Mar052018

The National Association of realtors values urgency over truth, commissions over integrity

The National Association of realtors is a sales organization that pretends to be professionally objective. They want to be accepted as experts, but they shun the responsibilities that go with being a professional.

Repost from OC Housing News 2011-2016

The National Association of realtors is dedicated to advancing the interests of listing agents who dominate the organization. Their primary focus is to generate real estate sales and commissions that provide income for its members. It spends enormous sums promoting real estate sales with the mantra, “it’s a great time to buy or sell a home.”

The problem with this singular focus and approach is that it is not always a good time to buy or sell a house. realtors want to pass themselves off as experts on real estate whose advice can be relied upon by market participants. However, realtors have no interest in whether or not it truly is a good time to buy or sell because for them, it’s always a good time to generate a commission.

This conflict of interest causes realtors to be self-serving liars who line their own pockets at the expense of the people they ostensibly serve. I detailed this phenomenon in the 2010 post Urgency Versus Reality: realtors Win, Buyers Lose.

realtor Mind ®™

I once attended a realtor marketing seminar, and it was fascinating to watch the realtor mind at work. The presentation included many “reasons to buy” realtors could use in their own consultations manipulations with customers. There was little or no regard for the veracity of the claims, it only mattered that realtors have something, anything to create urgency in buyers.

Many realtors see their job as presenting buyers with reasons to buy, any reason, and hope the buyer is gullible enough to believe them. They feel no responsibility for buyer outcomes; whocouldanode, right? What other explanation is there?

realtor Mind is Everywhere

How widespread is realtor mind? Am I unfairly labeling a large group based on a few isolated incidents among unscrupulous practitioners?

Back at the peak of the housing bubble, the National Association of realtors produced the “Suzanne Researched This” commercial. The scene is set with a couple discussing a home purchase in their kitchen with a realtor voyeuristically listening on the phone. In stereotypical fashion the commercial shows women how to browbeat their spineless husbands into submission, and it shows men how to acquiesce gracefully and pretend you got something out of the deal.

In their defense, the NAR did not say prices are going to the moon, but it does show that manipulating people to buy — even in 2006 when it was disastrous to do so — it the primary goal of NAR advertising. It is easy to see this couple, and anyone who fell victim to the Suzannes of the NAR, going through the foreclosure process today. Is the NARs culpability for that? Are the Suzannes?

If there is a doubt that some realtors are simply clueless shills who will use the appreciation angle to their advantage, watch the video below:

Affordability measures

In the monthly reports I publish, I also measure the affordability of homes relative to historic norms. I developed a market timing system designed to inform people when conditions favor buying or selling., I also measure the affordability of homes relative to historic norms. I developed a market timing system designed to inform people when conditions favor buying or selling.

I believe I utilize a better methodology than the NAr, but the real reason the USA Housing News affordability measures are better has less to do with technique than it does with philosophy. I want to be accurate and tell the truth. The NAr wants to find some reason, any reason, to convince buyers to buy. It’s this difference in philosophy that directs every decision big and small that goes into the final product we each produce. It’s why my reports have value, and it’s why the NAr’s reports have none.

One would think that with the resources of the NAr and the data they collect, producing an accurate and useful report would be easy. Unfortunately, since they are burdened with a pathological philosophy devoted to deception and manipulation rather than truth and accuracy, they produce a worthless piece of propaganda.

If the NAr were actually interested in producing an accurate affordability index, they could easily do so. If they merely examined those times in the past when houses were not affordable, identified the conditions that made them so, and adjusted their index to reflect past reality (which is what I did), they could easily develop an index that is a robust indicator of market health that would send timely signals to market participants who are concerned about when they should buy or sell a house.

But that isn’t what they want.

The NAr wants to produce a piece of propaganda designed to manipulate market participants into action. By their own criteria, their affordability index is a success. Unfortunately, by the standards everyone else applies, their affordability index is worthless drivel.