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Unbelievable Offers? Don't be fooled!
Scroll down to see latest cons & tricks!
FSBOLawrence: Working hard to preserve your American Rights to buy and sell
real estate privately.
Dale Pearson (l), Publisher of FSBOLawrence.com and President of the international FSBO Network, met with James C. Cooper, PhD, JD, Deputy Director, Federal Trade Commission, Office of Policy Planning, Washington, DC recently to discuss competition advocacy theory and history in the real estate industry. Discussions included fair competition, consumer protection, price fixing, boycotting and other releated anti-trust issues facing the industry and how they affect your right to buy and sell real estate.
Biased Laws
In 2006, Kansas and Missouri passed a law requiring brokers to provide certain minimum services to consumers. The law defined their business in a way that would keep discount competitors out of their lucrative market. So to qualify as a broker in Kansas, you're now required to present sellers with all offers and counteroffers as well as help with price negotiations -- services that discount brokers often didn't provide.
It was like requiring Burger King to have waiters. Pay for waiters -- or real estate agents -- if you want the service, but why mandate it? This logic didn't matter since the mainstream brokers had friends in high places. Many state legislators are also real estate brokers...or they contribute big bucks to their political campaigns. Matter of fact, the Kansas Real Estate Commission, which is a public commission set up to "protect" the public, is run by a five member board. Four of the five members are licensed brokers! Are they protecting us, or their commissions and industry? You can guess what happened next: The bill sailed through the legislature and was signed into law.
At least six other states have passed similar laws -- Alabama, Illinois, Indiana, Iowa, Utah and Texas. In some cases, legislators ignored warnings from the Justice Department's antitrust division that the laws could hurt consumers...including Missouri's governor.
According to the NAR's Steve Cook, "The intent is to make it easier for consumers" -- for instance, by ensuring that people don't wind up getting burned trying to tackle a complex transaction without professional help. Realtors provide a human touch that "a computer just can't provide," Cook says.
The risks may be more illusory than real, however. "We've yet to see any evidence that consumers have been harmed" by using discount brokers, says James Cooper (as shown above), an attorney for the Federal Trade Commission. The only sure thing is that the agents are doing a pretty good job of protecting commissions that totaled $61 billion in 2005 alone.
Price Fixing & Boycotting:
Across the country, and even here in the Kansas City metro area, there are reports of agents trying to steer potential buyers away from low or no commission competitors in an attempt to keep real estate commissions high. This is not legal.
Price fixing - Trying to keep commission rates high by boycotting or steering customers away from, companies that offer less than high commission rates.
Nothing is more important to real estate cartels than controlling the Multiple Listing Services (MLS), the databases of homes for sale. Real estate websites often allow home-buyers to peruse local MLS listings on the Internet. Yet they sometimes censor or omit listings sponsored by a discount broker. And many established real estate agents won't allow their own listings to appear on a discount broker's site. That spiteful move led the U.S. Justice Department to sue the National Association of Realtors (NAR), the industry's ultra-powerful lobbying group, for allowing members to discriminate against Web-based brokers. (The Justice complaint is expected to take years to resolve.)
The 1890 Sherman Act prohibits any agreement among competitors.
If an agent ever tells you not list your property with a broker who offers discounted commissions, they are breaking the law. If an agent ever tells you that no agent will show your property because you are currently listed with a discount broker, they have broken the law. Violation is a felony. Restitution to victims: civil recovery up to 3 times damages, $10M corporations and $350K and/or imprisonment for individuals.
Please report this illegal activity immediately to the
Department of Justice
Antitrust Division - New Case Unit
601 D Street NW, Ste 10107
Washington, DC 20530
email: newcase.atr@usdoj.gov
PH: 1-888-647-3256 or 1-202-307-2040
This type of price fixing is taken very, very seriously.
