A week and a half after economists released an academic study of for-sale-by-owner homes in Madison, Wisc., the National Association of Realtors penned a response, calling the study "misleading." The study concluded that home sellers in Madison, Wisc., did not get a higher price for their home when listing with an agent.

NAR President Pat V. Combs wrote in a letter:

"The study shows -- but the Times didn’t bother to mention -- that only two-thirds of the listings at the for-sale-by-owner Web site were sold, while more than eight of 10 of the MLS listings were sold.  Last year, the Web site carried less than 10 percent of all area listings, and less than that so far in 2007.  It’s clear that home sellers in Madison are voting with their feet because they know that Realtors add value to the real estate transaction."

Combs points out that 85 percent of home sellers nationwide list with an agent.

The study's authors -- Igal Hendel, Aviv Nevo and Francois Ortalo-Magne -- said the results imply two things for the brokerage industry in Madison:

"If one believes that sellers are aware of the FSBO option, and know that there is no premium associated with MLS, then our results suggest that a large fraction of the population is willing to pay a significant amount for the services provided by realtors," the report concludes. In which case, they say, Realtors will continue to maintain high market share.

The other view of the study's conclusion is that the FSBO Web site is still relatively unknown, and as more people become aware of it and the finding that there may not be a sales price disadvantage to using it, its share of the market will increase, the authors note.

If you missed the story, here's the Inman News coverage. The study can be found at this link.

I was at a dinner last week where the issue of banks entering the real estate brokerage business came up during the conversation. Two of the brokers at the table were particularly concerned about the issue of credit unions being allowed to enter the brokerage business. Specifically, they said that credit unions are not playing on the same playing field as brokerage, because credit unions are exempt from certain taxes where brokers are not. A number of credit unions offer commission rebates where you work with one of their approved Realtors. This, however, is different from running a separate brokerage. 

I find it particularly interesting that NAR plans to launch a credit union. Is this new entity really a strategy for Realtors to compete against the banking industry, or, as they have said in their press releases, that the new credit union will serve only Realtor members?

If credit unions truly do have a competitive advantage, will brokerages shift from having mortgage companies to having credit unions as a way to compete? What's your take on this issue--are credit unions a greater threat than banks?

--Bernice Ross, RealEstateCoach.com

ZipRealty late Monday announced that Richard Sommer has resigned as CEO of the publicly-traded real estate brokerage company for personal reasons. The company has appointed Patrick Lashinsky (pictured left), currently the president of Zip, to take on the role of CEO. Lashinsky also will become a member of Zip's board of directors.

Sommer joined ZipRealty in September 2006 and will maintain his seat on the company's board, the company said in an announcement. Sommer previously was the CEO of HomeGain and held key positions at IndyMac.

Don Wood, ZipRealty's Chairman stated, "We are sorry to see Richard leave, but are pleased to have him remain actively involved with the Company by staying on the Board of Directors. We wish him all the best in his personal endeavors. That said, we believe that Pat can transition smoothly into the role of CEO and be a terrific leader of the Company. Pat joined ZipRealty in its first year of operation and has been instrumental in its growth and evolution. We are excited about his passion to make ZipRealty one of the largest and best brokerages in the country."

Zip last month reported a $3.1 million net loss in the first quarter. Despite the loss, the company continues to expand brokerage operations into new markets and recruit more agents.

Zip stock (Nasdaq: ZIPR) fell .05% in afterhours trading at $7.47 a share.

RE/MAX International, a global real estate franchiser, today announced the acquisition of RE/MAX Northwest, the largest RE/MAX franchise operation in Washington with 320 agents working in six offices.

Dave Liniger, RE/MAX co-founder and chairman, said in a statement, "We plan to provide the support services RE/MAX is famous for, but for the agents, business will continue as usual. There will be no name change and no change in personnel."

Gary Hackney, one of the three owners of RE/MAX Northwest who purchased the operation in 2002, said that the company is the third large franchise operation that RE/MAX International has acquired in the past seven years.

"It is a wonderful opportunity for us to be able to team up with the franchiser and be able to build a brand name," Hackney said.

Still clearing the dust from last Sunday's "60 Minutes" segment on real estate commissions, Realogy Corp. shared with Inman News the following letter sent to the CBS show's producers.

