After yesterday’s comments, a rebuttal is almost redundant. This all might be a proverbial tempest in a teapot, as most people with any familiarity with the real estate business learn early on the difference between a real estate broker, an agent (who is an independent contractor at a real estate office) and a mortgage broker. Using the generic term “broker” in the article to arbitrarily refer to either or both real estate or mortgage broker is, one hopes, a simple mistake. Readers of real estate blogs – buyers, sellers, consumers among them – already know the how wrong the claims made in the article are (as do the commenters on your blog).
The word “disappointing” keeps coming up in comments referencing the Wharton article.
failing to meet expectations
The clear lack of knowledge and awareness about the real estate profession indicts the entire article.
Misdirected blame and clearly wrong arguments from prestigious institutions and leaders such as Wharton do great disservice to all involved – the Realtors, the buyers and sellers, the lenders and I would argue themselves and their students as well as policy makers who may trust such business education leaders’ opinions – and then we all may suffer.
Thanks to Greg for sending the traffic and to everyone who commented here on yesterday’s post about the article posted at Wharton’s blog, The Subprime Blame Game: Where Were the Realtors?
Seeking to level blame on some Realtors is one thing – there are unscrupulous individuals in every profession.Â Why not participate in an honest debate rather than sling blame? If you want to debate competition in real estate – look beyond the Realtors. Thinking that the entire real estate industry shuns Buyer Agency (“The (Realtor), 99% of the time, is the agent of the seller”) is appalling. There is plenty of culpability to go around, but to argue that all 99% of Realtors were advocating on behalf of the Sellers is liable to give some apoplectic fits.
Greed is the primary culprit – greed that affecting the decision making ability of people in every camp – buyers, sellers, Realtors, lenders, appraisers, inspectors, title insurance companies … no one industry was solely responsible for where we are now. The market is reacting. Laying blame is a waste of time. Examining lessons we can learn and moving forward is productive.
Blanket tatements need foundation – back them up.
Further, this is the applicable code from the Commonwealth of Virginia regarding real estate licensees engaged by buyers, for what it’s worth. Read what follows “2. Promote the interests of the buyer by” and then this -Â a sample Exclusive Right to Represent Buyer’s Agreement can be found here.
The author and professors make one accurate argument accidentally – until the real estate industry, mortgage industry, HUD, etc. embrace divorced commissions, we have a long way to go. Divorced commissions means simply thatÂ the buyer pays the buyer’s agent and the seller pays the seller’s agent. Until this is fixed, the perception will exist amongst those who don’t know any better – whether by unfamiliarity or neglect (as would seem to be the case in the Wharton professors’ cases) – that true representation does not exist.
I come not to condemn the professors (I have read the Mortgage Professor site for years), but to enlighten them to the wonderful world known as the 21st century and Buyer Brokerage. While the seller may pay my commission now, the loyalty and trust I am earning is the buyers’.
Here’s a proposal – First, apologize and clarify. Second, invite a guest speaker write a guest post on your blog and to explain to your classes what real estate agency and buyer/seller representation are. Explain how much the profession has changed in the past twenty years.
Regarding the use of the word “shame” in the original post – I stand by it.
3 a: something that brings censure or reproach; also : something to be regretted : pity <it’s a shame you can’t go> b: a cause of feeling shame