Monday, November 21, 2005 at 11:00 PM

Banks as Real Estate Brokers: The Consumer Perspective
RealtyTimes.com: April 30, 2001

This new generation of information technologies, new business models and new players will raise a wide variety of consumer issues. Without an organized consumer effort, the future of this trillion-dollar industry will be defined by two titans: NAR, which ranks No. 15 on Fortune magazine’s list of the most powerful lobbying groups; and ABA, which ranks No. 11.

As a counterbalance, a coalition of consumer groups could be formed to coauthor a long-overdue Real Estate Consumer Bill of Rights, both to correct ongoing problems and guide the industry’s evolution. This Real Estate Consumer Alliance, or RECALL, could include a variety of groups including CFA, Consumers Union (publishers of Consumer Reports), National Consumer Law Center, National Consumers League, American Council on Consumer Interests, Privacy Rights Clearinghouse, Electronic Privacy Information Center, Consumer Project on Technology, USPIRG and AARP. Because homebuyers and sellers have the most to gain – an average savings of $6,000 per transaction, according to the Wall Street Journal – RECALL could be self-funded through online donations from the anticipated $30 billion annually in savings. That kind of savings should be enough to wake the average consumer. But time is running out to wake the sleeping giant.

http://realtytimes.com/rtapages/20010430_view.htm

Related Articles

Call for Real Estate Consumer Bill of Rights: 5th Anniversary

BillofrightsFive years ago this week, a coalition of leading real estate consumer advocates nationwide — including buyer agents, fee-for-service consultants, and for sale by owner publishers — cosigned an petition calling for a Real Estate Consumer Bill of Rights which Consumer Union, publishers of Consumer Reports, echoed in their testimony in Congressional hearings on banks as brokers:

"We also call on Congress to hold hearings on the real estate marketplace. …Are consumers being treated fairly by real estate brokers? Are commissions priced fairly?" asked Consumers Union legislative counsel Frank Torres during testimony May 2nd before the U.S. House of Representative’s Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit.

"Perhaps what we should be talking about is a Real estate Consumer Bill of Rights."

Bloggers, consumer advocates, and real estate innovators — not to mention the US Department of Justice and Federal Trade Commission — are renewing investigations into competition in real estate with a new urgency fueled, in part, by discrimination against flat-fee MLS listing services and their customers, plus industry-supported efforts to establish minimum levels of service for brokerages in an increasing number of states.

Homeowners trying to sell "for sale by owner" also face subtle and overt forms of discrimination, as do homebuyers using alternative real estate business models.  If you’ve been a victim, we’d like to hear from you privately at RECafe@mac.com. 

Congressional hearings or not, doesn’t it make sense — as it did five year ago — to ask regulators and other public officials to begin talking about a long-overdue Real Estate Consumer Bill of Rights?  Last October, The Real Estate Cafe began blogging about individual articles, and would be glad to restart that discussion before the National Association of Realtors Midyear Legislative Meetings in Washington, DC, May 15-20, 2006.  We invite your comment below; on our record a podcast line:  617-876-2117; or if you’re really interested in getting involved, our wiki.

Shouldn’t real estate consumers be free to choose based on informed consent?

Surveys conducted by the real estate industry over the past decade repeatedly find that some consumers want the convenience of one-stop shopping.  In response, real estate consumer advocates advise consumers to look carefully at the trade-off between time-saving convenience and cost, and to protect their right to make free, informed choices.  That’s the goal of this second article of a proposed Real
Estate Consumer Bill of Rights.  Initially drafted in 1999, how would you update it for 2005 and beyond?  If federal regulations were finally changed to allow banks to provide residential brokerage services, would this language need to be expanded? 

DRAFT REAL ESTATE CONSUMER BILL OF RIGHTS

2. Right not to be coerced into using products or service providers.
No consumer should be forced, without the consumer’s full informed
consent, into using any particular service or product. Consumers should
especially be cautioned where the real estate professional may, by
office policy, be required to act as a dual representative or shift
services without the consumer’s full informed consent. Consumers have
the right NOT to use real estate brokerage services and to “self-represent” if so determined by the consumer.

As written in an earlier blog post entitled, Cell phone bill of rights? Why not real estate?, The Real Estate Cafe will:

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