Daily Real Estate News  |  July 26, 2006  |   Stevens: We Believe in Power of the Marketplace
In commentary published Wednesday in USA Today, NATIONAL ASSOCIATION OF REALTORSŪ President Thomas M. Stevens illustrates the ultra-competitive nature of the real estate business and says the Internet has boosted demand for real estate professionals.

“America’s real estate industry is one of the most competitive business environments in the world, characterized by low barriers to entry, intense personal client service and performance-based compensation,” Stevens writes. "Virtually every business model is represented in our membership, and we believe in the power of the marketplace to drive innovation and foster change."

He goes on to say that brokerages and the nation’s multiple listing services have invested billions to make listings freely available online to the public, which has spurred innovation and made real estate one of the biggest commercial uses of the Internet.

In other businesses, Stevens says, the Internet has diminished the role of the professional. "The opposite is occurring in real estate,” he says. “More families than ever are turning to real estate professionals to help them buy or sell a home.”

Stevens' commentary, titled "We Compete, Clients Benefit," appeared in the opinion/editorial section of USA Today, countering an editorial that claims the real estate business is "inefficient, anti-competitive, and anti-consumer." The editorial also criticized minimum-service requirements and bans on buyer rebates, among other things.

The issue of competition in real estate also took center stage on Tuesday. NAR delivered powerful testimony at a U.S. House Financial Services Subcommittee hearing that examined the changing real estate market and the development of the Internet.

NAR President-elect Pat Vredevoogd Combs told the subcommittee that competition in residential real estate has never been more intense, noting that brokers are operating almost every conceivable business model and negotiated sales commission rates at their lowest levels since 1991.

— REALTORŪ Magazine Online

FULL COMMENTARY IN USA TODAY, JULY 26:

We Compete, Clients Benefit

America’s real estate industry is one of the most competitive business environments in the world, characterized by low barriers to entry, intense personal client service and performance-based compensation.

There are approximately 2.6 million real estate licensees in the United States — one for every 83 adults. Nearly 1.3 million of these are REALTORSŪ who agree to abide by a strict code of ethics. Virtually every business model is represented in our membership, and we believe in the power of the marketplace to drive innovation and foster change.

Firms and agents fiercely compete with each other for listings and sales on the basis of service, reputation and price. New business models, such as limited service firms and Internet-based brokerages, as well as traditional firms and discount models, offer consumers a range of options to work with professionals in residential real estate rarely seen in other professional services.

Brokerages and the nation’s 900-plus REALTORŪ-owned and operated multiple listing services have invested billions to make their listing information data freely available online to the public, a decision that has fostered innovation and made real estate one of the biggest commercial uses of the Internet.

Increased consumer access to real estate information online is redefining how consumers engage real estate services and may be contributing to the growth of real estate markets and a high level of competition. Potential sellers are more knowledgeable about property values, alternatives, and service options.

Better informed consumers demand more of their real estate agents and other service providers. More choices and new ways of doing business are paying off for consumers. On a national basis, competition and greater efficiency resulting from innovation have paid off for consumers; on a national basis, the average commission has declined 16 percent since 1991.

The fact is that unlike other businesses, where the Internet has diminished the role of the professional, the opposite is occurring in real estate. More families than ever are turning to real estate professionals to help them buy or sell a home.

Tom Stevens is President of the NATIONAL ASSOCIATION OF REALTORSŪ