Disrupting Real Estate Agents’ Commissions

New Orleans     If you ever had to sell or buy a house or even just look around in a neighborhood to try and sort out sales’ pitches from real values, you’ve often dealt with real estate agents in their bizarre and curious world. They speak of their commissions and rates as if they were set by divine law and handed down on tablets, although that is far from the case. They ask you to sign documents that there is no conflict of interest when they are sometimes representing both the buyer and the seller, when obviously they are the only winner there in an Alice-in-Wonderland world of make believe. Times may be changing.

The internet is of course one area where there’s action. People self-list on Craigslist, if you want to go there. Zillow ascribes values for houses and rentals based on its own algorithms and offers direct connections to agents where you might have an interest, even though it does little on the transactional side other than adding its cost to the fixed commission. Nonetheless, there’s more information in the market which helps consumers.

Looking at commission rates in other countries for residential properties might make you feel like an even bigger sucker. Only Russia and China once had higher rates than the USA, but their nearly 8% bite in 2002, according to The Economist, by 2015 had been pushed back to 2% in China and 4% in Russia, leaving the USA as the big dog here where its 6% average only dropped a hair to about 5.5% in the same time span. Britain and Singapore are less than 2%, Hong Kong, Finland, and Australia are at 2% with China. Canada is about 2.5%. Germany joins Russia at 4%. Spain is at 5%, the only close competitor to the US.

Competitors who want to disrupt this practice and do the job for 2% claim the resistance lies in the monopolistic, anti-competitive practice of the Multiple Listing Service (MLS) where “nearly every broker in America lists and searches for homes and the National Association of Realtors (NAR), a trade association with 1.3 million broker members in America, which regulates it.” If this were a labor union, the government would already have stepped in, and lawsuits would have already alleged restraint of trade for price fixing!

It turns out that there are some class action suits on the court dockets now challenging this dominance and some of these good-ol-boy practices and commission splitting arrangements, especially on the front end. The Justice Department has also begun to look at whether or not agents are steering buyers towards homes with the highest commission payoffs to them rather than objectively, if there’s such a thing in the real estate market. The realtors’ association scoffs at all of this, but stocks for some of the publicly listed real estate firms are falling in fear that these inflated commissions won’t last.

It matters to consumers. $1.5 trillion in homes changes hands every year. Tack on an extra percent or two, much less almost four, and you are talking about ripping off homebuyers and sellers by up to $4 billion. The house the real estate brokers association has built on consumers’ backs should not be left standing.


Steve Tingley-Hock is a Voting Rights Hero

New Orleans    Hey, let’s give three cheers for a peoples’ hero today in these dark times.  I’m raising my voice for Steve Tingley-Hock who has been a central figure in calling foul in Ohio to voting purges that have led to more than 40,000 people of 235,000 on the Secretary of State’s list being found to still be eligible voters.

I found Tingley-Hock’s story deep in a piece in the New York Times by reporter Nicholas Casey, so I’ll let him tell Steve’s great story, before I add to it.  Here’s what he says, beginning with a quote from Steve.

“If you look at the numbers, it’s hard not to be jaded by this,” said Steve Tingley-Hock, who runs a watchdog group called the Ohio Voter Project and initially discovered the error.

How Mr. Tingley-Hock, a volunteer who doesn’t work for the government, chanced upon such a big mistake shows the kind of unusual backstop the state now depends on to carry out its work correctly.

A database consultant by trade, Mr. Tingley-Hock in recent years developed a hobby of spending his weekends downloading the state’s voter data onto his own laptop where he manages a database that keeps track of every voter in Ohio.

“Someone needed to keep a record of what’s happening in the voter population,” said Mr. Tingley-Hock, who thinks the purges are targeting certain demographic groups, especially young voters. “If you want to know what I’m doing on a Saturday morning, it’s downloading these files from the state.”

Working on a shoestring budget and donations from relatives, he keeps track of similar data from six other states, including North Carolina and Florida, which have both been criticized for voter restrictions.

When Mr. LaRose’s office released the spreadsheet with the list of about 235,000 names to be purged, Mr. Tingley-Hock ran them through his own database and found thousands of names matching active voters.

“It’s a simple query if you have a database management system,” he said. “A guy at his dining room table can figure this stuff out. It’s not rocket science.”

I love this guy!  Shoestring.  Volunteer.  Donations from his family.  You look at his website and it seems to still be talking about 2016-17.  But, he’s not jaded.  He’s determined!  Hunkering down on Saturdays at local cafes or his own dining room table, he just saved 40,000 votes.  That’s not all.  Another half-dozen states benefit from his democratic obsession, including the battlegrounds of Florida and North Carolina, where hanky-panky might have free rein.

Not as many, but some props go to Republican Secretary of State Frank LaRose for making this not only transparent, but in his words “crowdsourcing” the list before people were purged so that super-citizens like Steve and regular citizens can make sure they are squared away as voters and eliminate mistakes on the front-end.

Now once we finish praising Brother Steve and giving at least an attaboy to LaRose, we have to ask the “simple query” to use Steve’s words, why isn’t every state taking the time with their resources to create similar databases and making the lists available on the front end so that a voter purge is really a weeding out of the deceased and wrong addresses, rather than a political tool of voter suppression?