$5,000 R E W A R D
Offered by Pearson's For Sale By Owner Services, for the arrest and conviction of any licensed real estate agent refered to us for price fixing. If an agent leaves a message on your cell phone or home answering voice mail, save the message! Bring the message to us and we'll get it to the FBI and/or Justice Dept and we will press for immediate prosecution. Price fixing is to be taken very, very seriously. Price fixing can be as simple as them saying that "nobody uses agent "A" because they are a discount broker" or "you are currently using agent "A" but no agent will show your house because they are a discount agency". This is in an attempt to try and keep real estate commissions high. Any of these, or similar statements are blatantly illegal and must be reported.
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Special Notice to all real estate agents:
Thank you for being one of over 100,000 visitors to our site this week! Yes, you too can sell privately using our services, over the last 10 years, we've help hundreds of local agents sell their own property (they do not like paying commission either) and we can help you too. Also, please be advised that every year we help thousands area families sell without paying commission. So please respect their American right to sell FSBO and do not hassle them to list with you.
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Justice Dept sues National Association of Realtors
On Thursday, Sept 8th, 2005, the Justice Department filed an antitrust (price fixing) lawsuit against the National Association of Realtors over the group's new Internet listing policy, saying it restricts competition from web-based brokers. We'll keep you posted on the outcome of this landmark case.
Sept 8th Lawsuit Update: Immediately upon the Justice Department's filing, the NAR backed down and revised their policies pursuant to the Justice Department requirements. Now, brokers have until the summer of 2006 to include all MLS listings on their web sites - not just cherry-picking the high commission listings.
Do-Not-Call Update: On Feb 18th 2005 the FCC issued an order that clarified that calls to FSBOs by real estate agents to get your listing, is illegal. Despite their prolonged and expensive efforts to be exempted, the FCC has ruled that agents can not call you to solicit your listing if you are on the list. It is illegal for real estate agents to call FSBO sellers to solicit their listing. If an agent calls you, trying to convince you to list with them and you are on the national Do-Not-Call list, they broke the law. They are subject to an $11,000 fine. Get the agent's name, phone number and office and report them online www.donotcall.gov or via phone 1-888-382-1222. You can also use these contacts to put your telephone number(s) on the national Do Not Call list.
Millions of so-called "FSBO" web sites, real estate agents, mortgage companies and others use every trick in the book to capture your FSBO business - and then leave you feeling foolish. Here are some common tricks to watch out for:
Bait-and switch:
Due to our FSBO customers success over the past 10 years, and the power of For Sale By Owner, many mortgage and real estate companies have started FSBO-like sounding names of their businesses. In fact, most are real estate brokers who charge commissions and high up-front fees. Many are also start-up mortgage companies trying to fool you into using your FSBO home as bait so they can sell mortgages. A lot of these sham companies also sell your name to agents as "leads" so you'll be hassled by agents to list with them.
Unfortunately, there are many businesses in the Kansas City metro area claiming to be For Sale By Owner. Most are real estate agents or mortgage companies in disguise trying to get your listing or mortgage companies trying to sell your prospective buyer a mortgage. Many "discount" brokers try to trick you into listing with them by offering MLS for low fees.
None of these businesses has your FSBO interest at heart. They all want to sell you something else. Most low MLS fee "discount” brokers use your home as "bait" to attract buyers, so their agents can intercept your buyers and convince them to sign with them as their buyer's agent.
Our sole mission is to help you buy or sell real estate without paying a commission ...no hidden objective.
Real Estate Agent Scams
They tell FSBO sellers: “the seller always pay the commission!” – WRONG! When selling FSBO you absolutely do not pay any commission. New real estate laws make it very clear: a buyer’s agent works for the buyer, is hired by the buyer and pays the agent…the seller is under no obligation to pay any commission…don’t be fooled into paying a buyer’s agent commission!
Be FSBO and on the MLS: There is no shortage of discount real estate brokers who would be more than happy to list your FSBO property on the MLS for a fast buck. But be careful! Like everything, there are advantages and disadvantages to the MLS:
click here for Disadvantages of the MLS ...
what agents won't tell you!
