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Why Real Estate Regulation Doesn’t Work

Dishelved guyLast week’s post about imagining a world without Government, er, interference in our lives got me to thinking a little. I try to avoid thought as much as possible (as my detractors will cleanly attest) but something in one of the comments caught my attention.  To wit:

AG could and should be discussing rather more specific real-estate related issues: home buyer tax credits, mortgage deductions, regulation of the mortgage industry, state licensing schemes, and so on.

After I got past the pure irony of that statement placed at the end of a longish tirade against Government involvement in our lives, I began to wonder what the real estate profession would be like without any Government oversight whatsoever.  After all, real estate is a meritocracy anyway.  Hard work combined with persistence and a little (very little) competence can propel you to the top of the field — lots of money and a measure of fame.

Why do we need that pesky Government, either Federal, State or local, to regulate an industry that is so obviously successful at self policing through our Code of Ethics (assuming membership in the NAR) and local Realtor Association procedures?

What’s the point?

We  all know Realtors who have a large slice of the market pie in our little geographic place in the country. We also know that these Realtors, in many cases (not all), have a reputation for being, well, less than totally ethical.  Perhaps they may have even broken a law or two. Perhaps compliance with local MLS rules leaves something to be desired. You may have seen their name on your State’s Real Estate Commission’s Bad Boy/Bad Girl List.  Yet, their livelihood remains secure and their behavior continues unabated.

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So, even with all this regulation in place, there are those for whom the rules do not apply.  Why bother?  Just dump the Government interference and regulation and let the Wild West be the Wild West.  Oh, and get rid of those transfer and recordation fess while you’re at it.

Good plan?  Yes? No?

Written By

“Loves sunrise walks on the beach, quaint B & Bs, former Barbie® boyfriend..." Ken is a sole practitioner and Realtor Extraordinaire in the beautiful MD Suburbs of DC. When he's not spouting off on Agent Genius he holds court from his home office in Glenn Dale, MD or the office for RE/MAX Advantage Realty in Fulton, MD...and always on the MD Suburbs of DC Blog

14 Comments

14 Comments

  1. Eric Bramlett

    March 21, 2010 at 12:39 pm

    Fantastic plan! The mortgage industry needs no regulation whatsoever, as well.

  2. David Taylor

    March 21, 2010 at 1:14 pm

    I’m on with any plan to deregulate any industry, after all deregulation has brought us two great things in recent memory. First the deregulation of the energy sector brought us Enron just ask California and their rolling blackouts wich where caused simply for profit then the deregulation of the banking industry led us to………. Well you know!

  3. Brandie Young

    March 21, 2010 at 5:55 pm

    I’ve always thought it’s interesting – Government involvement in the home purchase process. If you look at it from a pure $ standpoint, one can go out and purchase a $200,000 car in a matter of minutes, but it takes weeks, reams of paper and the involvement of countless individuals to purchase a $50k home.

    • Eric Bramlett

      March 22, 2010 at 3:07 pm

      I’ll be very impressed if you can purchase a $200k car with a $7k down payment in a matter of minutes.

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