Top 10 Consumer Issues in Real Estate: 1995 vs 2Q2015
 Share
The version of the browser you are using is no longer supported. Please upgrade to a supported browser.Dismiss

 
View only
 
 
ABCDEF
1
Top 10 Consumer Issues in Real Estate: 1995 vs 2Q2015
2
3
For: Meeting with Consumer Union, publishers of Consumer Reports
4
From: Bill Wendel, Real Estate Cafe (617) 661-4046
5
Date: 6/26/95 (original date of first list!)
6
RE: Top 10 consumer issues in real estate
7
8
Here are some quick thoughts on consumer issues in real estate as requested.
9
10
“Home buying is the sleeping giant of the consumer movement.”
11
Gail Schaffer, New York Secretary of State
12
Consumer Federation of America panel in December 1992
13
14
Then - 1995
NOW -- Top 10 Consumer issues in real estate in 2015
15
16
#1: The conspiracy of silence regarding benefits of buyer agency reaches highest levels of government
17
• A publication entitled “66 Ways to Save Money” produced by the Consumer Literacy Consortium makes only two recommendations regarding housing—the first is to use a buyer agent (see Exhibit 1)
18
• Ironically, the National Homeownership Strategy does not mention buyer agency (Article from Boston Globe enclosed as Exhibit 2 and full report attached as Exhibit 3)
19
• Preliminary recommendations regarding buyer agents included in a November 1994 progress report (see Exhibit 4) were deleted from the final report for fear of “upsetting the Realtors” (see Exhibit 5)
20
21
#2. The National Association of Realtors is systematically dismantling the common law of agency state by state to facilitate dual agency (some consumer advocates have called this effort “Realtorgate” or the Contract on American Homebuyers)
22
• Consumer Union should identify states where NAR has succeed in dismantling the common law of agency and advise consumers to deal with real buyer agents not dual agents or counterfeit buyer brokers
23
• Consumer Reports could survey large regional and national brokerage firms to assess their business practices regarding agency, particularly dual agency
24
25
#3. Consumers believe real estate agents are overpaid and compensation does not equal value
26
• MHC’s survey of 200 recent homebuyers revealed that 40% of consumers believe that real estate agents are over paid
27
• Furthermore, consumers prefer to compensate real estate agents on a fee basis rather than commission by a two to one margin
28
29
#4. Buyers involved in in-house sales pay more
30
• See BUBBA (see Exhibit 6)
31
32
#5. New information technologies have the potential to open up real estate markets for consumers or preserve status quo
33
• NAR’s Realtor Information Network is dedicated to controlling the flow of all information so the agent remains the focal point of the transaction
34
• Other information providers are going directly to consumers
35
• Consumer Union should identify which MLS’s provide public access
36
• As more and more newspapers provide advertising on line, Consumer Union should monitor policies regarding FSBO advertising
37
• Consumer Union should identify / rate Web pages regarding real estate
38
39
#6. More enlightened consumers are not asking for buyer agents, but direct access
40
• NAR’s Gallop Poll found that over 70% of recent home buyers would use a buyer agent next time
41
• However, MHC’s survey found most consumers would prefer to do some of steps in the home buying process themselves in order to save money. Hence, their concern is access to real estate info, most importantly listings.
42
• Buyer Agents have their own biases which are not necessarily pro-consumer. Some buyer brokers, including the newly elected president of the National Association of Exclusive Buyer Agents, fear that direct access will allow consumers to circumvent both buyer and seller agents.
43
44
#7. Disclosure requirements, which are now common across the US, are largely ignored
45
• MHC’s survey revealed that 55% of agents failed to comply with the state’s disclosure requirements
46
• Surveys in Texas revealed over 80% failed to disclose (check for exact stats)
47
• New information technologies creating a new era of electronic disclosure with national implications
48
49
#8. The FTC is investigating impact of NAR’s code of ethics on advertising practices (see Exhibit 7)
50
• Buyer agents in some states where the common law of agency has been changed are limited by NAR’s code of ethics in their efforts to distinguish themselves from counterfeit buyer brokers
51
52
#9. HUD, VA and other government agencies ignore agency issues
53
• Instead of protecting consumers, these government agencies contribute to problem
54
• Fannie Mae educational materials pay lip service to buyer agency and contribute to disinformation
55
• One official at FDIC foreclosure division explored requiring buyer agents to protect lender assets from foreclosure
56
• In time, we believe HUD and other government agencies will embrace buyer brokers as an affordable housing tool which is available through the market
57
• If the 8 million home buyers targeted by the National Homeownership Strategy used buyer brokers, they could save a staggering $40 billion by the end of the decade (without creating government programs or spending any tax payer money)
58
59
#10. National Homeownership Strategy says cost savings generated by new information technologies should be passed on to consumers (see Exhibit 8)
60
• Consumer Union should hold them to this lofty goal.
61
62
63
SUGGESTED READING
64
Smart Money Magazine has been on the cutting edge of consumer real estate issues
65
“10 Things Your Real Estate Won’t Tell You”, April 1993
66
“10 Things Your Mortgage Lender Won’t Tell You”, April 1995 (check month)
67
“Cut Your Home Insurance Bill”, November 1995
68
Article on discrimination against buyer brokers, June 1995
69
“Sell Your Home in 5 Days”, July 1995
70
71
Loading...
 
 
 
Sheet1 - Table 1 - Table 1 - Ta
Sheet2 - Table 1 - Table 1 - Ta
Sheet3 - Table 1 - Table 1 - Ta
 
 
Main menu