Is it time for more stringent regulation in the real estate industry?

By
Real Estate Agent with Prudential Allstar Realtors 16784

This subject might not appeal to many real estate practitioners because none of us like regulations.  However, with the barrage of misleading information out there, I wonder if our lawmakers are paying attention.  After all, it was only in the recent past that we almost experience financial collapse.  Were there co-conspirators from the real estate industry?  Will we be on the radar screen in the foreseeable future?

As a consequence of the aforementioned crisis, the current administration is taking measures to reform the way business is done in the financial industry.  Yes, they are re-writing the rules of the game.  Considering the fact that we are intricately related to the financial industry, why would they not look at us?  One only has to take a look at the latest foreclosure statistics to see that there are some serious problems that need to be addressed. 

Besides that however, there are some very reputable Realtors who are addressing problems that exist in the real estate industry.  Below, I have cited two very prolific bloggers, Lenn Harley of Rockville, Maryland and Ruthmarie Hicks from White Plains, New York. I have provided an excerpt from their blogs.

Lenn Harley, Real Estate Broker, Rockville, MD in her blog entitled, "LOOKING AT REAL ESTATE TEAMS AND TEAM SPECIALISTS," addressed the following questions: DO REAL ESTATE "TEAMS" EXHIBIT EXPERTISE.  The concept of "teams" in real estate practices is popular and often compared to medical "groups".  I see little to no resemblance and, in fact, assigning a title of specialty such as "Buyers Agent" to a member of a team is often misleading to the consumer."

Ruthmarie Hicks, Associate Broker, White Plains, NY in her blog entitled "This Brokerage Has 750 Listings.....So they must be the best! (Part 1)"

Here are some of the issues she brought up, "Does size really matter?  Does the number of listings or the size of the brokerage have anything to do with the ability of the agent to market and sell a home successfully? Is it the brokerage or the agent that is the determining factor? What Does the Brokerage Bring to the Table?"

What is your opinion?

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 11/01/2009 05:27 AM
  2. Sybil Campbell 11/01/2009 10:49 PM
  3. Don Rogers 11/02/2009 05:44 AM
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Rainmaker
445,976
Vickie McCartney
Maverick Realty - Owensboro, KY
Broker, Real Estate Agent Owensboro KY

Hi Lloyd~  We just need the rules we have to be enforced!  New regulations would not really be needed.  

November 01, 2009 02:18 PM #32
Rainmaker
507,095
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

GOod post today, makes sense.

 

Patricia/Seacoast NH

November 01, 2009 02:43 PM #33
Rainmaker
570,044
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Lloyd,  Certainly there were enough bad agents who found ways to scam people during the last 3-4 years that the Feds might want to take a close look at us.  The bad guys are better at scamming us than we are at protecting ourselves from them ! 

November 01, 2009 03:29 PM #34
Rainmaker
494,150
C. Lloyd McKenzie
Prudential Allstar Realtors - Albuquerque, NM
MBA - Prudential Allstar Realtors -

Wow!  I am not sure how to approach this.  I was not expecting this level of response to my post. Let me thank each and everyone of you for your comments.  Let me also say that I am indebted to Lenn Harley and Ruthmarie Hicks whose blogs I cited to make this one possible.

Regards,

C. Lloyd McKenzie

www.LloydMcKenzie.com   

November 01, 2009 03:56 PM #35
Rainmaker
186,495
Joyce Thomas
REMAX Home Expert Realty - Florence, AZ
Anthem Merrill Ranch AZ Real Estate

Good post and information.

November 01, 2009 04:51 PM #36
Rainmaker
977,394
Michael J. Perry
RE/MAX Associates of Lancaster, PA. - Lancaster, PA
Lancaster Relo Specialist

AS a 1099ed individual I would hate to see big government throw any more wrenches into our real estate life !!!

November 01, 2009 04:52 PM #37
Rainmaker
194,685
Emily Lowe
The Lipman Group Sotheby's International Realty - Nashville, TN
Nashville TN Realtor

Being relatively new to this industry (just under 3 years), I am still amazed at how much of it seems to already be regulated!  I also wonder how there was so much fraudulent lending as to cause the downfall of the housing market BECAUSE it seems like Big Brother was already watching.  Needless to say, with the current troubled housing market, I think there will be further regulating to come.  Which is also the reason that I will most likely never want to have my own brokerage.  I own another small business which has NEVER had the kind of hands on regulating that the RE industry has.  And I am very grateful about that!

November 01, 2009 06:26 PM #38
Rainmaker
149,705
Michael J. Gallo
Florida Luxury Realty - New Port Richey, FL
Florida Luxury Realty - Gulf Home Sales Team

The People voted for change and the People received a BIG Government in return.  There's some change for you.  The writing is on the wall for reform.   We will all be waiting with bated breath to see what reform will come.   I am hoping the reform and regulation will remain with the individual states.

November 01, 2009 07:28 PM #39
Ambassador
883,319
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

How about this...  Do away with licensing.  And then get the NAR or other trade organization to grade the members...  You don't need a license to work on a car, but screw up a brake job and people can die.  The trade group (NASE) requires tremendous amounts of testing and CE.  You can't get a Brake Cert. until you have shown that you deserve it...  Or Tune-Up... or anything else. 

