I have concerns for the well-being of the brokerage industry. It all relates to the overall number and mix of full-time, part-time and in some cases, no-time agents in the business.

As an industry we manage the transfer of one of the biggest and most significant assets consumers own - their homes. How can we place this transaction into the hands of a "part-time" or "no-time" Realtor? Now, more than ever, we need higher standards for licensing and in some meaningful way designating true brokerage professionals.

Thankfully, the FAA has recognized this need. I don't know about you but I would prefer an airline pilot who has successfully landed the plane 3,000 times to one that has done it now and then. Due to the high standards for all pilots as set by the FAA, we are much safer travelers.

What about real estate? My suggestion: First, let's recognize and acknowledge the need and lobby hard as a brokerage industry for change (NAR, that's you), increase the minimum licensing standards (state licensing officials, your turn), raise the amounts of the annual dues to be recognized as a true real estate professional (NAR, state, local boards, that's your move - be brave) and brokers, retain and "hang" the licenses of only the highest quality full-time real estate professionals. After all brokers, it's your "signature", your brand that is on all those agent business cards out there.

It's a sad statement when it is only the tighter brokerage market now that provides the impetus for such change, very sad. The new "better" in real estate brokerage is truly less - what about 200,000 professionals closing 5 million transaction sides per year > in any market? Less doing more. Sounds like at least a good start to me.

--Ken Jenny, TranCen

The Indianapolis Star newspaper reports that Indiana Attorney General Steve Carter is "mounting a vigorous prosecution of real estate brokers and salespeople in the state," with 640 active investigations of brokers and sales agents.

"The crackdown ... follows a year in which his office brought disciplinary complaints against 170 appraisers," the newspaper reports. Carter's office lodged complaints against 188 real estate professionals in 2006, compared to 17 in 2004.

Tim Reed, chairman of the state's Real Estate Commission, said in the article that there are a number of investigations related to land contracts and rent-to-own schemes. The state passed an Indiana Homeowner Protection Act in 2004 in response to predatory lending practices, and consumer complaints have fueled many investigations.

The New York Post reports the latest twists in a $40 million sexual discrimination lawsuit brought against Realogy Corp. (formerly Cendant Corp.) officials in July:

Lisa Biase, who had served as general counsel in Cendant's Coldwell Banker Real Estate division, charges in the lawsuit that she was marginalized by Cendant executives "after she complained several times about sexual harrassment in the office," the Post reported in a March 30 article. Biase was allegedly "unexpectedly dismissed in April -- five days before she was to receive several million dollars from the spin-off of Realogy into a separate public company," the article states.

The Post reported that Biase hired a private detective who on several occasions followed Pat Cardwell, who at the time was the company's general counsel and chief ethics officer. The private detective allegedly witnessed Cardwell consuming bottles of wine in a vehicle on the night before a sworn deposition, while Cardwell stated in the deposition that he "only had one glass of wine at home," according to the article. Realogy officials did not offer comment in the Post article.

A lawyer for Biase reportedly sent a letter to a Realogy lawyer last month stating that Biase "feels a social responsibility to alert Realogy's board of directors and shareholders" about Cardwell's alleged actions. Cardwell left the company days later. Realogy shareholders voted March 30 to approve a buyout deal worth about $9 billion with Apollo Management, a private equity firm.

Typically, that's what news organizations try to do -- look out for the consumer. But of course, real estate is no typical business. Redfin stirred the media pot again this morning with this Inman News exclusive, "The Real Estate Consumer's Bill of Rights." The company created a set of basic consumer rights, including the right to know how your agent is being paid, the right to see all the houses that are for sale, and the right to have an open discussion about houses on the market. (See full story for the full list of 10.)

From Redfin: "To make real estate the industry we all want it to be, we have to protect consumers' ability to make informed choices by acknowledging a basic set of rights upon which everyone can agree. We thus hope to build a coalition of brokers committed to these rights so that consumers can buy or sell houses through any of us with confidence."

We agree and suspect that many others will too.

The company has already won the support of those who've criticized its past performances and statements in the media, including Realtor and blogger Kevin Boer, who gives his take over at the 3 Oceans Real Estate Blog.

The real estate industry suffers from bad public perception as shown in a recent Harris Poll. An initiative like this could work to improve that.

Tell us your opinion here at the Inman Blog or write a letter to the editor at opinion@inman.com.

Realogy shareholders are set to vote tomorrow on a proposed buyout by an affiliate of private equity firm Apollo Management L.P. (No, there hasn't been a proposed name change for Realogy.) The deal is worth about $9 billion.
The vote will be held at 10 a.m. Eastern Time at the Hilton Parsipanny, 1 Hilton Court, Parsipanny, N.J. Stockholders of record as of the close of business on Feb. 20 are eligible to vote. The deal would take the public company private. Realogy spun away from parent company Cendant Corp. last year to become independent. Realogy's franchise and company-owned real estate brands include Coldwell Banker, Century 21, ERA and Sotheby's International Realty, among others.
Several shareholders filed lawsuits once the deal was announced, and the lawsuits have been consolidated into two separate cases -- one in Delaware and one in New Jersey. A tentative settlement agreement was announced for one of the consolidated shareholder actions, subject to court approval and other conditions.

