Inman News has lumped mortgage professionals and real estate professionals together. I think that confuses the issues. Does it?

The 10 points list is unfocused and for the most part so is the discussion that it generated. Since I'm a real estate broker I'll be specific on 2 points (not from the list).

1. Offers of Compensation: Listing agents routinely enter into listing agreements and tell the seller that the buyer's agent has to take whatever commission is offered to them via the MLS. This, of course, is untrue. Most of the time the listing agents believe that it is though. (This is due to tradition and lack of education.) They even go so far as to ignore buy side brokers agreements with their clients. Ex: Buyer and their agent entered into an agreement requiring buyer to condition all offers on the seller's (not the seller's agent) agreement to pay the buyer's broker a commission of x% of the sales price. When the contract arrives it says x% minus $50 or minus $150 or some other arbitrary number or even y% minus $50. It was the agent - not the seller that came up with that and it is an interference with a legal contract between the buyer and their agent. It interferes with the ability of a buyer to negotiate a commission with their agent. The FTC and the DOJ don't seem to care. If they care about price fixing and how it harms consumers - they should.

2. Disclosure: Specifically: agency disclosure. Although required in most states (maybe all) it is not really enforced. In New Jersey explaining 4 forms of agency relationship (including one that is not an agency relationship) is required. They even have a form - the Consumer Information Statement. But what if an agent fails to explain that they are a dual agent prior to showing a house to a potential buyer. (undisclosed dual agency) Does that automatically mean that the buyer can then go and get their own agent to represent them? No, it should, but it does not. As Tom Wemett might say: "One Date You're Married" see: http://www.savvyhomebuying.com/marriedpartone.html

Disclosure rules have no teeth.
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These two issues go to the heart of the lack of true competition in the real estate industry. Indeed, part of the HUD-1 (the settlement statement that is universally used) is predicated on the existence of the first issue. See section L (the 700 lines) at: http://www.hud.gov/offices/adm/hudclips/forms/files/1.pdf
What is this about a 'division' of commissions. If I independently negotiate my commission with my buyer client - it is not divided. It is simply paid to me by the buyer or if so negotiated by the seller on behalf of the buyer. It is not complicated or at least it shouldn't be.

Given that there is an institutional structure in place, there can be no real competition independent of that structure and so till that changes not much else will either.

Paul Howard, Broker
www.NJHomeBuyer.com Realty
811 Church Rd Ste 111
Cherry Hill NJ 08002
paul@SouthJerseyHomes.com
www.twitter.com/paulhoward
MEMBER: NAEBA www.naeba.org