When you, or anyone, goes on the MLS you must agree in advance, to pay 2 commissions! One to a buyer’s agent – generally 2.5% to 3.5% of your sales price. Another to a broker to put you on the MLS. These listing brokers will put their phone number on the MLS in an effort to attract buyers and then sell them a different house or a mortgage. These discount brokers don't make their money by charging a low $95 to slap you on the MLS - they have hidden agendas.
You are required to pay for all advertising; they will not advertise your property. Most have additional fees if you want them to prepare the paperwork for you. Also, keep in mind that if a buyer’s agent makes an offer, they are rarely at full price, most are very low offers. A buyer’s agent is working for the buyer and trying to get them the lowest possible price. Plus, a buyer’s agent will want you to purchase a warranty for their buyer and after the buyer’s inspections, you can expect the buyer’s agent to ask you to pay hundreds or even thousands of dollars for repairs! Finally, these discount MLS listings are not available for buyers to see on most major internet sites, so do not assume you are getting any “extra” exposure.
Our FSBO customers sell twice as fast as properties listed on the MLS because home buyers today will always shop private home sales first because they know that every home listed with an agent has an inflated price to cover their high commissions.
Mortgage Company Scams
Today, it seems like there is a mortgage company on every street corner. Competition is fierce for mortgage loans. They know if somebody is looking to buy a home, they'll probably need a mortgage. So in an effort to get buyers, they have started several scams directed at FSBO sellers.
Banks & Mortgage Cos pretending to help FSBOs : New banks, trying to sell mortgages, often pretend to help FSBO sellers with "free" seminars, or signs, or flyers. Be very leery of these offers. These struggling new banks have one and only one objective, that is to sell mortgages - not your house! Rest assured, the "free" signs or flyers will be loaded with advertising for their loans, their loan officers, their bank, etc to sell their services - not your house! The last thing you want when you sell FSBO is to interject another middleman between you and a buyer! Stay clear of these loan predators.
Yard Sign Scam: Many struggling mortgage companies have started scams to place a sign in your yard, next to your FSBO yard sign. Their objective is to use your home as bait, to attract buyers, so they can sell them a mortgage (and in most cases not a mortgage for your house). They are simply interjecting a middleman in-between you and your buyer exactly what you do not want! We strongly suggest that you NOT allow any mortgage sign in your yard.
Internet Advertising Scam: In this scam, these mortgage companies offer "free" advertising of your house on their web site, if you allow them to place their mortgage sign in your yard. Don't sit by the phone waiting for their buyers to call off their web site. Most of their sites are worthless because buyers do not know they are there! Remember, they did not make the site to attract buyers, or to help you sell, they made it to attract sellers to let them put their sign in your yard! Their objective is to sell mortgages, not your house. FREE is worth exactly what you pay for it.
Pre-Qualified Buyer Scam: These mortgage companies promise to "unleash" hundreds of their so-called pre-approved and pre-qualified buyers to your house to buy it. The fact is, they don't send buyers and more importantly, our FSBO customers have no problem with their buyers not getting financed. They will try to scare you into believing that all your buyers are deadbeats and you need them to pre-qualify them - wrong! By far, most, if not all, of your buyers will be able to purchase your house without their "assistance". In reality, they'd like to see your home stay for sale forever so they can get unlimited buyer leads! Their objective is to sell mortgages, not your house.
Unbelievably low FSBO internet prices:
There are millions of FSBO web sites on the internet, most are like billboards in the desert, that is, nobody knows they are out there, especially home buyers! Most of these offer FREE, $10 or $50 or $100 FSBO "listings" - unfortunately, nobody will respond to your "listing" because nobody is looking at it. Don't sit by the phone waiting for their buyers to call off these web sites, you get what you pay for. Some of the national web sites claim high buyer traffic and listings, but on average, 75% or more of the homes they are showing have expired months or even years ago. They leave the expired listings viewable to make it look like they have a lot of "active" homes for sale. In reality, the number of active listings is very, very small. Our web sites are kept current, active and accurate everyday. Our web sites have thousands of local, ready, pre-qualified buyers looking to buy, everyday, in the Kansas City area.
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