Anthony Lamacchia: Word is things are heating up even more in the courtroom in Missouri in the Sitzer Burnett case and I’m sitting here reading a great article from RIS media. I’m looking at some of the things that have transpired and some of the things that were said over the last few days and it’s quite interesting to me folks. Couple things that caught my eye specifically Mr Ketchman the plaintiff’s attorney decided to bring in a so-called expert a Texas A&M Professor who’s an economist. In one of the statements that he made in in the courtroom before our NAR attorney got to come out “It tells me something fishy is going on” said Schulman “this is one of the clearest cases of price fixing and collusion I’ve ever seen at the core is the mandatory compensation rule in the threat of steering that keeps it going.” I mean I don’t know how they come up with this the only thing I can assume in surmise is this Mr Schulman is a professor in Texas he’s not in the business he he doesn’t know how the business goes. He doesn’t understand how unbelievably competitive this business is he doesn’t realize that in a given Town realtor commission rates are all over the place and there’s always people that are trying to undercut everyone and charge less charge more Etc. so I want to point out that comment from him.
Then I want to point out somewhat of a rebuttal that Ethan Glass had from NAR let’s focus on the facts you have not seen now he’s saying this to the gentleman Mr Schulman from Texas A&M who I assume was on the stand “let’s focus on the facts you have not seen a single document with the defendants discussing commissions with each other, you have not seen testimony showing the defendants discussing commissions, you have not seen any document showing any defendant discussing with other defendants a particular amount that a seller was going to pay a buyer’s agent.” You know what this sounds like this sounds like these people Mr Ketchman especially this guy there’s no doubt in my mind he came out of the womb wanting to take down the real estate industry I don’t know why someone knows why I don’t but this guy seems obsessed and he seems to have a massive lack of understanding of our business. These people are acting as if us Realtors go to our state Association events our local Association events our national events and we all get in a room we all get together and we go, “hey let’s charge X you charge y I’ll charge Z let’s charge this you hold your ground I’ll hold your ground” Folks there is no such cooperation going on among Realtors and among brokerages company to company I’ve never heard of such a thing. One of the mentions I heard this week that Ketchman pointed out was apparently Gino Blefari somewhere along the line talked about how he recommended to his Realtors which by the way he’s allowed to do that hey go into your listing appointments with a pre-filled out commission amount and and Ketchman is acting like that’s some sort of crime and I’m saying to myself, “why”
When we go into restaurants I just pulled up on my screens here the Capital Grill in Del Frisco and I’m looking at menus at restaurants they all have pricing so what are we saying here that because of the Sherman Act restaurants can’t have pricing anymore because then someone that owns one restaurant or manages one could go into the other let’s see their pricing let’s match them let’s beat it what you’re telling me pricing and putting pricing out is a bad thing. Think about that you go into a hardware store nuts are 10 cents bolts are 15 cents now we’re going to take pricing off the shelves.
There’s nothing wrong with a broker talking to realtors in their own company about what to charge or suggested amounts to charge and as I mentioned in my first video us Brokers wish us that the Realtors in our companies followed exactly what we say they don’t it’s just not how it works. They might follow some of it and we as Brokers are allowed to say it but it’s not as simplistic as they’re acting but even if it was that’s not bad. Setting pricing within an organization training folks on how to do business and get the pricing they want within the same organization is not necessarily a bad thing okay and the Realtors still have the freedom to compete with one another within the organization I see it here at my company Lamacchia Realty every day we have realtors that charge more charge less they know about someone else they want to beat them they want to get the listing it’s natural progression that happens.
