Congratulations to SmartMoney for its balanced and extremely well-researched piece on what writer Alyssa Abkowitz terms “kingpin brokers,” of which I am hardly one.
In cities as far-ranging as Amsterdam, N.Y., Augusta, Ga. and suburban Cleveland, such brokers can have more than 100 listings and turn down new ones without a second thought. Says the magazine:
Have a buyer’s agent and want to see a home listed by the market leader? Forget it, if that mega-agent won’t split commissions; she’s likely to shut you and your agent out.
And who needs to advertise a property? A top broker might offer the home without even placing it on a multiple-listing service, the holy grail of real estate advertising, because he “knows everyone.”
Broker Judy Phetteplace, who holds a majority market share in her territory outside Albany, N.Y., says she’s earned the right not to share commissions with other brokers: “I don’t have to put up with the aggravation.”
Nor is she without her critics, among them, buyer’s broker Tom Wemett, who has complained to the New York licensing authority, the Department of State, which wouldn’t comment. “She makes it a hassle to even see a home,” he contends.
Phetteplace engages in a practice that many brokers, including me, refer to as a pocket listing. As the magazine puts it:
Most agents register every home they try to sell on a multiple-listing service, or MLS, a shared database that any agent or broker can see, as long as they pay a fee to join. But once a broker uses the MLS, she’s required to let other agents show the home, and to split the commission with them if they bring in a buyer.
Phetteplace, in contrast, says that’s “the lazy way of doing business”; why should a competitor get a chunk of her commission just because he happens to stumble across an online ad? She skips the database entirely, advertising listings in other media, like the local paper and her own website, to attract buyers. . .
If a buyer’s broker accompanies a client to one of her homes, Phetteplace tells that broker that he or she needs to sign a document agreeing to waive any commission from the sale.
Real estate lawyer Douglas Miller, who founded a group called Consumer Advocates in Real Estate, makes a good point: “If you limit the supply of buyers, demand goes down.” So, in an unknowable number of instances, most prices fail to reach their potential high.
Another broker featured in the piece is Augusta broker Gardell Lewis, who revels in dual agency; that means he represents both buyer and seller in the same transaction, looking out somehow for the best interests of each and consistently garnering his full 7 percent commission.
According to Lewis, both sides get smoother service and fewer delays because of dual agency and his vast chain of acquaintenances. “People recognize me in the grocery store,” he boasts. “I’m the one [sellers] pick.”
Other kingpins also are profiled in the article, which undoubtedly will prove to be an eye-opener for many consumers and brokers alike. Do have a gander.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022