If you think a broker has a lot of liability, look at a service center.  But they seem to do it without onerous regulations...

 

Just sayin.

November 01, 2009 07:59 PM #40
Rainmaker
334,559
Agent Aaron Vaughn, REALTOR® Listing Specialist
Capitol Home Team | Austin TX - Buda, TX
The $500 Million Marketing Advantage

 

Good and well told information. Thanks! I appreciate it very much. Great stuff.

 

November 01, 2009 10:26 PM #41
Rainmaker
1,253,565
Carla Muss-Jacobs, Principal Broker/Owner
BuyersAgentPortland.com | (503) 810-7192 Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% o... - Portland, OR
Buyer Focused ~ Buyer Results

Good and well told information.  Thanks!  I aprpecaite it very much.  Great stuff.

That's what Aaron Vaughn says on all his commenets.  He's SO BORING!!

Real estate is local, and local it needs to stay.  That said, whatever changes and overalls that are given, I really think it would be better served to be enacted by NAR, and not Uncle Sam. 

November 01, 2009 11:04 PM #42
Ambassador
1,550,626
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

I expect there will be more regulation coming.  Big government can't seem to help but create more regulations and more bureaucracy.

November 01, 2009 11:21 PM #43
Rainmaker
134,415
Paul Francis
Prudential Americana Group - REALTORS - Las Vegas, NV
Las Vegas Real Estate - Summerlin Homes - 702.592.

The Writing is On the Wall...

Barney wants the Federal Government in the Housing Business

"But Frank tells Weisberg that he isn’t planning to leave Congress in the near-term. “I want at least two years with President Obama and a solidly Democratic Senate so that we can get the federal government back in the housing business,” he says."

 

November 02, 2009 01:52 AM #44
Rainmaker
630,067
Don Rogers
Keller Williams Realty Chesterfield - O'Fallon, MO
Realtor, Broker, CDPE, GRI, OnullFallon MO & St Charles County MO homes

C. Lloyd,

Both writers that you have quoted bring up some good points as do you.  I have thought for some time now that we need to have better CE, ie. broker related topics for brokers or those that are thinking about becoming a broker.  But we do need to do a better job of policing ourselves if we want to have big brother stay out of our business..

November 02, 2009 05:40 AM #45
Ambassador
412,400
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Just keep raising the entry level, and increasing the fees would help this proble. Unfortunately large organizations like NAR don't see this as a good idea. Physician heal thyself.

November 02, 2009 08:56 AM #46
Rainer
34,264
Linda DeVlieg
Coldwell Banker Legacy - Albuquerque, NM
Albuquerque Real Estate

I might be missing something here, but I'm confused as to what the blogs about whether a team is a valid business structure or discussions about the size of a big real estate company has to do with regulation?

November 02, 2009 10:05 AM #47
Ambassador
1,930,728
Steve Hoffacker
Hoffacker Associates LLC - West Palm Beach, FL
New Home Sales Trainer/Coach, Sales Books Author

Lloyd,

In the first place, real estate is local. In the second place, real estate salespeople are licensed by their respective states. Therefore, the federal government has no role. :)

Steve

November 02, 2009 11:30 AM #48
Rainer
18,051
Dave Hymes
El Dorado County, CA - Coldwell Banker - Placerville, CA

LLoyd, I think a large part of the blame for the financial crisis was BECAUSE of government intervention and the last thing we need in any industry is more government intervention. It seems every time government gets involved in trying to fix something they screw it up even more...HVCC would be a perfect example. That said, I think it would be a good idea if the industry did a better job of policing itself in regard to ethical and educational standards.

November 02, 2009 01:31 PM #49
Rainmaker
717,468
Larry Brewer
Benchmark Realty LLc - Nashville, TN
Nashville Real Estate

Any changes brought on by the government will probably make a sick market even worse. The problems we have are not caused by realtors, they are caused by lending money to people who can't make the payments. I don't know how regulating realtors can help that, except to find another opportunity tax for the Obama team.

Wealth redistribution as he says. Don't we all feel wealthy?

November 02, 2009 04:23 PM #50
Rainmaker
494,150
C. Lloyd McKenzie
Prudential Allstar Realtors - Albuquerque, NM
MBA - Prudential Allstar Realtors -

The overwhelming majority of respondents to this post are opposed to more government intervention.  I agree with that point of view also.  But let's face it, there are problems in the real estate industry. This blog merely suggests the possibility of government intervention. It is a subject that all of us should be talking about.  To take it one step further, we should be brainstorming ideas of how we are going to address problems that exist in our industry.  If we do not, the government might just step in and fix them.  Far fetched? Look at the financial industry.   

Here is Chris Olsen's idea, "total transparency to remove the hype, spin, exaggerations, puffery, false claims, misleading self-promotion and the like so consumers can truly determine what it takes to be competently represented."

Sorry Linda, it wasn't meant to confuse anyone.  Actually, "discussions about the size of a big real estate company has to do with regulation?" was not the subject of the blog. The two excerpts were merely used to support the premise.  There is a lot of chatter, that might have already caught the attention of lawmakers.


 

November 03, 2009 09:47 PM #51
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Rainmaker
494,150

C. Lloyd McKenzie

MBA - Prudential Allstar Realtors -
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