Part I: The Gavel Has Landed

The Oklahoma Supreme Court has denied a rehearing to the state's real estate commission in the case of Snider v. Oklahoma, ending a six-year court battle. As the dust settles, it's becoming clear that the fighting between exclusive buyer's agents and traditional broker-backed lobbies is far from over.

The Oklahoma Real Estate Commission had claimed that advertising material, handed out by Kenny Snider, a broker and owner of the Woodward, Oklahoma franchise for The Buyer's Agent was false and misleading and fined the broker $200. Snider refused to pay up and the case went to court.

The litigation began in 1993 when Snider began receiving cease and desist letters from the real estate commission. What got the commission's goat was something brought to its attention by Snider's angry competitors - traditional brokers who didn't want the public to know that a better mouse trap might exist for the consumer. Seems Snider was also pointing out that the only true agency was exclusive agency and that if a buyer went with any other kind of agent, particularly dual agents, they wouldn't be receiving full representation. Imagine the shock!

To stop this renegade, the commission went to the Attorney General to bring charges against Snider, who refused to pursue the case due to lack of any evidence of wrongdoing. Undaunted, the commission exercised its right to go to outside counsel, hiring one of the biggest law firms in Oklahoma City to bring Snider to heel. They got their money's worth. The $200 fine was upheld and Snider was told to stop distributing the booklet.

But that wasn't the end of it. What the commission hadn't counted upon was that Snider is part of a franchise, one with deep pockets. The Buyer's Agent, an exclusive buyer's agent franchise, has grown from a one office operation in 1989 to a 70 office organization in 26 states. Franchise owner Tom Hathaway and his staff legal team not only came to Snider's aid, but vowed to take the fight all the way to the Supreme Court. And they did.

"We have over $63 million in documented savings for our clients," said Hathaway. "We distributed the leaflet to our franchisees, so we take full responsibility. I was not going to let Kenny be a sacrifice."

Where the lower courts demurred to the real estate commission, the Oklahoma Supreme Court was unimpressed and instead decided to read the facts of the case.

To make a long story short, the Court not only reversed the earlier rulings, it sided in favor of Snider because he did indeed have proof that his organization saves buyers money. At the end of every transaction, all Buyer's Agent franchise agents have their buyers sign a savings sheet in which their savings are outlined in as many as eight categories - price of the home, the mortgage loan, homeowners insurance, closing costs, getting the seller to make repairs not required by home inspection, discounts from ancillary service providers, selling incentive kickbacks which are passed on to the buyer, and negotiations for items not part of the original contract. Used as a marketing tool by the company, much the same way McDonald's boasts billions of hamburgers sold, the savings sheets came in handy - the Court viewed them as affidavits from the buyers.

On the second count, the Court reviewed the commission's definitions of agency and slammed the commission for not knowing how to read its own laws, upholding an earlier 11-page decision by the Court issued June 1, 1999. The Court found "...that the statement in the booklet for which the appellant was sanctioned is neither false nor misleading. Sellers' agents and dual agents do not and cannot by law give a buyer the same degree of loyalty as an agent who acts on behalf of a buyer. ... A buyer who relies on the seller's agent or on dual agency does not receive the same degree of legal protection as that afforded by an agent acting solely on behalf of the buyer. Accordingly, we find that the order of the Oklahoma Real Estate Commission is clearly erroneous, contrary to its own rule, and without evidentiary support and must be set aside."

With the commission slapped for creating agency relationships that are of less than agency level service to consumers, the commission and its supporters had only one place left to turn. The state legislature. If agency relationships are the problem, then the lobby would just get rid of them, effectively eliminating buyer's agents, seller's agents or any agent which might offer a higher standard of service to the consumer than traditional brokerage.

While Snider vs. the Oklahoma Real Estate Commission raged on for six long years, the real estate lobby busily reinvented dual agency. Backed by the NAR, they created new language for broker/licensee representation of buyers and sellers. They can be called brokers, salespeople, transactional brokers, and facilitators, but they can't be called agents. The word agent is nowhere in sight in the revised agency law. In Oklahoma, as of January 2001 when the new real estate laws take effect, it just may be illegal to call yourself a buyer's agent.

And that's got Tom Hathaway's goat. His organization is built on agency and consumer advocacy. If the Oklahoma real estate lobby gets its way, it will be a direct threat to agency relationships everywhere.

Now, he knows the Supreme Court victory was just a skirmish. Greater battles lie ahead. He knows he is facing a Goliath of NAR and state lobbies. But, what they don't know is that they may have just handed him a rock for his sling.

Will the giant get it between the eyes?

Tune in Monday for Part II - Why Tom Hathaway Is Dangerous to Anti-agent Lobbies

Published: September 24, 1999

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.