The California Association of Realtors has worked to provide an open environment for alternative real estate business models; the Houston Association of Realtors invited the manager of an alternative real estate business model to participate in its MLS committee; and the Wisconsin Realtors Association has worked toward equal treatment for many business models, said participants in an Inman News conference Thursday.
Joel Singer, executive vice president for the California Association of Realtors; Bob Hale, president and CEO for the Houston Association of Realtors; and Bill Malkasian, president of the Wisconsin Association of Realtors, discussed their associations’ openness to a range of business models during their participation in an audio conference titled “The progressive Realtor association.”
“From my standpoint, the California real estate brokerage environment is among the most competitive,” said Singer, with a full range of limited fee, limited service and full service business models. “We have a very vibrant and competitive marketplace.” Some business models may benefit from swings in the real estate market while others may fall out of favor, he said.
An association aim, he said, is “making sure that the consumer has choice,” and that the consumer’s interests are well-represented in the real estate transaction.
“Houston’s been very open to new business models,” said Hale. “Our job is not to pick and choose who are the good guys and bad guys.” The marketplace ultimately will decide which models will stay and go, he added. “Everyone’s invited to participate.” The association has been looking at issues relating to so-called “entry-only” business models that place property listings in the MLS but perform no other services for consumers, he also said.
Malkasian said that “competition is healthy” among various real estate business models, though he said there may not be the depth in alternative business models that exists in the Houston market and in California. “My board of directors are the 10 largest companies in the state. I am proud to say that I probably have the support of the larger companies in the state.” The state association has studied brokerage-service issues in states such as Illinois and Texas, he said. Illinois earlier this year passed a law that sets minimum-service standards for real estate agents entering into written contracts with consumers, while similar standards have been the subject of heated debate in Texas.
A task force in Wisconsin has been engaged in studying brokerage service issues, he said, and that effort is nearing conclusion. Malkasian said that some alternative business models are represented in the same “club” as other real estate companies and they have “got to be treated the same as everyone else,” though he said that a couple members in this club aren’t “let in the decision-making process — (there are) some that are so rabid that they will take the information and use it against the industry. I think that’s not fair and I think that’s not what the members would expect.”
Jay Reifert, a listener to the call who operates an exclusive buyer agency in Madison, Wis., asked Malkasian whether the association’s board is truly representative of all real estate businesses in the state, including smaller companies, and Malkasian explained that in addition to the 10 directors who represent the largest companies in the state, there are about 15 individual directors who represent firms ranging in size from one-person offices to 50-person offices, and the board has a total of 36 members.
Reifert this week filed a complaint with the Wisconsin Department of Regulation and Licensing and with several federal agencies, claiming that there are high-level meetings taking place in the state that seek to change real estate agency laws that could allegedly violate antitrust laws. Rick Staff, general counsel for the Wisconsin Association of Realtors, said today that he has not seen the complaint, though he said it is not possible to violate antitrust laws by introducing legislation. “Antitrust law does not regulate legislative activity of any kind,” he said.
A license law task force has been in place for more than two years in the state, Staff added, and Reifert has been invited to attend task force meetings. A task force conference call is scheduled next week, he said. “Members outside the task force have been welcome,” he said.
Asked about the real estate market in 2005, Singer said the California market has continued to perform above expectations. “The market continues to strengthen. While home-price appreciation may slow down in 2005, “we’re still looking for double-digit appreciation,” he said. This year has been a roller-coaster ride in some parts of the state, he said, such as Orange County, where inventory in some areas was at its slimmest on record in February and March, ballooned to “the most explosive growth in inventory that we’ve seen” over the summer months, and has since thinned again.
Housing affordability continues to be a top policy issue for the association, he said, and the association has backed legislation that seeks to expand the housing supply.
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Hale said that inventory has been growing in the Houston area, with active listings up about 12 percent from last year. A big issue for the Houston association is a public Web site that delivers hundreds of thousands of leads to its members each year, free of charge. Real estate tax issues are also an important subject for the association these days, he said.
Tax issues also are being watched closely by the Wisconsin association, said Malkasian. Unit sales in Wisconsin are up about 9 percent this year over last year, he said, and lake property and land in Northern Wisconsin has been a particularly hot commodity.
The panelists in the conference call also addressed the issue of consumer complaints and service. Singer said that the state’s response to consumer complaints has been improving. As consumers have become more educated about real estate transactions and services, he said that consumers in California are definitely demanding more from industry professionals. “We know that the consumer expects more from us. Are we going the extra mile?”
Malkasian said that the population of real estate agents has grown dramatically, and it may not be enough to simply mandate more hours of training in order to get a real estate license. Brokers in some cases are not adequately managing the supervision of their agents, he said, and there may need to be an effort in this area to better enforce the supervision of agents.
Hale, Singer and Malkasian said the National Association of Realtors will likely have a host of major issues to address in the next year, including tax reform, regulation of government-sponsored entities such as Fannie Mae and Freddie Mac, RESPA, keeping banks out of real estate, and ironing out VOW/IDX policies, among others.
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