Broker owners are facing new recruitment hurdles. The frothy markets of two years ago are a distant memory; today's broker faces the reality of recruiting top producers from among an agent pool that is not growing like it did before.

In my experience, I've found most brokers are generally successful Old Guard Realtors who have built their businesses based on the tried-and-true referral-based methods. They are generally not tech-savvy and don't understand how to effectively recruit using technology training (including blogging) as a value proposition.

At Transparent Real Estate today, I discuss how today's agents are looking for a cutting edge to ramp up their business... there's an opportunity for brokers who "get" technology to apply their vision as a recruitment tool, because not many are focused on this aspect.

--Pat Kitano, Transparent Real Estate

RealtorUnion.com is a new Web site that allows real estate agents and brokers to "freely and anonymously post, review and blog on specific broker's commission schedules, services and costs. As such it will allow agents to  quickly compare brokers, and brokers to freely advertise their services to agents," according to an announcement about the site.

The Web site is intended to help Realtors sort out which real estate brokerage company to work for. "Traditionally broker costs and services to agents have been time-consuming to gather, requiring an interview with the broker, or risking harmful rumors by asking an acquaintance in the business," a Web site description states.

"Here you will find all these broker services and costs at your fingertips, submitted by fellow agents confidentially."

It's not clear who created the site and there is no contact information provided at the site.

Registration to the site is free, and registered users can post information about brokerage companies such as commission splits with the broker, the minimum monthly broker fee and the required fee per transaction.

When an update or correction is submitted for a particular entry, "the Web site will display both entries until we  review and delete the incorrect entry. This review process can take up to seven business days. We look at the following items to make a determination which entry is the most credible: 1) date of postings, 2) source of information field selected, 3) thoroughness of completed fields, and 4) general credibility," the Web site states.

Former ZipRealty exec (VP of sales) Dave Marron saw the Inman News story on the company's announcement that it's accelerating its expansion plans, and will hire as many as 700 new agents to push into eight to 12 new markets this year. Marron wrote to say a couple of things "popped out" from the company's conference call with investors "that just don't make sense" to him.

Marron says recruiting and retention are critical for ZipRealty, and that the company has problems in both areas. Unsuccessful agents leave because they're not making any money, and successful agents leave because they don't make enough. With agents making a 50 percent commission on an average transaction of $7,400 -- and an average of .6 transactions per agent per month -- Marron figures the average ZipRealty agent's income is $2,200 a month.

High turnover has been a big problem, he says, in part because ZipRealty agents are employees, not independent contractors. "The company believes that as employees, their agents should do whatever the company wants. Things like working weekends, weekdays, holidays, nights, mornings, and sucking up to management is expected. The reality is that the agents may be employees, but they don’t get salaries and they pay their own expenses (board dues, MLS fees, phone bills, gas, car payment, etc.). The promise of a steady lead flow and good technology (plus maybe 200 stock options) isn’t enough to compensate a good agent to make the kind of commitment zipRealty asks - not even with the $2,200 per month cash flow!"

As part of an increased focus on training, the company said it will consider hiring some trainers who are experienced teachers -- even if they're real estate novices. "Are they kidding?" Marron writes. "They would hire a trainer who can 'pick up the real estate craft quickly.' Would (Pillsbury), Madison and Sutro hire a legal trainer who could pick up the law craft quickly?"

Marron is no disgruntled ex-employee. He thinks ZipRealty can be a much bigger industry player. "They are the best in the industry at generating leads for their agents," he says. "They also have fantastic technology to help their agents convert those leads. Now is the time to make significant changes that will drive the financial results their investors and employees expected."

But Marron says he sees no indication that the company is taking steps he sees as necessary for success: improve the ratio of agents to managers (he thinks the company is management top heavy), get rid of rebates to homebuyers, and invest a greater percentage of the more than $88 million in cash and short-term investments he says the company is sitting on in the company's future (zipRealty says it will spend $6 million to $9 million on the current expansion).

Note: Marron also wrote BloodhoundBlog, and you can read his comments in their entirety in Russell Shaw's post.

--Matt Carter, Inman News

Some states allow agents to represent both the buyer and seller in the same real estate transaction or allow separate agents from the same real estate company to represent separate sides of the same real estate transaction, a situation known as dual agency or designated agency.

Some agents and brokers have thei r own rules for the road in dealing with dual agency. Dual agency has been a hotly debated issue in the real estate industry for many years, as it ties into Realtor ethics and responsibilities to clients. Here's an example of a company policy on dual agency from BloodhoundRealty.com: http://www.bloodhoundrealty.com/DualAgency.php.

How do dual agency laws benefit consumers? How do they benefit agents and brokers? When does dual agency work best? When does it not work? What are your personal rules for these transactions?

Case study: The Idaho Association of Realtors has introduced legislation, similar to measures proposed and passed in other states that have drawn fire from federal agencies, to mandate a higher level of real estate service. Legislation proposed by the Realtor association requires real estate brokerages to be available to receive and present all offers and counteroffers to their customers, whether or not their customers want those services. The bill is opposed by at least two real estate companies that offer low-cost, reduced-service options for consumers in Idaho. SOURCE: Inman News 02/28/07.

Definition: Anti-competitive practices are business or government practices that prevent and/or reduce competition in a market.

Some background.

What do you think?

Barely Legal by the Strokes.