Now let’s talk about pricing on the flip side let’s think about car dealerships we all know that when we go to the dealership there’s an MSRP price there’s a sticker price and what do we all do we negotiate. Negotiations are very common with buying cars they’re also common when negotiating with any type of service business a landscaper coming to your house someone we have someone that cleans the fish tank at our house it’s normal to talk to service providers about pricing or trying to get their pricing down when you’re the consumer there’s nothing unfriendly or any collusion going on with the way that real estate is being done these people that are making this up for a money grab as I said in the first video are completely and totally wrong. Negotiations happen all the time every day. Let me keep going there’s also other I was surprised by the amount of hearsay that’s allowed into this case I want to point this out Ketchman Point uh let’s see he pointed out some comment that apparently a Michelle Figs a former analyst of KW wrote uh in her notes during a meeting of top Executives at KW years ago and she wrote Gary strongly believes in collusion theory for why consumers are stable and then it says something like defendants sought unsuccessfully to exclude that testimony as hear say due to the fact so they they were unsuccessful in getting that testimony out due to the fact that Figs admitted she was not sure Gary actually said that or if someone else did. We all can try to make things up to bring into a courtroom but folks this is serious stuff here if this case was to be successful okay I want to go over to the Wall Street Journal for a minute. Great article came out this week from Laura Custo and Nicole Friedman two Great Wall Street Journal reporters there was a comment in here from Katie Johnson okay she’s um Chief Legal Officer at NAR does a terrific job what is at stake here is the future of buyer representation Katie’s completely right. Folks 25 plus years ago there was all kinds of noise being made from all uh different kinds of consumer Advocates about how buyer agency was something that needed to be developed um buyers deserve to have someone that would treat them um right and watch out for them and to have a fiduciary duty to them this blows that up if this case is successful this Ketchman person if he is successful in his case in this local Federal courtroom in Missouri this could have implications on the whole business.
Buyer agency as a whole could be blowing up buyers will be running around with no representation and I heard the other day there’s another thing that I heard that’s not necessarily an article that he said we should be like Australia Real Estate fees are much cheaper on in Australia and um Buyer Agents are for the affluent now don’t quote me on those words specifically but that’s what I heard those are some of the phrases that I heard he used. What? How is that consumer friendly how is that friendly to to say that only those that can afford it can get it right now buyers can get representation that’s a wonderful thing. Why would we want to take that away so just want to recap this for you at the end of the week this week there was a lot of plaintive talk next week the defendants are in the room and some of these folks that run these companies like the folks that I mentioned are going to be in the room. That will make it a lot easier.
One other point I want to make and I say one but it might end up being two they talked about how they were unable to they looked into non-mls uh participant data and determined that they haven’t been able to get a foothold okay well properties are being listed on mls in syndicating out to many other websites not just Zillow and realtor.com many websites locally, nationally Etc. If someone is not getting those listings that exposure buyers are missing out on finding out about them which by the way buyers do miss out on properties with some of those websites like Zillow etc. when things don’t Syndicate correctly etc. so MLS is providing a platform that everyone’s getting a shot at the property that’s a great thing.
Now I want to point out here here’s my one more thing right and now it’s two in the Wall Street Journal article they went and found someone who hired Rex real estate remember I mentioned Rex real estate the other day the company that was wildly unsuccessful along with Purple Bricks and many of these other companies who get into the business right they get in and we’re going to discount we’re going to be everyone’s savior then they get in and they start realizing it’s quite expensive to sell a home there’s a lot of marketing that goes into it from a brokerage perspective. You got to pay the realtor the Realtors have their own expenses sometimes the realtor or the company handles the brochures the postcards the online marketing. I could go on and on food for broker open houses whatever it may be so this gentleman John Anderson and I’m not really knocking this guy like I am a bit to the others, but this is a consumer he hires Rex Real Estate probably thinking he’s going to save money and his home sells for less.
Well, I have news for you Mr. Anderson and for all of you in the courtroom especially Michael Ketchman top realtor who really know how to sell properties who know how to Market them correctly who know how to negotiate correctly so that they can get the most money for their clients, they don’t join discount brokerages like Rex real estate. They don’t! Look at Redfin everyone’s Redfin left NAR folks no one no top realtors with a large book of their own business remember each realtor’s in business of their own right they’re like small business owners that are under a larger brokerage umbrella top realtors are not going to Redfin to sell homes that’s not how it works because they know that those companies they’re not just discount brokerages but they’re limited service companies. They’re not doing their ample amount of marketing they’re not doing things at an extremely high level on behalf of sellers. So this article and what happened to this seller in most cases in most Industries folks you get what you pay for if you’re going to get surgery do you want to have the surgeon that’ll give you a discount and does the surgery three times a year. Or do you want to go with the surgeon that does it every day that charges more. Have a great weekend see you next week stay tuned into to crush it in real estate thank you.