in order to qualify under the SourceMLS license.

Pictures and prose are part of the historical record and despite being removed from the active display they probably live somewhere in perpetuity on some archiving website like the Wayback machine.  Example from 1997: http://web.archive.org/web/19970102155412/http:/www.realtorads.com/

So back to the original question – what’s the meaning of “take down the listing?” It depends entirely on the definition of “listing.”  And even if we agree it means those portions of a property record that are original to and singularly associated with the listing contract in question, then taking down the list price (done anyway since the property is no longer for sale), any pictures that didn’t come directly from the MLS, and the Remarks should be sufficient.

So what’s the hubbub about?

I applaud the efforts of CMLS to address the ongoing issue of stale data and outdated listing displays.  It’s a formidable task, one that cannot be easily accomplished to the satisfaction of all quarters.  As with most new brainstorms, the devil is in the details. But I would encourage CMLS to examine the guidelines and license provisions that it has created for the SourceMLS program and make sure that they are (a) lucidly clear as to their definitions and intentions; (b) clearly understood and consistently explained to all parties to whom the SourceMLS program is being offered, and; (c) that the program is true to its mission of improving the quality of the data displayed on all websites and not subconsciously designed to undermine any particular website by making the rules of participation so onerous that no one will sign up.

I will be joining the CMLS panel at the upcoming conference in Boise, as planned.  I hope to see you there and hear your opinions on the SourceMLS™ project.

For this post:
Cause?  myomymyheadshurts
Effect?  Perhaps not the one intended

A Slight Tremor or Foreshock?

This post also appears on Notorious R.O.B.

An interesting article appeared in Inman News back in early July.  It might have gone unnoticed but for a reminder video they posted this past week.

It was coverage of a new brokerage, Suitey.com (pronounced “sweetie”), that opened this year in Manhattan.  In the video, one of the founders David Walker gave one of their reasons for trying a new brokerage model, one that not only offers discounts to sellers and rebates to buyers but also helps “consumers avoid some of the headaches that its founders say come with using a traditional broker.”

In the video, Walker states (0:44 seconds in), “One of the major problems with clients when they’re buying a home is their agent is actually incentivized get them into the most expensive apartment [that’s New York speak for “condo” or “coop”] possible.  Their compensation is higher when they (the buyers) pay more for their apartment.”

Brian Larson on Ending Cooperation and Compensation

In making this statement, David has resurrected an argument that has been bubbling on and off for years, going back to as early as 2006 when Brian Larson, noted former MLS CEO and now esteemed attorney in Minneapolis, penned a three part series entitled, “End of MLS as we know it” for Inman News.  (The links to parts 2 and 3 on Inman.com were broken, so if you want to read the entire series, go to LarsonSobotka.com.)  There were only a few comments from hard core blog readers and devoted MLS rules junkies.  After all, the MLS is an institution, as important a pillar of Realtorism as the three-way agreement and RPAC. How could MLS possibly end?  His redux publication of the series in 2010 got more notice. Perhaps more people had RSS readers by then.

Brian argues eloquently that “Interbroker compensation is an anachronism, and … should be eliminated.”  He summarizes all the good reasons for doing so, as follows:

Getting rid of interbroker compensation improves the market in several areas:

  1. Buyers and their brokers have more options for structuring their relationships and the compensation that will flow between them.
  2. Buyer broker fees can be commensurate with the skill and experience of the broker and with the buyer’s needs.
  3. Brokers do not have to fuss with the accounting details and conflicts associated with paying each other.
  4. The market benefits from price competition for buyer broker services.
  5. Buyer brokers working in transactions with FSBO or unrepresented sellers can obtain additional compensation for the additional work and risk they assume.
  6. The question of buyer’s brokers “rebating” commissions to the buyers becomes moot. There will be no compensation from the listing broker out of which any rebate could be made.
  7. The dangers of price-fixing, and the claims by industry watchdogs that it exists now, will largely be addressed. Brokers will really be unable to tell what their competitors are charging for services, and there will be no incentive for commissions to be “standard.”
  8. Buyer’s brokers can achieve the type of relationship of trust with brokers that support a claim to being “professionals.” When the buyer knows what she is paying for broker services and what she is getting in return, buyer expectations and broker performance are both likely to be more refined.

