Washington, D.C. – Today, the Consumer Federation of America (CFA) released a report – The Availability of Consumer Information From State Real Estate Commissions – showing that only 11 state real estate regulatory agencies provide adequate consumer information on their websites and that 21 of these agency websites ignore home buyers and sellers. The consumer information, which should be prominently identified as such, includes:
- whether an agent is licensed,
- whether an agent has been disciplined by regulators,
- whether and when an agent must loyally represent the interests of their client,
- what consumer rights and protections exist, and
- how to complain about agent practices thought to be unfair.
“The inadequate consumer information provided by most real estate commissions largely reflects the fact that these commissions were created and are dominated by the industry,” said Stephen Brobeck, a CFA senior fellow. “Only a small number of these regulatory agencies seem aware that they have a responsibility to serve consumer as well as industry interests,” he added.
States With Good Consumer Information Are Diverse
Among the 50 states and District of Columbia, the report identified 11 websites (22%) as having good consumer information, 19 websites (37%) as having fair information, and 21 websites (41%) as having poor information.
The 11 states with good consumer information are diverse in terms of region, size, and political orientation. The states are Alabama, Arkansas, Connecticut, Hawaii, Idaho, Maryland, Nebraska, New York, North Carolina, South Dakota, and Texas.
The report established criteria for evaluating the states websites that include not only types of information, but also how this information was presented. For websites deemed poor, there was no recognition of consumers; the website was obviously intended solely for the use of real estate professionals. For websites deemed fair, there was some recognition of consumers, but the consumer page was not prominently featured, included incomplete information, and/or lacked information about agent roles and representation. For websites deemed good, the consumer page was identified in the main menu on the home page and included a broad range of information including agent roles and responsibilities. The Alabama website was especially informative and easy to use.
No website included a description of all important consumer protections, adequate explanation of the sales process, and useful advice to consumers about how to receive good value from agent services. The South Dakota and Connecticut websites came closest to providing all this information.
New CFA Publications Offer Tips to Home Buyers and Sellers About How Best To Select an Agent
Over 90 percent of those buying and selling a house work with a real estate agent, but how does one choose one among nearly two million licensed agents? To assist consumers in making this decision, CFA is releasing consumer tip sheets – Home Seller Tips for Choosing a Real Estate Agent, and Home Buyer Tips for Choosing a Real Estate Agent.
Tips for both buyers and sellers include:
- Research agent experience and consumer reputation using Zillow’s “agent profiles.”
- Ask a potential agent whether they will represent your fiduciary interests – be completely loyal to you — through the entire sales process.
- Ask the agent if they will work with you all the time or delegate much work, including showing properties and responding to your calls or emails, to other team members.
Tips for home sellers also include:
- Ask the agent whether your property will immediately be placed on the local Multiple Listing Service (MLS).
- Try to negotiate a lower commission, especially if the sale price is high, you are selling and buying different properties with the same agent, or your agent also recruits and works with the buyer. However, also ask if any rate reduction will come from the buyer agent’s commission, providing less incentive for them to show your property.
Tips for home buyers also include:
- Qualify for a mortgage for your new home, which will help ensure initial agent interest and attention.
- While sellers typically pay the buyer agent commission, ask the agent if they are willing to rebate any of this commission back to you.
Contact: Stephen Brobeck, firstname.lastname@example.org