quote:

---

Dear Editor:

As a Realtor, a licensed real estate broker and a member of several multiple listing services, I am disturbed that the Missouri Association of Realtors is lobbying for legislation that hurts real estate consumers in the name of consumer protection. It is disturbing that legislatures in at least three states have passed or are seriously considering legislation designed solely to protect those who want to prevent consumers from having a choice. Thankfully, we do business in Washington, a state in which the legislators, the Department of Licensing and the multiple listing services are more enlightened. Washington's property owners are better off as a result.

The only problem we see is that some members of the industry don't want healthy competition, and they are trying to manipulate legislatures and multiple listing services into protecting their $60 billion anticompetitive cartel. Those who lobby for this type of legislation (using my dues money) are stepping right into an antitrust and class-action mess that the Department of Justice and prominent legal firms are already studying.

So what are the problems? Our customers sold more than $100 million of homes in Washington in 2004 and none of them filed a complaint against us. In fact, our customers are our best salespeople, as witnessed by the fact that most of our business comes from repeat customers and referrals from past customers. We say what we do and do what we say, and our customers know what to expect from us. We do a better job than full-service brokers of disclosing to our customers the nature of our relationship and responsibilities. We are regulated, and we fulfill all of our responsibilities under state licensing law.

Our advice to Missouri and other states is, "Compete, don't legislate!" We will thrive or fail based on our merits, and the public doesn't need protection from us. Don't just take our word for it. We publish our results and hundreds of unsolicited letters on our Web site, and you can see for yourself what the people of Washington say.

Chris Nye
Owner/broker
MLS4owners.com

Dear Editor:

Your headline, "Missouri moves to restrict limited-service real estate," might be better titled, "Missouri moves to restrict consumer choices." Brokers and agents for firms that do not offer discount business models and do not want to compete with firms that do will benefit from the requirements for minimum levels of service, which provide that brokers and agents must assist in all aspects of purchase offers and counteroffers. On the other hand, consumers who would prefer to pay reduced fees and forego some levels of service, as well as brokers and agents who wish to offer that business model will suffer. Limited-service businesses might have to charge clients more for services they never requested as a result of the rule that was proposed in Missouri.

If there are problems with limited-service arrangements they can be resolved through mandated disclosure rather than mandated service requirements. That route would preserve consumer choice and enhance competition among business models, allowing those models that best serve consumers' interest to flourish. This makes more sense than trying to preserve another real estate dinosaur.

Bruce Hahn
Chairman
American Homeowners Grassroots Alliance

---

quote:

---

The new rule specifically addresses limited service in The Texas Administrative Procedures Act, under Section 535.2 -- Broker's Responsibility. The proposed rule changes are signaled by italics.

(a) A broker is responsible for the authorized acts of the broker's salespersons, but the broker is not required to supervise the salespersons directly.

(b) A real estate broker acting as an agent owes the very highest fiduciary obligation to the agent's principal, and is obliged to convey to the principal all information of which the agent has knowledge, and which may affect the principal's decision. A broker is obligated under a listing contract to negotiate the best possible transaction for the principal, the person the broker has agreed to represent.

(c) A broker is responsible for the proper handling of escrow monies placed with the broker, although the broker may authorize other persons to sign checks for the broker.

(d) In negotiating for his or her principal, a broker shall provide the following services:


1: accept and present to the principal, offers and counter-offers to buy, sell, or lease the principal's property or property the principal seeks to buy or lease;

2: assist the principal in developing, communicating, and presenting offers, counter-offers, and notices that relate to the offers and counter-offers; and

3: answer the principal's questions relating to offers, counter-offers, and notices.

(e) Under §1101.652(b)(22) of the Act, a broker may not negotiate or attempt to negotiate the sale or lease of property with a principal with knowledge that, the principal is a party to an outstanding written contract that grants exclusive agency to another broker. Under §1101.652(b)(27) of the Act, a broker may not aid, abet, or conspire with another to circumvent the Act. A broker who represents a principal under a listing contract that grants an exclusive agency to the broker may not instruct or authorize another broker who represents another party in the transaction to negotiate directly with the principal.

(f) When a broker delivers an offer or counter-offer to another broker, the broker is not negotiating or attempting to negotiate, with a principal he or she does not represent by delivering a copy of the offer, or counter-offer to the principal he or she does not represent so long as, the broker representing the principal consents to the delivery and the broker who makes the delivery does not discuss or attempt to discuss, the terms or conditions of the offer or counter-offer with the principal he or she does not represent.

---

quote:

---

Congratulations to the Texas full-service brokers who finally got their way. Flat-fee listing brokers must now offer "negotiation services" per the state law. These brokers will surely find ways to provide such services in an even more efficient and economical manner than full-price brokers who have ushered in these license laws to "protect the consumer." Consumers with few other low-fee options will flock to these new discount-service providers, that they unintentionally created, in ways you cannot have imagined.

