"Chipping Away At CBS's Credibility"

"Chipping Away At CBS's Credibility"

should have been the title to this so called news piece.

For those having used services of a real estate agent prior to watching the CBS News Magazine segment on May 13 called "Chipping Away At Realtors' Six Percent", a report purporting the Internet based real estate brokerage 'Redfin' and their crusade to change the real estate industry by providing a 'no service' business model has been met with opposition by the National Association of Realtors, must have made you feel cheated, robbed or taken advantage of or maybe.... a victim.

The truth is...you were deceived. You were cheated. You were misled - With false information. You were a "victim". A victim of false reporting. Lied to by a once responsible news organization. Cheated from knowing the truth. Robbed by a team of thieves who stole your trust and took advantage of their positions of influence.

Similar to past CBS reporting indiscretions, it left me yearning for the days when you could trust the major news networks to provide accurate information, balanced perspective and honest reporting. Not today. This latest example of intellectual dishonesty by the so called news team at CBS contains blatant disregard for truths reminiscent of their debacle that lead to the resignation of several senior news executives including the once honorable Dan Rather and the firing of Mary Mapes over airing a story based on false National Guard documents prior to the 2004 election known as "Rathergate".

So here we go again. With the political campaigns heating up, CBS news fires up their rhetoric and propaganda machine to impugn an entire industry that has been a major component in the stability of our Nations Economy. By setting the stage with an "Empty Chair" they have once again proven to the world they are not worthy of respect as a "news" network.

The NAR (National Association of Realtors) and it's staff spent nearly a year working with CBS. Legal council for NAR met with CBS producers in Chicago, and a conference for Realtors was attended by the producers of CBS and they still got it wrong.

Let's focus on obvious reporting errors.

1) Calling six percent commission "sacrosanct". Fact. There is no set commission. To do so would be a violation of Anti-Trust Laws. 'Price fixing' provisions covered under the Sherman Act to be precise. Commissions are negotiable. According to "Real Trends" a company that tracks real state trends coast to coast the average commission is 5.1 percent.

2) NAR is the industry's" Governing Body". Fact. NAR is a trade organization. Here in Washington State it is not required to join the National Association of Realtors in order to become licensed real estate agents or brokers and help buyers and sellers buy and sell.

3) NAR issued a rule in 2003 threatening to block access to MLS services by Internet discounters. Fact. No Virtual Office rule blocked or threatened to block access. An important note is, MLS rules apply to it's members and subscribers, NAR cannot dictate to any MLS how to regulate or manage their independent listing databases.

4) The MLS is a database that lists virtually every home in the country. Fact. There are over 900 individual MLS services nation wide. There is no national database or national MLS. MLS data is privately owned and regulated through a series of rules and laws governing the sale of real estate. They are not just isting databases. Listings are individual contractual agreements to cooperate and compensate between brokers.

5) Eight states have minimum service laws that require Realtors to provide a level of service many Internet discounters cannot provide. Fact. Minimum service laws ensure the general public receive a minimum level of service from real estate licensees. Not from Realtors. Remember, real estate agents (licensees) are not required to join NAR to sell real estate. The term "Realtor" is a trademark not synonymous with "real estate agent". Internet discounters chose their business model that provides less that the laws require.

6) The Brokerage industry has a powerful lobby. Eleven states flatly prohibit rebates. Fact. Laws preventing rebates are designed to protect the consumer against kickbacks during a real estate transaction not to limit brokers from attracting customers.

Other important facts left out of the report is that the Redfin website itself provides evidence of misleading half truths and deceptions.

For example; From the Redfin website.

"Even in the seller’s case, commissions have been found to create conflicts of interest: according to award-winning University of Chicago economist Steven Levitt, the commission motivates the seller’s agent to take any offer, even if low, for fear that the agent may lose the commission if he doesn’t complete the sale.

Fact. Agents do not "Take offers". Only sellers and buyers can agree to an offer or counter offer.

The buyer’s agent and the seller’s agent each earn a percentage of the overall home price. When listing a property, the seller sets this percentage, known as the commission, earned by each. Traditionally, the seller sets a commission of 6%, with 3% going to the seller’s agent and 3% going to the buyer’s agent.

Fact. There is no set commission, it's negotiable. As mentioned earlier the national average is 5.1 percent.

This one sided reporting from a discredited news organization also stated that eRealty went belly up from unfair business practices "choking off air supply" and "threatening" rule changes from NAR in 1999. What they forgot to clarify was that the company did not go belly up. It was purchased by Prudential Real Estate Affiliates for a loss of 33 million to investors. Must have slipped their minds. A small kudos for at least posting the correction on the CBS website. Think they'll get around to making the corrections about NAR and industry practices. I won't hold my breath but remain cautiously optimistic.

I guess it's trendy now in today's society to place blame on others when your business model fails. Solution; Find a willing participant in the news media. Fabricate a feel good story alleging victimhood. Set the stage for a one sided barrage of half truths and lies. Then sit back and let the consumer fall prey to yet another example of irresponsible news reporting.

Maybe the Internet discounters should try selling services consumers want instead of whining when their business models fail. Just an idea...