Real Estate Blog

  The Department of Justice issued a letter Friday, April 8, 2005,  urging the Oklahoma state legislature to reject proposed legislation that would change current state law to eliminate the ability of Oklahoma real estate professionals to offer a selection of real estate services, sometimes called fee-for-service or menu pricing. The DOJ expressed concern that the proposed legislation would cause Oklahoma consumers to pay more for real estate services and would limit consumer choice by eliminating an entire class of real estate service provider:.

"In the past, real estate brokers have bundled their services into a single package and consumers have been charged a single price, usually a commission based on a percentage of the sales price of the property. To meet evolving needs of consumers and changing market forces, some real estate professionals offer consumers a menu of real estate services, and clients can choose to purchase only those services that meet their needs. The bill would likely harm competition in two ways. First, consumers who do not want or need all of the services traditionally provided in a package nevertheless would have to pay for all of them, which may cost them thousands more to buy or sell a home. Second, without competition from fee-for-service options, the prices for traditional, full-service packages are likely to increase.

“Competition in marketplaces across the country has demonstrated that many consumers save money by using only selected services from their real estate brokers. The proposed legislation would deprive Oklahoma citizens of the benefits of competition, such as lower prices and customized service levels, provided by fee-for-service brokers,” said R. Hewitt Pate, Assistant Attorney General for the DOJ’s Antitrust Division. The letter points to the lack of any evidence that providing a greater selection of real estate services has caused any consumer harm, much less harm that could justify such a broad prohibition on competition."

  Thanks to Behind The Mortgage for this little tidbit of investigative real estate reporting:  In Cincinnati  a couple is suing their home builder, NVR, Inc. (doing business as Ryan Homes), for

"allowing workers to habitually urinate within the home while it was under construction. Said habits were sufficiently pervasive to generate pools of urine within a linen closet never conceived to house a toilet,"

Though the fact that the "habitual urination" did occur is not disputed, the builder refuses to release the buyers from their purchase contract.

We are told that these hygiene lapses are quite common. Site foreman often share stories about various "gifts" they’ve found in bathtubs, sinks, and all manner of places in under-construction homes.

Bankruptcy bill proponents are putting their champagne on ice as they wait for this week’s vote by the U.S. House of Representatives. Passage seems imminent. After passage, credit card companies and other "Tony Soprano" genre lenders can turn to federal courts empowered to act as "enforcers" for unpaid debt.  Broken lives will follow.

Racial segregationists continue to exploit minorities in growing numbers, and minority home owners continue to be steered to  minority-dominated neighborhoods where real estate does not appreciate as quickly as in majority white neighborhoods, according to the National Fair Housing Alliance. Housing discrimination complaints to state, federal and nonprofit agencies rose 8.6 percent in the past year, climbing to 27,319 in 2004 from 25,148 in 2003, according to the group.

"Some commentators say integration has failed. I say integration has yet to happen," declared Shanna L. Smith, NFHA president and chief executive.

Lending figures due to be released later this week  will answer the group’s concern that there are discrepancies between loan rates offered to white and to minority home buyers.

Businesses that handle sensitive consumer credit information will be required to destroy that information before it is discarded to comply with the "Fair and Accurate Credit Transaction Act" (FACTA) that goes into effect in June, 2005. Those businesses include credit reporting agencies, real estate agencies, mortgage lenders, landlords, and government agencies. The Federal Trade Commission says that the Act covers all data, including paper, CDs, computer discs and hard drives. Companies must ascertain that no information can be retrieved from these media after they have been discarded.

The Department of Justice’s Antitrust Division  filed a lawsuit against the Kentucky Real Estate Commission for limiting competition among real estate brokers. DOJ said that the Commission’s regulations restrict competition and cause consumers to pay higher prices for certain real estate services:

...the Kentucky Real Estate Commission regulations prohibit real estate brokers from competing by, for example, offering cash rebates or refunds, or a free home inspection, the DOJ said in its court filing. Nor can they compete by taking a customer out to dinner or donating money to a charity of the customer’s choice. The Department’s suit seeks to restore this beneficial competition. As aptly put by another broker quoted in the complaint, striking down these regulations and permitting "rebates and inducements will increase competition and give consumers more choices in service."