Peter, my thinking on this matter is that of a "deep generalist." Today I believe there is value in thinking from such a perspective. From a generaliat and globalist thinking perspective there are many ideas and concepts that formulate any given snap-shot of the real estate industry. Since power today is bought and sold like a commodity, those without organizational power (concentrated money) seem left out of decision making leading to a skewed power curve.

The internet, on the other hand, is a powerful decentralizing force. Centralized bureaucracies, governments, and business lose power as it flows to individuals. Therefore those who attempt to centralize power in the internet age are inviting failure. The centralized bureaucracy of NAR and centralized websites like Realtor.com and HomeAdvisor.com attempt to capitalize on agents by centralizing listings, but these are ultimately doomed to fail. From my perspective centralized actions must be viewed as extreme and out of character in the decentralized internet age. Therefore it seems to me, one extreme invites the other, i.e., unionism. Life seeks harmony and a balance will be achieved. Our Canadian friends are responding to those misplaced centralized forces and seeking balance through unionism.

Continuing the idea of decentralization, who is more important. From a decentralized thought process the consumer is first, the agent is second, and the broker is third in importance.

The application of purist free market thinking is not valid in America. We live in a mixed economy where money buys power and power buys more money. Corporate welfare in America is enormous. Corporate government is on the rise and agents are currently powerless because NAR represents the interests of Brokers. Therefore in the interests of harmony and balance unionism will probably rise, and agent power will rise either through unionism or private agent organizations. Your question, "Could a union brokerage charge more than a non-union shop," is a good one and the answer is not more but an adequate commission rate, because governments and industry cannot move US housing to third world countries. It is a local service industry and must be dealt with in America. Historically discounters have failed to remain a viable business model long term. Therefore it seems to me that non-union shops must live by the same external economic forces as do union shops. Whether union shops can muster visions that are superior to the traditional shops is an open question.

Brokers must wake-up to the reality that agents are their most important resource and quit abusing them by continuing to attempt to grow by increasing the number of agents instead of increasing the quality and productivity of agents. The market has set the value of agents and those brokers who cut commissions without corresponding productivity increases will not survive. From this agents perspective, technology has increased my ability to service customers but at an increased cost. I have not yet seen the productivity increases resulting from technology that would allow me to cut my commissions below a level that it takes to make a living and provide the services that consumers are demanding. So there needs to be a counterbalancing perspective that brokers have failed to address. The venture capital rich internet innovators who have not done their economic homework have created in the public mind the idea that there is a "free lunch," in the real estate industry, that in reality does not exist.

Given these snap-shot perspectives, unionism may not only be viable but may thrive in the current American real estate business environment.

In all liklihood this process would lead to a split among agents. Some would unionize and others would remain loyal to NAR. This would ultimately reduce the power of NAR relative to agent power.

I do believe that brokers could correct this imbalance of power by changing NAR to be much more responsive to agent needs, and especially by openly assisting agents at the local level by respecting them and moving away from the body-shop mentality held by most. This would have the effect of limiting the appeal of unionism as well. Do brokers have that level of foresight? To date, it does not appear so.

I personally am associated with a very fine broker who seems to understand the new realities and provides the kind of leadership that benefits agents and therefore benefits the broker. Unfortunately this quality of leadership is in scarce supply.

In conclusion I believe that biological inertia plays a central role in the limitation of and pace of change. The technological determinists have overshot their mark. Agents will remain central to the transaction and the costs of technologically provided services demanded by consumers will offset any significant commission reductions. New models will be presented primarily for meeting marketing and market share goals and will not markedly change the economics that currently exist in the business long term. Efficiencies will be applied in a limited way to maintain profit margins. Agent centric models will thrive. Agents who apply new communication models such as "Competitive Intelligence," will do better than those who do not. Unions will play a role equal and opposite to the centralized efforts of real estate companies and organizations. Those who join unions will make a living but not be the top producers of the industry. The online vulture culture of centralized sites will give way to decentralized sites with local innovations such as broker reciprocity. Innovative agents will design and apply technology in affordable and sensible ways not now being provided by industry outsiders. Broadband applications will greatly accelerate the pace of change and those organizations, companies, and agents who are inline with the decentralized architecture of the internet will profit from change. Industrial age leaders will fade at the same pace that internet age leaders emerge. Creativity will become the currency of the present. A balance of power will be restored. Licensing laws will change allowing agents to become fiduciaries not functionaries. The centralized invisible fist will have failed, and the invisible hand will continue to function with increased efficiency, all of this in the midst of the traditional feather filled environment.

Thanks Peter for the chance to offer my little scenario.

Respectfully Submitted,

Sam Valenti
St. Charles Missouri