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Dear Fellow Homeowner:
The New Year is a time of promise and hope. With a growing economy and
low unemployment, more Americans than ever are buying a home and many
more dream of home ownership. While home prices have skyrocketed and new
technology has reduced the cost of doing business, real estate
commissions have increased in actual dollars and consumers are paying
more than ever for the same level of service. The Internet has
changed the way our society works, plays and communicates. In most
industries – travel, finance and retail just to name a few – the
Internet has expanded consumer choice, increased the availability of
information, and lowered the cost of goods and services for consumers.
But the promise of the Internet – the increased choice, competition and
lower prices that the Internet has brought to other industries – has not
come to the real estate industry. Why?
According to one real estate industry trade publication it is because a
few large real estate conglomerates are manipulating their national
trade association into adopting industry rules that make it harder for
those of us who would like to use new business models to save money in
our real estate transactions. In many states real estate associations
are promoting laws that would prohibit rebates or outlaw real estate
service companies who specialize in listing your home in the local
multiple listing service (MLS) which also feeds your listing to many
other local brokers’ websites. Some charge as little as two hundred
dollars to list your home in the MLS, but you have to hold your own open
houses and do your own negotiating. At the national level, until the
federal government stepped in, the National Association of Realtors was
poised to adopt an industry rule that would allow a broker to withhold a
home seller’s listing from the MLS without telling the home seller. MLS
listings appear on many real estate brokers’ web sites, and with nearly
80% of home buyers using the Internet in their home search the MLS is an
extremely important tool for selling your home. Although consumers, and
small real estate brokers and their agents would all suffer from this
reduced exposure, the large real estate companies would benefit because
such a rule would enable them to drive their smaller competitors out of
business whether they be a traditional broker or an inexpensive consumer
alternative.
We are not the only ones who believe that the system is broken and needs
reform. The U.S. Department of Justice (DOJ) recently filed suit against
the National Association of Realtors for blocking competition, and the
Federal Trade Commission and DOJ sued some states for erecting barriers
to competition in real estate and has urged state legislatures in other
states to refrain from passing anticompetitive and anticonsumer laws. In
Congress, House Financial Services Committee Chairman Michael Oxley
ordered a GAO report based on his concerns that the promises of the
Internet were not reaching consumers in real estate. The Consumer
Federation of America has entered the fray, criticizing the industry’s
anti-consumer practices. Even the editorial board of the
business-friendly Wall Street Journal has criticized the real estate
“cartel,” calling its practices a “racket.”
We know that we’re up against a powerful lobbying force. At the state
level, the large real estate brokerage companies continue to brazenly
advocate for legislation that restricts consumer choice and harms
competition, despite the fact that both the Department of Justice and
the Federal Trade Commission strongly objected to the bills. Until now
their large political action committees and powerful grassroots networks
have overpowered President Bush’s federal agencies. It is now time to
raise the voice of the nation’s 75 million homeowners.
We believe that homeowners and those who dream of buying a home – must
be protected. So we are raising our voice, and we ask you to join us. We
have already contacted key legislators in Congress and key state
legislatures and warned them of this effort to force you to pay many
thousands of dollars more than necessary when you sell your home.
However even with the good work of the U.S. Department of Justice, the
Federal Trade Commission, our efforts, and the opinions of respected
publications like the Wall Street Journal, we still need your help in
expressing your views to your state and federal legislators.
We have the ammunition to help you create your own message – this letter
and the links to the documents pasted below. Feel free to copy and paste
any of the content into your message. At the bottom there is also a link
to look up the email address and/or phone number of your state and
federal legislator. Only you can take the next step – a few minutes of
your time to contact your elected representative and ask that they
oppose any laws or regulations that would deny or limit your option of
marketing your home in any fashion you desire.
Working together we can succeed!
Sincerely,
Bruce Hahn
President, American Homeowners Grassroots Alliance
Links:
Wall Street Journal Editorial on Real Estate Competition
(pdf)
2005 GAO Real Estate Brokerage Competition study summary
AHGA Minimum Services
Comments to Texas Real Estate Commission
Justice Dept., FTC warn against limited-service real estate rule
Realtors Aghast at
notion of competition
Standing up for
homeowners at every turn
Realtors,
Regulators face off over online home listings
Federal antitrust
agencies attack Missouri real estate law
Cutting the commissions
NAR president sponsored
limited-service law in Utah
Realtors sued over
access to listings
Brokers Fiddle as Real Estate
Burns
Discount Firms
Blast Realtors
Pay Less for Real Estate
Lobbying to Sell Your House
Contact your Federal and State Legislators
Real Estate: Why are
you paying 6%? (pdf)
Realtors Fight Cost Cutters with Rule to Keep
Fees High (pdf)
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