The Star does a wrap-up of new laws taking effect on July 1. The story by Mary Beth Schneider tells us for the umpteenth time that Indiana now has a "In God We Trust" special license plate. Gun owners will now be able to get life-time permits she tells us. If you're riding in a funeral procession, you will no longer have to fasten your child in a car or booster seat. And, if you're a physician, you can tell your patient you're sorry when you screw up without having your apology used against you in a malpractice lawsuit.
There is also another new law the Star isn't telling you about. If you're a discount real estate broker, you're out of business under a new law passed to protect traditional real estate brokers. As AI told you yesterday, Home Yeah has already closed up shop because of the new anti-competition law. The only MSM news publication to date to cover the new law is the Courier-Journal, which is an out-of-state newsaper. Go figure.
12 comments:
You're right--The Star and other MSM should have reported about this change in law, and other changes in laws, too.
But what have you got against Realtors? I could be wrong, but I think this case is all about the MLS. MLS is a privately-owned entity, owned by the Realtors' association. They have the right to police it, and enforce legitimate rules of membership. In this town, there are Realtors who are MIBOR members and many more who are not. Those who are not cannot use MLS. Customers can make similar choices--to use an MLS-affiliated Realtor or not.
It's not just about cost of services. Anyone or any company/organization that owns a system like MLS, certainly has the right to protect its brand and its asset, by assessing fees, mandating certain rules and regulations and other legitimate boundaries. In this case, I think, MLS owners have determined their members cannot simply charge a flat fee only to list a home on MLS...but must, as a provision of membership, offer more services.
Am I missing something?
If this is the case, clearly the owners of MLS can and rightfully should protect their brand in any legitimate manner they deem fit...such as, disallowing members to perform only a "listing" service without offering other services.
Maintenance and operation of MLS is expensive. It is a valuable service that I believe is copyrighted and available only to members. I am not a member of MIBOR, but I recognize the MLS's value.
What members of MLS charge for that service is another matter altogether. A price war might be healthy. Collusion regarding fees would, if I'm correct, amount to improper cartel-setting of fees, or anti-trust violations.
Anonymous--my problem with realtors is their fear of competition. They pushed this measure under the ruse of being pro-consumer. That's hogwash. It's only about protecting their commissions. They complain that the discount brokers do next to nothing to earn $499. Anyone who has been through a real estate closing knows that often one of the agents does all the work, while the other sits on his hands and does nothing but still gets paid half of the commission earned on the sale. Realtors don't seem to have a problem with that.
Interesting...if you're against nonsense bills getting pushed through America's worst state legislature (credit to the late great Harrison Ullman), you're going to be working overtime...there are MANY bills shoved through that ought to get trashed.
My original comment remains: the owners of MLS have every right to determine who uses their product and how.
I've bumped into a few Realtors who didn't earn their fees, but not many. I've bumped into far more attorneys who didnt earn their fee, but I'm not campaigning for some kind of fee restrictions on them.
I think this is all about MLS, unless, again, I'm missing something. I could be.
Is this law about something other than MLS? Please advise if so.
It has nothing to do with the MLS. This sets the minimum requirements for the agency relationship to form in order for a broker to earn a fee. If the minimum services set out in the law are not performed, no agency relationship arises and the broker can earn no fees from the transaction.
"...if the minimum services set out in the law are not performed, no agency relationship arises and the broker can earn no fees from the transaction."
So what you're saying is...agents ought to be able to get paid for doinng nothing?!?
No dummy--I'm saying I should have the choice of paying a flat fee for very limited services from the broker instead of paying a 7% commission to a broker for doing nothing more than listing the property.
*In the spirit of full disclosure, the author of this post is a Licensed Real Estate Broker, a REALTOR and a member of MIBOR.*
AdvanceIndiana says, "my problem with realtors is their fear of competition."
Are you out of your mind? There are at least 7,000 REALTORS in the indy Metro area. How can you possibly suggest that there's no competition?
But let's back up a little bit & perhaps clarify things somewhat.
The State of Indiana issues its Real Estate License to individuals who've taken appropriate coursework & passed required tests. (I'll not get into how shamefully easy it is to get a Real Estate License in Indiana here. That's for a different thread.)
The State has every right to set minimum duties for the individuals to whom it issues that license. Just like a Driver's License, etc., the State sets the bar.