Dear Mr. Fager:
Your story on the real estate industry that aired on May 13th had more holes than a leaky roof.
Putting aside the inaccuracies regarding "sacrosanct" commission rates, lack of industry oversight and state governments conspiring to stifle competition, the segment grossly oversimplified the complexity of buying and selling a property.
Real estate brokerage is a performance-based industry. Clearly, not all real estate companies are alike. Results will vary dramatically based on a variety of factors, including the experience and track record of the professional you select. Picking an agent to represent you based solely on discount, rebate or other cash back scheme may seem like a good idea at first glance, but not always at the closing table when all is said and done.
The bottom line is that consumers have ample choice when deciding which real estate company and business model they prefer to represent them in a transaction. Competition is good for the consumer and the industry and is the basis of our free market economy. At the end of the day, the companies that offer the best value proposition to home buyers and sellers will prosper.
Respectfully,
Alex Perriello
President & CEO
Realogy Franchise Group

**See the industry's reaction to the 60 Minutes segment at, "Some say '60 Minutes' misses the mark," and Inman TV's analysis of the airing.

Word is out that the much-anticipated 60 Minutes segment on the real estate industry will air this Sunday night and the shrewd PR team at the National Association of Realtors has already been out doing damage control. A letter from the national trade group to its smaller associations has been circulating, giving some talking points on how to handle media and member inquiries about the issues raised in the segment.

Among the talking points NAR suggests: Realtor associations support all business models and favor none; real estate is a highly competitive business with one in 86 adults now a Realtor; there is no such thing as a "standard commission."

The letter notes: "Bottom line is that we don't expect that the segment will make Realtors happy but it could have been much, much worse. Be glad that it's Mother's Day and the show will probably draw fewer than its average 14 million viewers."

Had lunch with a broker friend last week and we got to talking about real estate commissions. She thinks it would be really interesting to do a study on the commission rates that real estate agents offer when selling their own homes. She said she's amazed at how agents will offer the buy side as low as 1 percent with a straight face and then turn around and explain to their seller clients why it's important to offer buyers' agents 2-3 percent.

It's been awhile since Inman News dipped the thermometer into the commission ocean. What is going on out there? Commissions up and sailing well? Slower market prompting sellers to pay top dollar?

A bizarre incident in the online edition of the Janesville Gazette, a newspaper in Southern Wisconsin:  A real estate agent "can't believe she didn't realize that a form on the bed at a house she showed Monday night was a woman who apparently had been dead for two weeks." A couple of prospective buyers reportedly discovered the body while walking through the home.

The owners of a real estate office were reportedly shot to death at a five-star resort in Laguna Beach, Calif., on Sunday after they allegedly pointed a gun at police officers.

Kevin Christie Park, 49, and his wife, Joni Lynn Park, 48, of Mission Viejo, Calif., reportedly checked into the Montage Laguna Beach resort and spa on Saturday, "registering under false names and paying with cash," The Orange County Register reported.

Kevin Park was the owner and broker of Park Pacific Properties in Mission Viejo and Joni Park was an agent for the firm, according to the California Department of Real Estate.

Police said the couple had a bag of ammunition, and Joni Park had allegedly threatened to kill bystanders, the Los Angeles Times reported. According to one report there was "a crazy naked woman with a gun" at the Montage.

Police spoke to the couple from the patio in front of their room and the Parks allegedly took turns pointing a gun at officers. The Los Angeles Times also reported that the couple's gun was fully loaded when it was recovered by police.

Kevin Park had reportedly been licensed in the state since 2000, while Joni Park had been licensed since 1996.

Sounds like the premise for a new reality show. And it is.

HGTV, a cable network that is home to other popular real estate reality shows including "House Hunters," "Curb Appeal," and "Designed to Sell," is focusing on a group of RE/MAX Realtors in New Jersey for a new series that will begin April 29.

The series, "Bought & Sold," is a slice-of-life look at the business of real estate. The cast members of the "docudrama" all work for Re/Max Village Square Realtors. "They come from a wide variety of backgrounds -- acting, teaching, journalism -- yet all are convinced the real estate market is where they really shine," according to the HGTV Web site.

Among them are Roberta Baldwin, an agent who has worked as a journalist, book author, newspaper editor and marketing and publishing executive; Steven Gendel, a fourth-generation real estate agent; Nancy Gentile, a former actress and spokeswoman for several Fortune 500 companies; and Toni Goncalves, a former pharmaceutical company supervisor.

A narrator for the show's trailer states, "Bought & Sold is the reality of real estate. Learn their tricks of the trade to get a house sold."

Reality television is old hat for Realtors -- several agents have been featured on shows ranging from "Survivor" to "The Apprentice" (see Inman News article.)