“But imagine for a moment that your neighbor’s mother introduced an old friend to the FSBO seller up the street. This is brokerage, introducing buyer to seller. The principals are unrepresented, but they can do everything they need to do — in Arizona, at least — at the offices of a title company. Nothing unlawful has occurred — until grandma takes a finder’s fee from either the seller or the buyer.
At that point she is in violation of real estate licensing laws. She can connect buyers with sellers all day, every day — provided she does not get paid for doing so. The purpose of the real estate licensing laws is not to protect buyers and sellers from chatty grandmas, who may or may not know anything about real estate. Instead, those laws exist to limit artificially who can be compensated for introducing buyers and sellers.
Before the advent of licensing laws, chatty grandmas and underemployed barbers, among other people, brokered real estate on the side. In the name of “protecting” consumers, the NAR got state legislatures to pass laws putting those innocent souls out of the real estate business. These are the actions of a cartel. Even now, the NAR is trying to pass federal legislation forbidding banks from brokering real estate.
Let’s say I, as a buyer, want my very intelligent cousin Vinny — who knows more about RE than most agents — to help me buy a home. If we approach a seller/listing agent and try to represent ourselves, we are not allowed to keep the portion of the commission reserved for the selling (buyer’s) agent. Why? If my cousin can help me with the deal and perform all the services that an agent can, why shouldn’t I have the choice to use his services and have him earn the commission?
I agree with disclosure laws WRT licensing — people who are practicing without a license should be mandated to disclose this information up front — but we should not be **forced** to use “licensed” people in any trades, IMHO.
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Keeping banks out of real estate…forcing banks to use RE agents to sell their own inventory of REOs and preventing new competition from getting into RE sales. Of course, you’ll claim this is “free market,” right? Perhaps you’ll try to claim that it doesn’t affect RE commissions, either.
“WASHINGTON – After lobbying members of Congress for the past five years to enact legislation prohibiting banks from being involved in real estate brokerage activities, the National Association of Realtors is applauding the actions of the 110th Congress for moving forward with key legislation the association says is essential to ensuring the country’s real estate industry remains competitive.
H.R. 111, the Community Choice in Real Estate Act, was introduced Jan. 4 in Congress by Reps. Paul Kanjorski (D-Pa.) and Ken Calvert (R-Calif.). Fifty co-sponsors’ names were added on the first day of Congress.
“Without passage of this legislation, we are concerned that national bank conglomerates will continue their attempts to enter into the real estate industry, putting both competition and the nation’s economic health at risk,” said Pat Vredevoogd Coombs, president of the National Association of Realtors (NAR).”