Since you've not spelled out for all to see what those minimum duties are, I'll do it for you:
- Present all offers to purchase or lease to and from the seller or landlord immediately upon receipt of the offers regardless of whether an offer to purchase has been accepted
- Disclose to the seller or landlord adverse material facts or risks actually known by the licensee concerning the real estate transaction
- Advising the seller or landlord to obtain expert advice concerning material matters that are beyond the licensee's expertise
- Timely account for all money and property received from the seller or landlord
- Exercise reasonable care and skill.
In addition, the Real Estate Commission Rules & Regulations require that the listing and selling principal broker, or his or her licensed representative, SHALL attend all closings.
Further, the law - HB1339 - [LINK HERE] says that if someone is assisting a Seller in a non-agency capacity, they must:
- Be available to receive and timely present offers and counteroffers for the purchase or lease of:
A) the property of the individual, if the individual is a seller or landlord; or
B) the property that they individual seeks to purchase or lease, if the individual is a buyer or tenant.
- Assist in negotiating, completing real estate forms, communicating, and timely presenting offers, counteroffers, notices and various addenda relating to the offers and counteroffers until:
A) a purchase agreement or lease is signed; and
B) all contingencies are satisfied or waived.
- Timely respond to questions relating to offers, counteroffers, notices, various addenda, and contingencies from the seller, landlord, buyer, or tenant pertaining to the subject property.
Why, you might ask, would anyone hire a real estate agent in a "non-agency" capacity? Apparently that agent has something that the Seller wants.
And Anonymous is correct here. It's almost always access to the MLS. A Seller wants to have their home listed on the MLS without having to have an agent do all sorts of things that they feel like they can either do themselves...or see no value in paying for. (I'll not get into the details of whether that's a good or bad thing here. Again, a topic for a different thread.)
Now would be a great time to talk about the MLS. You see, up to now, all the things that I've outlined have NOTHING to do with MIBOR, the MLS or REALTORS. All of the legal hullabaloo has to do with Licensed Salespersons in the State of Indiana.
"What's the difference," you ask? A lot. All REALTORS in the Indy area are MIBOR members, as well as Licensed Salespeople. But not all Licensed Salespeople are REALTORS or MIBOR members. One has to have a License to sell Real Estate first, then one joins MIBOR, IAR and NAR and becomes a REALTOR. After becoming a REALTOR, one then must subscribe to and uphold a REALTOR Code of Ethics.
With that membership comes the ability to use and share information on our local MLS. And that ability is not free. MIBOR members pay thousands of dollars every year to maintain their ability to use that data to their client's advantage. And MIBOR members spend tens of thousands of people hours a year making sure ther the data there is accurate, usable, legitimate, relevant and useful to their clients.
"So what. Not our problem." say John & Jane Doe, homeowners. "We don't care what it costs you, we just want to be able to put our home on the MLS. We can do all of our own advertising, hold open houses and make our own flyers."
Two problems there, Mr. & Mrs. Doe.
First, the MLS is NOT A PUBLIC UTILITY. It's created, developed, maintained, improved upon and wholly owned by the REALTOR members who pay for it. You have no more right to expect to be able to advertise your house there at no cost than a REALTOR does being able to sleep on your couch for free.
Secondly, nothing prevents you from running down to the local Lowe's and buying a FSBO sign, a flyer box and buying a newspaper ad for your Sunday Open House. In Indiana, you can sell your own house without having to hire someone to represent you.
"But we want on the MLS, because we know that people look there when shopping for a house."
No problem. Hire a Real Estate Agent who's a MIBOR member and they'd be happy to do that for you. Know that since you're now utilizing the services of a person carrying a license issued by the State of Indiana, there are certain things they are required to do - and you can't opt out of receiving. Whether the Agent you hire charges you for that or not is completely a matter of negotiation between you and them.
As crappy as it sounds...if you wanna' play, you gotta' pay. How much you pay, however, is strictly a matter of negotiation between you and your Broker.
AdvanceIndiana...you assert that Discount Brokers are out of business due to this law. In fact, you suggest "Home Yeah has already closed up shop because of the new anti-competition law." Nonsense. Just because one Broker decides that he can't find enough profit in selling his services for a specific amount does not mean that the law caused their demise. In fact, HomeYeah merely changed names and eliminated one of its options for limited-service representation.
***Interesting side note. This author had a transaction with the aforementioned Broker a few months back. I bet you'll never guess who failed to show up at closing, a requirement of Indiana Real Estate License Law? I assure you it wasn't me, my client or the other Broker's client.***
If what you assert were true, then I wouldn't be able to go out today and find dozens of Brokers in Indiana willing to both follow HB1339 AND provide deeply discounted, limited-service or flat-fee services.
