In one of the most jaw-dropping press notices of the year, The Consumer Federation of America has announced that it will hold a press conference on Wednesday to release a detailed report, an analysis of the non-traditional real estate brokerage industry -- vowing to share the podium with non-traditional brokers to tell consumers how they save time and money for consumers over "traditional" real estate brokers. Further, the CFA vows to "outline steps to protect competition."

Joining CFA leaders onstage, for what appears to be a homebuying/selling seminar, will be "non-traditional realtors from across the country who will explain how they are able to save consumers thousands of dollars and hours of time in spite of the intense, anti-competitive, market pressure from traditional brokers."

Included will be the "discounters, rebaters, exclusive buyer brokers, limited service internet providers, and others who offer lower prices and flexible service options to consumers."

Not invited to tout their virtues as service providers will be traditional brokers.

When asked by Realty Times to define "traditional brokers," Steven Brobeck, executive director, inadequately responded, "It's easier to define non-traditional brokers, this is defined by different types of brokers. To the list of those of those who charge lower prices, we would add those who advertise their services as exclusive buyer or exclusive listing services."

Even if they don't charge lower prices?

"Basically there are three variables that are important," explains Brobeck, "One is the cost to consumers, the level of services, and the extent of representation or non-representation. If someone defines themselves as a facilitator we would classify them as non-traditional."

Even if they score more points with CFA as exclusive agents? Realty Times wonders how agents can have it both ways.

To get into CFA's protected species category, a broker must be non-traditional, but non-traditionals can also be exclusive agents or facilitators.

"My understanding is there are some on both sides, exclusive buyer's agents and exclusive listing agents, as cooperating brokers," says Brobeck.

While still casting about for clarification, he adds, "Major firms service both buyers and sellers, and when we call them and ask them what they charge, they will tell you six or seven percent reluctantly, although later there is a opportunity to negotiate this."

So if commissions are negotiable, then what's the problem? Don't brokers have a right to assess a job before they take it on to decide how much they want to charge? Circumstances, sellers and their homes are all unique, and may require different marketing strategies.

"Many charge more than that," says Brobeck.

In the last year, real estate sales have dropped 12 percent, leaving sellers vulnerable in many markets across the U.S. They're going to deteriorate next year, too, according to the National Association of Realtors with another 8.6 percent decline. What if they are willing to pay more commission to get their homes sold? "The market is complicated," says Brobeck. "I'm talking about things I saw two years ago."

Why is what happened two years ago relevant today? The market has changed radically since the housing boom of 2001-2005. With home languishing longer on the market, could it be that some consumers have less confidence in non-traditional models? Is that why non-traditional models are leaning on organizations like CFA to protect them from the bogeyman (competition) posed by long-established models?

At the press conference, entitled, "CFA Press Conference: How Non-Traditional Real Estate Brokers are Attempting to Break the Industry Cartel and Lower RE Cost for Consumers," the CFA says it will release new information on:

• The rapid growth of this new sector of the real estate brokerage industry; presumably the "discounters, rebaters, exclusive buyer brokers, limited service internet providers, and others who offer lower prices and flexible service options to consumers."

• How traditional brokers and their trade associations are attempting to maintain their once protected monopoly by disparagement of services, boycotting, multiple listing discrimination, and controlling local regulations;

• The steps need to protect competition and increase price and service options for consumers.

What's dumbfounding about this announcement is that CFA seems more interested in protecting certain real estate business models than in allowing consumers to hear the whole story -- that so-called traditional brokers and agents have legitimate services to offer consumers that are well worth higher costs.

Brobeck would not address why traditional brokers, whom the organization can't or won't define, aren't included in the news conference to tell their side of the story, but promises that the report, which will be released to the media, will explain the differences between non-traditional and traditional brokers.

According to an internal report by the National Association of Realtors, real estate commissions are closer to 4.3 to 5.3 percent than 6 or 7 percent. If discount brokers are 5 percent of total brokerages, how is it possible for 5 percent of the population to impact 25 percent or more of commissions?

Clearly, traditional brokers are negotiating commissions at the kitchen table, one transaction at a time. Except now, the market momentum no longer favors sellers. If sales are declining, and inventories are rising, sellers may decide they need the pull-out-all-the-stops services of a "traditional" broker; so, why doesn't the CFA acknowledge that choice as viable, and certainly as legitimate as discounts during the momentum of a sellers' market?

Because of the CFA's bias against "traditional" brokers, it's hard to be satisfied with such an obvious attempt to sandbag those who are busy working and not whining that others who have been around longer and are more successful are making it hard for the newcomers to compete.

It's hard to stand by and watch traditional brokers being cast as bad guys by the CFA when:

1. The organization refuses to supply a definition of what a traditional broker is.

2. There's no evidence that traditional brokers are more expensive than non-traditional brokers in relationship to what they do for consumers.

3. There's no evidence being presented in the CFA's accusations that traditional brokers are worse in any way for consumers than non-traditional brokers.

4. There's no counterpoint being made that non-traditional brokers and their lower cost services might put consumers in financial jeopardy. What happens when consumers pay for services and their home doesn't sell?

It got personal when Brobeck refused to answer questions, deferring to the coming press conference, and said, "You are a very difficult person, Blanche."

It's the questions that are difficult, Steven, because this attack on "traditional" brokers, whoever they may be, is indefensible in the way you're going about it.

Published: December 12, 2006

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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. For more articles by Blanche, click here.