By Beth McGuireRISMEDIA, May 21, 2007-Heavy hitters from the Realogy Franchise Group and the National Association of Realtors stepped up their response this past week to the 60 Minutes segment about online discount real estate broker Redfin which aired last Sunday. In letters written to 60 Minutes executive producer Jeff Fager, industry leaders expressed concern over what they said were a number of inaccuracies aired throughout the piece, namely the oversimplification of the home-buying process and that the 6% Realtor commission rate is “sacrosanct.”
“Putting aside the inaccuracies regarding ‘sacrosanct’ commission rates, lack of industry oversight and state governments conspiring to stifle competition, the segment grossly oversimplified the complexity of buying and selling a property,” stated Alex Perriello, President & CEO, Realogy Franchise Group in his letter to 60 Minutes. “Real estate brokerage is a performance-based industry. Clearly, not all real estate companies are alike. Results will vary dramatically based on a variety of factors, including the experience and track record of the professional you select.”
(For full text of Perriello’s letter see end of story.)
Perriello’s letter to 60 Minutes was brief by design, however he recently discussed his thoughts on the subject in an exclusive interview with RISMedia.
“We knew the piece was in the works for several months, but when I saw it, I was appalled at the number of inaccuracies in it,” said Perriello. Right from the very beginning-there was [60 Minutes correspondent] Lesley Stahl sitting in front of a giant 6% image almost as big as her as she stated that real estate commissions are ‘sacrosanct’ and suggested that commission rates are fixed. Everyone in the industry knows, including buyers and sellers, that commission rates are negotiable from the beginning of the process and that the average commission today is 5.1%, not 6%.”
Perriello said he couldn’t speculate as to why after several months of investigation, including three days spent at last year’s NAR convention in New Orleans, did the final piece not include more perspective from traditional real estate brokerage, saying only, “perhaps they initially thought they were going to find a big scandal but what they found was a complex industry they didn’t want to report about. There was no ‘smoking gun’ but they had to put something together for the story.”
Reaction to Perriello’s letter, distributed to all Realogy brands, ranged from supportive to angry, he said, over the idea that his letter should have been more reactionary. “There is a lot of emotion out there coming from the people who do this every day who found that piece to be offensive.”
Perriello said the essence of his message is that buying and selling real estate is not a simple transaction, and that “at the end of the day, selecting the right real estate professional is something that has to be taken seriously with a lot of thought. If 60 Minutes wanted to help their viewers they should educate them on how to make informed decisions on the questions they should ask when buying or selling a home.”
Meanwhile, NAR took offense over what it said was a lack of representation in a story where it was cast in a negative light and then unable to defend itself, despite several offers to provide spokespeople to 60 Minutes for the story.
“The CBS 60 Minutes segment on real estate…made several important errors of fact and never provided the National Association of Realtors the opportunity to several criticisms of its policies even though, as you know, three of our executives agreed to be interviewed during the thirteen-month course of your investigation,” stated NAR’s letter to the news program. “On two other occasions, NAR offered the sitting president of the association at the time to be interviewed. You turned both offers down. When such heavy-handed treatment makes it on the air, the first victim is the truth. The second is credibility.”
To read the full letter to 60 Minutes from NAR, click http://www.realtor.org/about_nar/NAR_letter_to_60_minutes.html .
NAR requested that 60 Minutes correct the following four points on its Web site.
* All real estate commissions are negotiable and the average is 5.1 percent, according to the most recent available data.
* The National Association of Realtors is a trade association and does not “govern” the real estate industry.
* There is no such thing as a national multiple listing service. Rather there are more than 900, which are all independently owned and operated.
* “Realtor” is a trademarked term and should never be used synonymously with “real estate agent.”
So far no changes have been made to the story.
Ultimately, Perriello says that while the story generated some buzz throughout the industry, its message should be taken in context.
“You know, it’s one story. You have to take it in context to what it is. It doesn’t change the challenges that are out there in our industry,” he said. “Realtors need to just go about what they do every day and do it well. If a customer asks you about this piece, be informed and respond accordingly. It shouldn’t change anything. There’s a job to be done and they need to get out there and do it. The people who deliver the results are the ones who will prosper and be at the closing table. That’s what people should focus on.”