Consumer Alert – Los Angeles consumers

Consumer Alert – Los Angeles Realtors are delaying distribution of sellers’ listing data to online real estate sites.

A Realtor controlled MLS in the Los Angeles area is intentionally delaying data feeds of property listing data to the top buyer frequented websites in the United States. Based on the information that we have reviewed, real estate agents and brokers, through their Realtor Association and MLS have acted in concert to thwart the successful business models of, and by tainting the data they send to them with an intentional 48 hour delay. This practice is harmful to consumers and competition.

InmanNews released a story on this in which we were quoted (click here to read that story).

We have a really hard time with this policy for a number of reasons. First, we really like the business models of (which takes For Sale By Owner listings) and to a lesser degree and (which do not) because they are consumer friendly and help sell homes. The crazy thing is that each of these online businesses actually help Realtors do their job better (many Realtors love these free online services) and they do it for free. Realtors are not out any money if Zillow finds a buyer because the Realtor still gets paid the listing portion of the commission.

So why would some Realtors not like them?   Get ready for this – because many Realtors and brokers want to collect a double fee even if it harms their own clients.  It is not good enough that Zillow gets the house sold, some Realtors and brokers (mostly the mega brokers who control the local Realtor Associations) believe that they are entitled to interfere with their clients’ interests in selling their home in order to improve the chances of collecting both the listing commission and the commission offered to the buyer’s broker (a double fee).

Realtors are conservators of their clients’ data and must serve their clients’ best interest above all others (especially their own). Realtors have exclusive access to client data only because of a state licensing privilege. We believe that violating those client and state duties to collect a double fee may constitute a fraud on both the consumer and the state licensing board. To do so in concert with the entire Realtor Association may be a form of price fixing and anti-competitive activity that would hopefully interest the U.S. Department of Justice, Antitrust Division.

When a Realtor undertakes to sell a client’s home, they pledge to sell that home for the highest price and in the shortest time possible. They do not pledge to manipulate the marketing of their client’s home  in order to pocket a double fee. When the broker collects both fees they also strip both the buyer and seller of their right to the broker’s representation in negotiations (click here to learn more about problems with dual agency).

Unfortunately, brokerage firms and Realtor Associations around the country have engaged in complex manipulations to fix or increase the chances of collecting double fees for years. The Los Angeles Realtors have taken this to a new level by involving the entire Realtor Association to act in concert to undermine online real estate sites. This does not just hurt Zillow, Trulia and, it harms the quality of the data that consumers rely upon to buy homes. Somehow we do not believe that the California Department of Consumer Affairs, Bureau of Real Estate intended brokers to use their state privileges to intentionally taint property data.

For years, Realtors and MLSs all over the country have engaged in another similar anti-consumer and possibly illegal practice of conditioning access to listing data to anti-consumer requirements. For example, most MLSs will only allow access to “their” data (its the sellers’ data) if the online sites agree to steer buyers back to the listing broker of the property. What consumers are not told is that practice improves the chances of a double fee for brokers and the forfeiture of broker representation for both the buyer and seller. That means do it yourself home buyers who click on the listing broker do not save money, but instead forfeit their right to representation without so much as a “disclosure.”  We believe this practice is also a misappropriation of state licensing authority.

Realtors have the opportunity to list in real time their clients’ listings for free on a multitude of websites with very little effort. These sites often have far more technologically advanced software than Realtor Associations and provide a real service to Realtors and sellers. We recommend that all consumers demand that their brokers immediately list their properties (that means no delay) on Zillow, Trulia, and the other major online free real estate portals so that they get great national and local exposure of their properties. 

Here is a video from the Today Show ON HOW NOT TO MARKET YOUR PROPERTY.

Advice for real estate consumers who are victims of this practice:

1. Contact us and tell us your story (especially if you would like to be a plaintiff in a class action lawsuit)

2. File a licensing complaint with California Department of Consumer Affairs (click here to access their webpage)

3. Add language to your listing contract requiring to list your property on Zillow and the other online sites immediately and to provide you with proof that was done.

4. Use this as a negotiating point to negotiate a lower commission.


Minnesota Consumer Alert – Edina Realty

Consumer Alert – We found the following problems with Edina Realty’s listing practices contained in a 2011 listing contract provided to us (we appreciate a newer copy if you would like to send us one). This list is not meant to be comprehensive.

1.  Anti-consumer Marketing Practices. Edina Realty excluded most of their clients’ listings from, Trulia and (the top buyer frequented websites in the country) for three years. We believe they may still be doing this on many of their properties. This practice increases the chance that Edina Realty will collect a double fee while likely sacrificing their clients’ interests in selling their homes for the highest price and in the shortest time possible. Click here to watch a short video from the Today Show on How Not To Market Your Home Online.

Edina Realty includes the following boilerplate language in the listing contract we have:

2. Pocket Listings. This is the practice of intentionally withholding listings from all marketing websites, including the MLS. Agents may advise their sellers that it is a good idea to test market the property just within Edina Realty for a few weeks in order to gain information about the price and how well it shows. They may provide other reasons. However, it is rarely a good idea to intentionally limit the market exposure of a property – especially the most valuable asset a client is likely to own. We believe Edina Realty routinely engages in the practice of pocket listings and we highly recommend that you avoid this practice. Here is a short article about pocket listings: Pocket Listings.

3. Closing Services Notice is incomplete and self-serving (in our opinion). Title companies investigate and examine title and make extremely important closing decisions. They provide consumers with an incredibly important safeguard service. Edina Realty wants you to use their title company and persuades many people to pick their title company by causing them inconvenience if they do not. Instead of providing their clients with a list of impartial title firms and their fees, Edina Realty provides their clients with a choice that puts the onus on the client to go figure out how to compare title firms: pick Edina Title or go find your own title companies the only two choices. Does Edina Title rubber stamp deals so that Edina Realty can collect their commission? Is Edina Title looking the other way and saddling their clients with title defects? Are they capturing their clients and charging them more than other title companies? We do not know, but the conflict exists and we suggest that you do an internet search to compare Minnesota title companies and find one that is independent of affiliations. 

4.  Edina Realty Home Warranties are being sold to clients in the listing contract. Home warranty products are often cited as generating more consumer complaints than any other service product on Angies List and other respected resources. Yet Edina Realty pushes them in its listing contract because they collect a portion of the fee. Here are links to two stories in Angies List about home warranties: Why Home Warranties are No Guarantee and Home Warranties.

5.  Edina Realty claims a copyright on their clients’ listing data. By taking a copyright on your data this gives Edina Realty the right to sue third party websites that include your listing information on their websites. We believe this is wrong and that Edina Realty should be doing everything they can to make sure your listing data is widely marketed regardless if they are to get a double commission. Here is an older clause that we saw in their contract. 

6.  A mandatory Arbitration Clause designed to eliminate class action lawsuits and binds clients to arbitration even in claims of fraud. Extremely harmful to consumers:

7. Junk Fees.  Many real estate brokerages started charging junk fees on top of their enormous real estate commissions (we recommend to not agree to pay these). In comparison these fees don’t seem like much. But an extra $400 or more is a lot of money and Edina Realty charges both their buyer and seller clients approximately this much.