But back to where I started. There are over 7,000 MIBOR members, ready willing and able to provide a broad range of services to local homeowners. And beyond that, there are likely hundreds and hundreds of Licensed Salespeople who'll help home sellers in a variety of capacities in the sale of their home. From the FSBO Store to "No Brokers, No Commmissions, No Kidding" billboards, they're all over the place. From flat fees to a la carte services to full service representation, homeowners still have a plethora of choices for finding adequate help in the sale of their home.
It's the BROKERS who don't have the choice of being paid for doign nothing. If a Broker wishes to provide Real Estate services in Indiana, there are 6 or 8 very simple things they must do for their clients as required by Indiana Law. (You might note that none of the requirements involve actually MARKETING THE PROPERTY in a way that'll actually result in a fast sale at a high price. But that's another discussion for another thread.)
Hey, dummy. You still have that choice. To pretend that you don't is disingenuous at best, a flat-out lie at worst.
It's you brokers who are always bitching about having to share the commission with some lazy broker who gets half the commission for doing nothing more than listing the property. You think there's nothing wrong with a guy collecting $7,500 on a $200K house for doing nothing but listing. At least the discount broker realizes the value, it was $499. Now, that same broker will have to charge you $1,999 to provide those extra services. When I sell my house, I don't need those services from you. And I don't want to pay you 7%. You didn't like the competition so you rubbed it out by statute by buying off the legislature with campaign contributions. You will not win. The Justice Department will eventually come down on your little racket. It is a violation of our anti-trust laws as your organization has already been informed.
Gee, someone must be getting a little flack over this new law. Why else would you bother making these posts months after the fact? Looks like someone is able to see through your propaganda.
Now calm down...
"It's you brokers who are always bitching about having to share the commission with some lazy broker who gets half the commission for doing nothing more than listing the property."
Actually, it's typically the other way around. It's the Listing Broker who spends THOUSANDS of dollars marketing a property who have a difficult time splitting their fee 50/50 with the Buyer's agent who tossed someone in their minivan & drove them around for a week or two.
"You think there's nothing wrong with a guy collecting $7,500 on a $200K house for doing nothing but listing."
First of all, I wouldn't think of charging someone $7500 if all I did was stick their home on the MLS. That's not what I do.
Secondly, I'd charge them at least $14,000.
"At least the discount broker realizes the value, it was $499."
If you really believe that the only value a Broker brings to a transaction is an MLS listing, you may have a point. I'm not so sure that it's actually a measure of value, though. If all things were equal, and all houses of a similar size & style were priced the same, it might be that simple.
Like a lot of things, there's a cost to that "discount" price.
Yes, there are some people for whom much of the legal-eze is better handled by themselves. However, I challenge any homeowner - and most other Brokers - to provide the broad based marketing that I provide to my clients. I charge a sh*tload of money for those services, yet that marketing means that my clients typically make more money at the end of the day than if they'd used a limited-service broker.
"Now, that same broker will have to charge you $1,999 to provide those extra services."
Bullsh*t. They don't "HAVE" to charge you anything. They have CHOSEN to charge you that. Just because some random Broker knows how to spin some PR machine & get everyone's dander up over a non-issue doesn't make it true.
"When I sell my house, I don't need those services from you."
Then please, for the love of God, don't hire me. If you want limited service, I don't do that. I have absolutely no bones to pick with people who want that service, and I have no issues with sellers who believe they'll do better by hiring a limited-service broker.
"And I don't want to pay you 7%."
Then don't. If all you care about is how much I charge, then nothing else about what I do or the services I provide for my clients amount to anything to you. You clearly have some philosophical issue with me earning a living.
"You didn't like the competition so you rubbed it out by statute by buying off the legislature with campaign contributions."
HUH? I'm lost here. I didn't do jack. The competition got rubbed out? Who are you trying to kid? Big f-ing deal that HomeYeah chose to change their name. They could still offer their $499 package if they chose to do so. There are companies that still do.
"You will not win. The Justice Department will eventually come down on your little racket. It is a violation of our anti-trust laws as your organization has already been informed."
I'm not sure what little racket you're referring to.
So I have to ask...who pissed in your Cheerios? I'd really like to sit down with you and hear how you arrived at your conclusions, tell you a bit about me and my family and how my business isn't all it appears to be from the outside...and hopefully find that we're probably more alike that either of us would like to think.
No flack at all. I ran across this post from a random search about something else on Google.
Post a Comment