Corey Scholtka
BuyHomes.com LLC

---

quote:

---

Where did the Texas minimum level of service law come from? The whole point of laws created by licensing agencies is to protect consumers. How is bundling consumer choice protecting them? Negotiation was always available if a consumer wanted it. All they had to do was choose a Realtor that provided it.

Now that it is mandatory in Texas, the following things will likely happen:

1) Discount/flat-fee brokers may slightly raise their fees but not much. This will hurt the consumer but won't drive listing fees anywhere near the range of high-priced brokers so discount/flat-fee brokers will still remain attractive to do-it-yourself sellers.

2) Transactions will take longer because discount/flat-fee brokers will demand that all negotiation be put in writing and simply forward it electronically. Previously, the buyer's agent had permission to negotiate with the do-it-yourself sellers directly.

Nothing will change except that educated sellers who have the skills to negotiate on their own will be forced to take a negotiation service that they don't want.

Just another anti-consumer law. Nothing more!

Derek Eisenberg
Continental Real Estate Group Inc.
Hackensack, N.J.

---

quote:

---

Department of Justice (DOJ), the enforcement arm of the Federal Trade Commission (FTC), has informed the Texas Real Estate Commission (TREC) and the Texas Association of Realtors, according to sources, to back off its new rule requiring limited-service brokers to provide a minimum level of service to buyers and sellers of homes.

---

quote:

---

The downside is that brokers must depend on one another to help sell their homes, and that discourages them from undercutting each other's commissions.

While boycotting the listings of discounters is generally considered an antitrust violation -- if undisclosed, it's also a breach of fiduciary duty to clients -- industry insiders are well aware that boycotting goes on, even if they claim not to condone it.

---

quote:

---

Under the legislation, brokers involved in real estate transactions would be required to receive all written offers, counteroffers or other communications concerning a transaction, present all written offers and counteroffers in a timely way, and keep consumers informed about the transaction, among other responsibilities. That means discount brokers who offer the option of purchasing only a listing service, would have to provide and presumably charge for more representation in a real estate deal.

---

quote:

---

"Once (a) law is enacted," wrote Janik, "neither the DOJ nor the FTC can successfully challenge the law" -- even if the agencies believe it may be anti-competitive. "A regulation of a state real estate commission cannot be found to violate the antitrust laws as long as the regulation was issued pursuant to a policy clearly articulated by the state legislature to displace competition with regulation by a state agency. Thus, if a real estate commission adopts rules that carry out real estate brokerage policy set by the legislature, an attack on that rule by the DOJ or FTC should fail."

---

quote:

---

the residential-real-estate industry 'is already highly competitive' and that 'a broker who works long and hard to get listings should not be forced to share them with all of his competitors.'

---

quote:

---

The "issue boils down to whether a listing agent can effectively claim ownership rights to a home listing, deciding where and when it can be displayed on the Internet, for the duration of the listing contract, which usually runs between 60 and 90 days,

---

quote:

---

it is in the Realtor's best interest to reach a settlement with the government as soon as possible following a meeting with Justice Department lawyers this week.

Janik said the revised rule, to be taken up shortly by the NAR board, likely would be an all-or-none choice.

---

quote:

---

"It's preposterous that a USA Today reporter would have to share his notes and stories with all his competitors," suggests Powers. "He should imagine that when he hits the submit button to his editor that it also goes out to the Wall Street Journal, Time Magazine, and all his other competitors. And that when they post his story, he has to pay them for advertising his story!"

---

quote:

---

The First Obligation Of the Real Estate Agent
A real estate agent has the fiduciary obligation -- if not the legal duty -- to secure the best price for an individual who has retained the agent to sell a home ["Realtors' Web Rules Draw
Antitrust Inquiry," Business, May 10].

Typically, the best price for a home is obtained by making its availability known to as many potential buyers as is practicable.

By closing out the Internet and alternative markets, the National Association of Realtors effectively states that the first duty of real estate agents is not to their clients but to the
agents themselves.

JEFF HOOKE

---

quote:

---

The amended Oklahoma legislation provides that brokers who provide services in a transaction must be available to receive all written offers and counteroffers, reduce offers or counteroffers to a written form upon request of any party to a real estate transaction, and present timely written offers and counteroffers. The amended bill eliminates previous language that would have required transaction brokers to keep their clients fully informed regarding the transaction.

The amendment also adds language stating that if a transaction broker "intends to perform fewer services than those required to complete a transaction, written disclosure shall be provided to the party for whom the broker is providing services. Such disclosure shall include a description of those steps in the transaction for which the broker will not perform services, and also state that a broker assisting the other party in the transaction is not required to provide assistance with these steps in any manner."

The proposed law would still prevent companies from offering a property listing in a multiple listing service for a flat fee while offering no other services to the home seller.

---

quote:

---

With the growth of discount brokers, the original decree’s ban on advertising commission rates now has the effect of restricting legitimate advertising of commissions. The Department of Justice, therefore, seeks to eliminate the decree’s prohibition on advertising.

---

quote:

---

The South Dakota Real Estate commission, prompted by a U.S. Justice Department investigation, has lifted rules that restricted the offer of real estate rebates and other inducements in the state.

---