Last year, the Kentucky Real Estate Commission took an unusual step in conducting an advertising campaign to promote the hire of real estate licensees in real estate transactions.

The radio ad campaign features comments about the negotiation experience of real estate agents and the risks of selling a home without an agent.

The ads seemed more in tune with the mission of a Realtor trade group than a state regulatory agency, said Terry Shortt, a real estate broker in Elizabethtown, Ky., who also runs a flat-fee real estate busines

Last year, the Kentucky Real Estate Commission took an unusual step in conducting an advertising campaign to promote the hire of real estate licensees in real estate transactions.

The radio ad campaign features comments about the negotiation experience of real estate agents and the risks of selling a home without an agent.

The ads seemed more in tune with the mission of a Realtor trade group than a state regulatory agency, said Terry Shortt, a real estate broker in Elizabethtown, Ky., who also runs a flat-fee real estate business.

“I felt as though their buttons were being pressed,” Shortt said. He said he questions why it’s necessary for a real estate regulatory agency to run ads promoting real estate licensees when there are no ads, for example, by a state agency that promote the use of licensed electricians.

“It would be appropriate for the Kentucky Association of Realtors to run ads like that but it’s not appropriate for the regulatory body,” he added.

In October, Shortt sent a public comment to the federal antitrust agencies, criticizing the radio ads and other commission activities. The ad campaign, he said, cost $20,000. And in a March 29 company announcement, Shortt called attention to the radio ads and declared a “crisis” in the industry “as consumers begin to question the actual value of real estate agents … and weigh other options now available to them.”

Kentucky’s real estate regulatory agency has come under fire a couple of times in the past year for other matters. Norman Brown, executive director for the commission, told Inman News last month that the U.S. Department of Justice and Federal Trade Commission took issue with commission-proposed legislation establishing a minimum level of services that all real estate licensees must perform for clients after entering into a written agreement.

In response, legislators had eliminated controversial provisions from the proposed legislation.

And in March 2005 the Justice Department filed a lawsuit against the Kentucky Real Estate Commission, charging that the agency limited competition among real estate brokers in the state by establishing regulations that prohibit real estate companies from offering rebates and other inducements to attract consumers. The commission settled the lawsuit in July, passing an emergency regulation that reversed the state’s restrictions.

Ron Smith, a broker at Ron Smith Realty in Louisville, Ky., who is chairman of the state’s Real Estate Commission, said the ad campaign was new last year, and he’s not sure whether the ads will continue this year.

“The real estate commission tried to do something … to give something back to the people who actually put their money in – the licensees,” Smith said. The budget for the radio ad campaign was paid for through the commission’s budget, and all of the commission’s budget is generated through licensees, he said.

It seems like a shame that consumers are in some cases “circumventing” real estate licensees by choosing not to use a licensed professional in real estate transactions, he also said.

Brown could not be reached for comment today.

The ads can be heard online by clicking links that are posted on the front page of the commission’s Web site, at http://krec.ky.gov/.

The ads focus on potential pitfalls with for-sale-by-owner home sales:

NARRATOR: It’s time to sell your home, your biggest investment. Question: Do you think selling itself will save you money? Here’s what others have to say:

WOMAN: I know of many people who have tried to sell their homes themselves. Of course, who wouldn’t want to try to save the money if you can save the money, but there are certain things that you just don’t risk and you just don’t take chances on. And the sale of your home, which is traditionally someone’s primary financial investment, is not one of those risks to take.

MAN: When I have sold homes myself in the past you get a lot of casual lookers. People will come out on a Sunday afternoon and look through houses just out of curiosity. They want to see how you’ve painted it, how you’ve wallpapered it. They just want to kill some time before they go to the movie. And I think if you have a real estate professional they’re going to weed those people out and you’re not going to get casual lookers. You’re going to get prospects who have been pre-qualified and who are seriously looking for a home.

NARRATOR: It’s time to get real, get a licensed real estate agent. A message from the Kentucky Real Estate Commission.

Another ad discusses the potential cost advantage of using a licensed real estate agent:

NARRATOR: Your home is your biggest investment, so is selling it yourself the way to save money?

MAN: Most consumers try to sell their home on their own mainly to save the real estate commission.

WOMAN: And although it sometimes seems like a lot of money to pay an agent, 1 or 2 or 3 percent could easily be lost in poor negotiations.

MAN: If you look at the negotiation experience that a real estate agent has, they can save them thousands of dollars in the end.

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