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.

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.

The Pennsylvania Association of REALTORS®  has released "THE PAR ECONOMIC REVIEW For the First Quarter 2005" . Author of the study is Dr. Jacob De Rooy, who teaches economics and finance and Pennsylvania State University at Harrisburg. Says De Rooy:

"The economy will continue to have healthy growth, with only moderate inflation. Home construction will decline and competition within the real estate sector may intensify. Mortgage rates will trend upward. But a financing program that uses adjustable rates for a few years and a fixed rate thereafter may be attractive. A housing price bubble is unlikely."

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.

While The U.S. Department of Housing and Urban Development engages groups nationwide in events marking Fair Housing Month, the White House is working to purge numerous economic development projects, derail a rural housing program, and move significant anti-poverty initiatives into the Labor and Commerce Departments. Housing Budget Facts:

"Cuts on domestic spending come at a time when city budgets are severely challenged and cities have major community and economic development needs. The U.S. Conference of Mayors issued a statement that they are strongly concerned the consolidation is being used as a way to cut needed resources.

" Cities have become dependent on HUD’s development programs, especially the Community Development Block Grant, and use these grants for clinics, recreation centers, day-care facilities, literacy programs, job creation, stimulation for private investment, and revitalization of distressed communities. With housing and property values skyrocketing, the need for such programs for low-income families has never been greater.

" The budget would eliminate $260 million in economic development projects earmarked for this year by lawmakers and HUD could ultimately lose a quarter of its $31 billion budget. Some 817 HUD community planning and development employees, along with those employed because of financial resources HUD provides to stimulate business, could be in jeopardy of losing their jobs.

" The administration proposes to consolidate 18 community development programs from various agencies into a new $3.7 billion economic development program for distressed communities to be overseen by the Commerce Department4, generally see to be more receptive to business needs than the needs of the poor.

" Don Plusquellic, the mayor of Akron, Ohio, who is president of the United States Conference of Mayors, said: ‘The new proposal in unconscionable. It will cut programs that help the poorest and the neediest’."

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."

  EXCLUSIVE REPORT: TheCELESTIALgram Blogger reports that the Beneficent  Recorder of Deeds has added Karol Wojtyla as tenant in common to the First Estate at the Kingdom of Canaan. Welcome Wagon chair Erena Josefa Stanislawa Maliszewska Flynn was the first to greet the Pontiff. Erena and Wojtyla joined the archangelic residents for a robust seraphic polka to herald Wojtyla’s homecoming today.