Limited Service
November 13th, 2007 BobI don’t think that traditional real estate companies are going away anytime soon. I’m certainly not arrogant enough to think that alternative companies like Real-a-Save will take away all of their business. What I do know is that we offer them some serious competition. We Americans really love a fair fight, and the reason that our economy works as well as it does is that the consumer makes the ultimate decision as to which business succeed, and which fail. The market decides.
I’m ready and willing to put my company up against any of the traditional real estate companies, and I’m confident that we’ll beat them when it comes to service, user-experience on our website, and savings. But I suspect that there are traditional Realtors among my competition who are equally as confident with their own companies. That is as it should be, and I don’t resent the competition, nor do I have any ill-will or anger towards my competition in the traditional real estate world.
But what does make me angry is when various real estate commissions and MLS providers try to set up rules that conveniently give the traditional companies an unfair advantage. In a recent story on Inman News, an MLS provider in Washington state has decided to allow its members to choose which listings to display on their sites depending on the “level of service” (among other criteria) that the particular broker offers.
Translation: brokers who offer discounted services can have their listings conveniently left off of major company websites and MLS feeds. So a company which charges a couple of hundred dollars to put your home on the MLS (this is a type of “limited service” company) can effectively be pushed out of business if, suddenly, lots of traditional companies decide not to put that company’s listings on their sites just because they don’t like the business model. What a wonderful rule for the traditional companies.
This rule effectively allows large, traditional companies to limit their competition. Limiting competition. Are you familiar with the Sherman Antitrust Act?
The Federal government has taken a strong stance against states which currently have “minimum service laws”. Take a look at this link to the DOJ (Department of Justice) website showing which states currently have minimum service laws. Scroll down about half-way to see the list. The opinion of the Antitrust Division of the DOJ is that minimum service laws do not actually benefit the consumer. Here’s a quote directly from the report by the DOJ entitled “Competition In The Real Estate Brokerage Industry“:
“Conclusion:
In sum, it is clear that minimum-service requirements restrict choice by not allowing consumers freely to choose what real estate brokerage services they wish to purchase or not purchase. The evidence indicates that these requirements raise prices by forcing brokers to provide services their customers may not want and reducing competitive pressure on full-service brokers. Additionally, because evidence to date has not shown that minimum-service requirements benefit consumers, any harm they cause is almost certain to greatly outweigh any benefit they might produce.”
Colorado real estate consumers have a choice. If you are looking for Denver real estate or Boulder real estate, or real estate anywhere along the Front Range, then our company would be glad to help you save thousands of dollars on your next home purchase or sale. You’re free to choose a more traditional company as well. That’s the American way…despite such self-serving attempts at changing the very nature of our democracy by various real estate commissions and MLS providers.
Is Wall Street crazy or is it just me? Why is it that CEO s seem to get paid more money if they screw up? The fabled