After all of these years, there is still a war rumbling in neighborhoods across America as traditional brokers are still obsessing over the merits of the rebate brokerage model despite most remaining full service and despite rebaters being embraced by consumers.
Rebate brokerages are still challenged by real estate insiders as highlighted by a recent event in Boston wherein rebate brokers Redfin and CondoDomain (both in the top 10 brokerages in volume and unit sales) were allegedly blackballed by a traditional broker and preemptively offered a lower commission because the broker allegedly has a “personal problem” with the rebate model.
According to CondoDomain, a Boston broker contacted Redfin and CondoDomain to notify them that on his listing, if either company desires to show the property, only 1% commission would be offered rather than the 2.5% offered via the MLS “because that listing broker doesn’t believe in our business model and he “personally has a problem” with the fact that we [CondoDomain] give some of our commission back to our client.”
In an email to CondoDomain, the Boston broker allegedly said, “Now, I haven’t actually done any deals with Condo Domain. So I cannot speak to the issue of whether your agents provide a level of service to your buyer clients which (sic) should entitle you to the full buyer broker commission. But you do give portions of the commission received back to your buyers, and I personally have a problem with that.”
Further, the broker allegedly wrote, “I have recently notified Redfin by written correspondence that any future compensation to their company or their brokers & agents on transactions with properties listed by my company will be at the sole discretion of Metropolitan Boston Real Estate and its seller clients, notwithstanding the MLS published cooperating broker compensation to buyer agents. Likewise, any company operating with a similar model to that of Redfin should not necessarily expect to be paid the commission being offered in MLS to cooperating buyer agents on any Metropolitan Boston Real Estate listings… Our company will advise our clients not to offer Buyer Broker level compensation to any brokerage offering to refund portions of real estate commissions received back to buyers – which is to say, we will seek our seller clients’ permission to make compensation to such brokers at our discretion.”
At the time of publication, we have not been able to independently verify, but CondoDomain claims the person who contacted them is a licensed Massachusetts real estate licensing course instructor (name withheld).
The rules under which this would be okay
CondoDomain asked their local board and MLS for a ruling on the behavior to which they advised CondoDomain seek counsel, noting the rules (as with most boards) is that the listing broker must honor the amount of commission offered through the MLS unless the brokers mutually agree otherwise or the listing broker is “excused through an arbitration hearing or other legal process.”
CondoDomain opines that this action is also a breach of the National Association of Realtors’ Code of Ethics, namely Article 15 which states “Realtors shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices.” CondoDomain’s assertion is that they are a full service brokerage and Metropolitan Boston Real Estate’s actions and alleged statements to their clientele imply otherwise.
Austin tops the list of best places to buy a home
When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?
Looking at the bigger picture
(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).
That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).
They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.
“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”
Average age of houses on the rise, so is it now better or worse to buy new?
With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.
The average home age is higher than ever
(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.
With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.
Prices of new homes on the rise
Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.
Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?
The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.
Why Realtors are vulnerable to these rapid changes
(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.
Note: We’ll let you decide which company plays which role in the image above.
So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.
1. Zillow poaches top talent, Move/NAR sues
It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.
Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.
2. Two major media brands emerge
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