But Brian’s title belies the underlying contention that if we did away with offers of cooperative compensation, the MLS itself, at least in the form we now know it, would die or soon be replaced by something else.  It’s often been said that a large national consumer-facing real estate portal is “just one field away from being an MLS.”  But most are afraid to name that field, perhaps fearing that saying the words aloud would somehow make something horrible happen.  “Beetlejuice, Beetlejuice, Beetlejuice!

Why? Surely the MLS offers something besides compensation offers that make it unique and absolutely essential to the transaction of real estate purchases, doesn’t it?

Suppose an MLS wanted to structure a data agreement with a website, but saw that website as a potential competitor. So they included language that specifically voided the contract if the website competed with the MLS. What would that language look like?

A good starting point would be the MLS definition from the NAR Model rules, which specifies that a multiple listing service is:

  • a facility for the orderly correlation and dissemination of listing information
  • a means by which authorized participants make blanket unilateral offers of compensation to other participants
  • a means of enhancing cooperation among participants
  • a means by which information is accumulated and disseminated to enable authorized participants to prepare appraisals, analyses, and other valuations of real property
  • a means by which participants engaging in real estate appraisal contribute to common databases

Many (most?) national websites exhibit many of these characteristics already.  They correlate and disseminate listing information (and other info too); they enhance cooperation among parties (tools for agents and consumers); they offer means of valuing property (AVM or RVM), and they collect information from users for the common good (agent ratings).  The one thing they don’t do is convey offers of compensation between brokers.  That’s the unspoken missing field:  compensation; compensation; compensation!

Without it, the MLS becomes just another listing aggregator, no better and no worse than the others.  And without MLS, NAR has a much more difficult time defining its value proposition as anything other than a government lobbying organization with no compelling reason to induce practitioners to join, particularly if they are of the alternate political persuasion.

Cooperation and Compensation Hurts the Consumer

Carrying that theme to its logical conclusion, albeit with a healthy dose of hyperbole along the way, Greg Swann of Bloodhound Blog fame authored and collected a series of articles advocating the demise of inter-broker compensation and its associated MLS as a way of ending the tyrannical rule of the NAR.  But in doing so he clearly identified the core problem: coop compensation screws both the buyer AND the seller.

This is actually doubly insane. The person paying your agent to get you the lowest possible price for the home is the same person who is being paid by the seller to get the highest possible price for the home. You may start to think that you are getting screwed, having discovered that “your” agent is being compensated by the listing broker, but think about the poor seller: He is paying two brokers to pursue — at least in the abstract — antithetical goals. If you did a good job picking your agent, the seller will have paid the listing broker to pay your broker to pay your agent to frustrate the seller’s objective.

How could this possibly make sense?

The answer: It doesn’t make sense.

Over the course of the next year, others joined the chorus, from real estate broker to learned academician.  But as we know, in the end nothing changed.

Until perhaps now.

Here we have a broker, not an MLS executive, not a lawyer, not an academic, not a consultant, an ACTUAL broker working within the system, saying aloud what until now has been mentioned only in hallway conversations at MLS conferences and on blogs mostly written by insiders: cooperative compensation through the MLS hurts the consumer.

And we have seen with the rise of the national portals who built their enormous followings by delivering to the consumer something that the industry was unable or unwilling to deliver. Consumers speak volumes and will eventually get what they want, because someone will give it to them.  What remains to be seen is whether they will be equally vocal in demanding an end to the pain – the aforementioned “headaches that… come with using a traditional broker.“

For this post:
Cause:  My head aches just thinking about it.
Effect: Take two aspirin and call me in the morning.

-bb