More Realtor News
The National Association of Realtors has more than its fair share of adversaries, including the U.S. Department of Justice (which is suing the N.A.R. for anti-competitive practices) and the Consumer Federation of America (whose executive director recently told the N.Y. Times what he thinks of the N.A.R.: ”Because the industry functions as a cartel, it is able to overcharge consumers tens of billions of dollars a year. Consumers are increasingly wondering why they are often charged more to sell a home than to purchase a new car”).
But here’s the best indicator yet that the N.A.R. is in serious trouble: they’re wasting their time attacking us.
The N.A.R. continues to take issue with the part of Freakonomics arguing that the typical Realtor isn’t necessarily looking out for her client’s best interests. Here’s how the N.A.R. website sums it up:
The authors argue that real estate agents could get higher prices for home sellers by urging them to keep their houses on the market longer. But they don’t because agents would not make enough in additional commissions to justify the extra time on the market.
Then it continues:
Levitt and Dubner assume real estate businesses are built around one-time transactions. In fact, successful professionals build relationships with customers for life. Homeowners move once every seven years on average and are likely to use an agent they have used before.
Even if the N.A.R. is right — and even though it doesn’t acknowledge the actual basis of our argument (i.e., the empirical work done by Steve Levitt and Chad Syverson in this paper) — they’ve chosen an awfully shaky idea upon which to build an argument. If indeed “homeowners move once every seven years on average,” and accounting for the fact that many homeowners leave the area (they are, after all, selling their homes), it would seem that the typical homeowner might have the opportunity to re-hire the same Realtor about once every ten years. Is that really a reason for a Realtor to “build relationships with customers for life,” and to refrain from exploiting them? I can see using this argument for dentists, or for auto mechanics — they see you often enough to want to offer a certain level of transparency and accountability. But for Realtors?
This reasoning is almost as bad as the last fun fact floated by the N.A.R, which prompted one blogger to go so far as to compare the size of the Freakonomics brain and the N.A.R. brain. As you can see here, one of the brains is considerably larger than the other. That said, with a sample set of 2, it’s possible that our brains are, respectively, tiny and tinier.
But the really important news about Realtors is this: someone in New York has finally launched a website, brokerate.com, that allows consumers to rate Realtors in terms of knowledge, courtesy, and effectiveness. I have a feeling this kind of information will prove remarkably helpful to the average home-buyer or -seller.
My only question is this: When will someone do the same for NYC contractors? Half the people I know who have done renovations in N.Y. have a nightmare story about their contractors; as soon as some clever folks start up www.contractorate.com, that problem may soon be on the way out too.