It never ends.

A dot-com's PR firm goes whining to the national media that the big bad Realtors are trying to put their client out of business while disserving and overcharging consumers. Otherwise level-headed journalists jump in the fray like knights saving virgins from dragons.

Where's the healthy skepticism that chain-smoking, liquor-loving, bad relationship-recovering journalists are supposed to have? That there are two sides to every story?

Time Magazine's most recent edition, January 31, 2005, features a story in the business section called "The Commission Squeeze" wherein the author, Daniel Kadlec rehashes the same old story covered earlier by Forbes (August 2004), The Wall Street Journal (November 2003), USA Today (Sept.22, 2002), and ComputerWorld (Oct.2, 2002).

Kadlec's story catalogs a number of Internet-based brokers' struggles with the NAR and large brokers to keep them from accessing the MLS. The Internet should make homebuying cheaper, like buying stocks, reasons Kadlec, where $250 trading fees have dropped to as low as $15. Realtors protecting their commissions are standing in the way.

To Kadlec, every share of stock is the same as the next, and so is every house.

With statements like "The big guys on the block prefer the old way: their agents usher clients door to door and show house after house," and "Nationally, the average commission on a house sale has slipped to 5.1% from 5.5% a few years ago, in part because discounters are making a dent. Nonetheless, house prices are rising so fast that agents are stuffing their pockets as never before," Kadlec reinforces the bias that Realty Times has pointed out time and time again that the popular press seems to have against the real estate industry.

Bias, you say? Realty Times has pointed out numerous times when journalists failed to use information that would blow their attacks against Realtors out of the water. Kadlec, like the others before him, keeps squarely focused on the dirt, such as the current investigation of the NAR by the Department of Justice.

According to Steve Cook, spokesperson for the NAR, the two talked for over an hour, yet the only quote Kedlac attributed to Cook was,"There is no intent to keep anybody from accessing this data."

In fact, the NAR has put listings in front of the public, in a rich advertising format on Realtor.com that puts bare-bones MLS listings to shame. Why? Realtor.com is retail. The MLS is the warehouse.

Listing brokers contract with sellers to market the listing appropriately. If the seller agrees to the listing broker's marketing plan, then the seller also agrees to let the listing agent market the listing when, where and how they both agree via contract.

Is there a way to improve the efficiency of a listing agreement? In Kadlec's world, sellers should be able to fill out a form, upload their house's picture and sit back and wait.

But selling a house doesn't work this way. When you sell a share of stock online, you don't have to worry about buyers rifling through your bathroom to steal your heart medicine. And the argument presumes that marketing a home is only about an MLS- only presentation. If so, then why is there need for any listing agents, including the Internet brokers Kadlec appears to admire?

Any broker member of any MLS can access listings, too, and to say they can't is flat wrong. What they can't do is advertise other brokers' listings without permission, and that's by state law in every state. If that's anti-trust, then the Department of Justice has a bone to pick with every real estate commission in the nation, not just the NAR.

If Kadlec is so interested in an efficient market, why doesn't he give more credence to the fact that consumers can contact Realtors directly from Realtor.com, and browse information-rich listings without waiting or signing any agreements? MLS databases, which reflect the business-to-business nature of the cooperative workplace, have just the bare facts about the listing. There are no multiple views, crime statistics, neighborhood information, virtual tours and other data that can be found on the extremely consumer-friendly Realtor.com. Why? It's the listing agent's job to market the listing to consumers - not to competitors who want to use the listing agent's MLS warehouse presentation in a discount marketplace.

How would Neiman Marcus like it if Ross-for-less contacted Neiman's exclusive suppliers, used Neiman's ads to attract buyers, and then told buyers, "I can get it for you wholesale!" That would be more efficient, wouldn't it?

There's a reason Neiman Marcus doesn't let you try on clothes on the delivery dock, and their catalog items are cheaper. There are no dressing rooms, no helpful salespeople, and no displays to make the items look more attractive. There's also comfort, security and a myriad of other considerations that make shopping for clothes indoors much nicer, but pricier.

Like Neiman's, there's a reason why Realtors want to be paid for their exclusives, their presentations of listings and the considerable risk-laden work they do to get homes sold. Let's face it, if you sell a share of GE and your house burns down because of faulty wiring, the SEC isn't going to do a thing. But Realtors face that kind of litigious liability every day.

Kadlec, like so many journalists before him, either doesn't or refuses to understand the difference.

And another thing - which is it? Do agents make 5 to 7 percent commissions or 5.1 percent? Kadlec seems to vacillate according to the point he wants to make - that commissions are too fat or that they are dropping due to pressure from discounters.

Kadlec's buyer, Bryan Geston paid 5.5 percent. If that's the case, he didn't even get the national average discount (5.1 percent, according to Kadlec)! He got a $1000 Home Depot gift certificate, but without knowing what he paid, did he do better or worse than he would have contacting an agent directly? We'll never know.

There's no point in even going into the fact that commissions are negotiable. Journalists scoff at that - but if they weren't negotiable, then why are commissions dropping? Commissions have dropped from 5.5 percent to 5.1 percent, but apparently without any help from agents....

Kadlec also confuses lead generation companies with brokerages. LendingTree is a licensed brokerage, but it's really a lead generation firm. It has no intention of hiring its own agents and competing against local brokers. Its business model is based on bringing consumers to brokers and letting the brokers take over, paying a referral fee on the back end.

Where the Internet is making companies smarter is not in lowering commissions. In fact, even so-called discount companies have found it takes a lot of overhead, namely advertising, to compete. zipRealty and eRealty (before selling out to Prudential) raised commission rates last year (or didn't Kadlec bother to find that out?) Even discounters have to make money, and with stock investors lashing their backs for more, more, more, journalists should be watching their commission rates. Profits must go up, after all.

Then they'll be just like their publicly-held, traditional nemesis - Cendant, parent of three of largest traditional real estate brands in the nation, or Prudential. And guess what? Both are launching their own lead generation/capture programs to put lead capture back in the hands of brokers.

It's not the Realtors who demand large commissions - it's the food chain.

Published: January 28, 2005

Use of this article without permission is a violation of federal copyright laws.

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.