Dear Monty: Our home is for sale. Our agent called to set a co-broke appointment. At the appointed time, the doorbell rings, and the buyer is at the door with no agent. I invited them in to wait. We quickly determined they would not buy our house. They needed a large lot, and we had a small backyard. About 20 minutes after they left, the agent showed up. I asked the agent why they were unaware of the lot size. The answer was, ” It wasn’t clear on the datasheet, so I thought I’d ask when we were here together.” I was shocked. She left before I could vent. She apologized for being late but missed the inconvenience she had caused me and the prospect. Should I complain to my agent?
Monty’s Answer: The National Association of Realtors (NAR) has done an excellent job convincing real estate agents and consumers that agents are professionals necessary to avoid financial risk when selling or buying a home. My experience in real estate has evolved from an enthusiastic evangelist into
a solid contrarian. I believe it is financially risky to use multiple listing systems (MLS). Here are six more reasons
1. The dominant brokerage model and the multiple listing system (MLS) are over one hundred years old. Technology rendered these systems obsolete almost 20 years ago, but NAR and its membership fight to retain high commissions. Why? Oddly enough, these old models are so inefficient that real estate companies must maintain them to stay solvent.
2. NAR has about six hundred MLS companies and a nine-hundred-member board of directors. The industry is a highly fragmented, chaotic, and loosely managed network of independent contractors tied to the agent-driven, non-public, multiple-listing system. The industry’s size, traditions, myths, and failures have blinded the sector and the outside world to these fundamental flaws that expose consumers to invisible and significant financial risks. Here is a link to a 2015 NAR report where 7,800 agents concluded their biggest fear for the future was that, ” The real estate industry is saddled with a large number of part-time, untrained, unethical, and/or incompetent agents. This knowledge gap threatens the credibility of the industry. “
3. MLS systems expose consumers to unqualified and duplicitous agents that use asymmetry to further their advantage. When you hire a real estate agent, you only know how well they will work afterward. Why? The unqualified agents mimic the good agents. They use the same scripts and buy the same cars, clothes, and watches. Here is a link to agent’s different motives for choosing real estate as a career, which I have witnessed.
4. The customers have no direct access to the MLS data. The system filters the data to force the customer to trust another person (the agent) with a significant conflict of interest.
5. Agents manipulate the MLS. There are many ways this happens. Here is a report by Market Business News describing several practices most consider unethical.
6. When a new listing appears in a balanced market, about 30-35 percent of all listings expire unsold with the original listing broker. While every local market differs, they would still be inefficient even if expired listing percentages were lower.
It takes time and energy to explain. Chalk it up to experience and move on.