Thursday, May 24, 2007

Unbalanced Reporting

Unbalanced Reporting – 60 Minutes – May 13, 2007

It has taken me a while to respond to the 60 Minutes broadcast on Sunday night May 13. I have been busy buying real estate from a Realtor. The points the show made were that anyone can sell his/her own home; Realtors do not deserve the commissions they earn; and the National Association of Realtors (NAR) is attempting to restrain trade. Although I am NOT a Realtor and I do not belong to the NAR, I can still see unbalanced reporting for what it is based on my experience and study.

They even interviewed a Realtor and asked her some questions she was unable to answer. I don’t know how many Realtors they interviewed to find someone who would be too stupid to respond to some simple questions, but it appears they waited until they could find someone to support their position and make Realtors look foolish.

First point: Anyone can sell a home and you don’t need a Realtor. Yes, that is true. However, study after study shows that when a knowledgeable Realtor is used, not someone who just got their license in a recent hot market, the seller gets more money in their pocket, even AFTER paying a full commission. The skill is not in putting a sign in the front lawn or listing the house in the Multiple Listing Service (MLS). Any discount brokerage can do that.

The skill is in the pricing, negotiating, qualifying the buyer, and nursing the deal through escrow to closing. It’s like saying anyone can cut hair, which is true, but how bad of a haircut are you willing to live with. At least your hair can grow back and you can get it cut by a professional next time. With a home sale, after you have lost thousands of dollars it is not so easy to make it up.

Second point: Realtors do not deserve the commissions they earn. Some Realtors do not earn it. Other Realtors do earn it. A study done by NAR showed that about 10% of the Realtors earn 90% of the commissions. I do not know if that means 90% of the Realtors don’t know what they are doing, or they are just scraping by, but the point I made earlier was that a professional Realtor will put more money in your pocket even after you pay the commission. Again, they earn their money from their negotiation skills, not by inputting your home information into a computer.

I had an auto accident a couple of years ago where the person who made a left turn in front of me tried to say the accident was my fault, and his insurance company did not want to pay. I could have represented myself against his company, but I hired an attorney instead. He produced results I could not have produced. The other company even tried to deny my medical bills because the medical records and X-rays showed I had three broken ribs, but I didn’t say that was a part of my injuries in their phone interview with me. Guess what? My doctor didn’t tell me that is why I had the pain in my chest and when I would breathe. There wasn’t anything he could do about it anyway. He couldn’t put my ribs in a cast and he didn’t tell me. These were the grounds the other insurance company tried to use to avoid paying my medical bills. Had I not had an attorney, I probably would not have received the funds to cover my medical expenses. His knowledge and skill in this area made the difference. Yes, I might have received some money, but not a fair settlement.

Third point: The NAR want to restrain trade by blocking discount brokers from listing with the MLS. The 60 Minutes program spoke about how some states passed minimum service requirements to force discount brokers to do more than list houses in the MLS and then leave the consumer high and dry. Guess what? There is a reason for providing minimum service when it comes to selling a home. Enough consumers got burned that states created laws to protect them. The broadcast made it seem like minimum service was a bad thing. There is a reason that a doctor has to perform an exam before writing a prescription. Just because you say you want some medication does not mean that is the best thing for you. Minimum service is a good thing.

One of the solutions would be to hire a Realtor as a consultant, just like you can hire a CPA or attorney for advice and guidance. They are out there. Check out for more information or the book by Mollie Wasserman, Ripping the Roof Off Real Estate.

This one sided broadcast was the most unbalanced reporting I have seen in a long time. However, I can recognize both sides of the issue because of my background, experience, and study, and can recognize when only one side is presented. Most viewers do not have that advantage and they were short changed.


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