| September 9, 2004 |
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In our hate-filled world, it seems only the most vitriolic messages get through. It's no longer give peace a chance, but give the angry a mike. While it's difficult to understand why people hate, it's baffling why they assign such feelings to the workers of whole industries. Like used car salesmen and attorneys, real estate agents are regularly vilified by the press and often treated with wariness and contempt by consumers. Individuals have become the faces of the industry, but it is the system that the press and consumers really hate. That system is designed to make money for participants, and the real estate industry, by anyone's definition, has been a roaring success with over 85 percent of marketshare for decades. Free-lance writer Douglas Gantenbein, author of a scathing Slate.com story "Realty Bites," is one of the many journalists and homebuyers who would like to bring the industry crashing down. In his article, he suggests a change to Shakespeare's line "let's kill all the lawyers" - to make it Realtors instead. Essentially Gantenbein believes that most real estate agents are overpaid, fail to represent their clients properly, and don't do the selling they are hired to do. He'd like FSBO's to take over the market, and for those who want professional assistance to pay only two or three percent to pay both sides. But it isn't his philosophy, but his death-to-Realtors attitude that got the attention of the National Association of the Realtors, sparking a point-counterpoint confrontation between Gantenbein and Walt McDonald, president of the NAR on CNNfn. NAR spokespersons said they wanted to make certain that Gantenbein knew that there is redress available to real estate consumers when they use a Realtor, or member of the NAR, and are unhappy with their results. Gantenbein used the opportunity to goad the old guard, represented by a greying McDonald. What makes Gantenbein interesting is that he represents a growing constituency which is openly venting frustrations at the real estate industry. While his examples of seller's agents who do more to beat down the price of listings than buyer's agents are egocentric, the message he wants to convey is that the industry could do a better job. "I don't hate Realtors," says Gantenbein. "I had some bad experiences, true, and I wrote about them. But I don't think the piece said a single thing that agents haven't heard before. And mainly I posed the question: Why are we still working with this very old selling/buying model? The Web helps buyers learn a great deal about a property before getting in an agent's car, in effect doing the agent's work. And prices are up, so commissions are up, too. Perhaps there are very good reasons to have agents involved, but not in the traditional way. In fact, says Gantenbein, he's even had good experiences with some real estate agents. "Appearances to the contrary, I really don't have an ax to grind," he says. "We've bought three houses through one Realtor in this town, and we think the world of Marie. Of course, that's on the buy side, which is always a lot more fun than the sell side!" Gantenbein is a free-lance journalist who also happens to be a real estate investor, hence the prolific number of buy/sell side stories he has to tell from personal experience. When he learned that home sales were heading for another record, and talk about discount brokers making inroads, and the listing rules that NAR is considering, he said he wanted to start a discussion about it. "The real estate transaction model is antiquated," explains Gantenbein, "and it doesn't work in the best interest of the seller or buyer. The buyer has a wonderful free service, and the price of the home should reflect the price of commission. The model used had its place - nowadays with the Web, it should be easy for a seller to purchase a spot in an MLS, upload photos, like the eBay model, and it should be easy for private parties to get on the MLS for a fee, and to show their house to any number of people. What is a problem is the monopoly of information by Realtors. A private party can't put a home on the MLS and you can't hit the key database it's impossible to do a transaction that doesn't involve an agent. It should be possible to purchase a place on the MLS, and attract people. "The technology exists," continues Gantenbein, "but if I were to look for home in my zip code, I should get email alerts, so my belief is the information is so widely available that it is easier for buyers and sellers get together. Certainly there is a need for a third party to help referee and oversee things, prevent fraud and so on. "My having been in several transactions," he says, "what I see is a lot of things like that are already being done by banks, title companies, and I'm already doing a lot of work on the side and those are flat-fee services. You can even hire an attorney at a flat fee. With all this stuff that is available, we are relying on a 50 or 60 year old model and commissions. We are no longer relying on travel agencies and stock brokerages to change the way they do business." "EBay is a model," admires Gantenbein, "but it shows how the Internet can be used to bring buyers and sellers together. And the seller is able to upload huge amounts of information and painlessly." "We don't need to have someone come to your house and take pictures - I can do a bunch myself, and if they want to use an agent, that is a different issue. My opinion is let's keep to current commissions and buyer pays half and seller pays half, because right now the buyer's half of the commission is invisible." "In my world view, the buyer and seller pay half the commission, it makes sense. My agent negotiates the price and I, the buyer, pay that price. To make it visible to the buyer so they know they aren't getting a free service. They are happy on the buy side," says Gantenbein. |
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