Double Speak?

Remember when the national and state association went bonkers to keep BANKS OUT OF REAL ESTATE?

Last year I posted that the Banks are still way into real estate in that many market areas are controlled by short sale and REO properties with banks pulling the strings in the marketing and transactions, then there are the many wishful souls trying to figure out what makes mortgage modifications fly (maybe same thing that makes pigs fly?). Good luck!

The national and state associations are certainly murmuring about this dire situation, but to admit that the Banks are controlling the business in many areas would call to question the victory dance performed after congress sorta did what the trade associations lobbied for. Sorta--the Banks are creative and powerful--there are other ways to gain control--which we are now confronting with the property resource being seductively dangled in front of MLSs around the nation by the national association (with tacit support by the state association).

The MLS signs a contract to provide data to the property resource and they get this really cool application and a whole cart full of data--for free!! What a deal!! BUT WAIT--these same trade organizations were for many years promoting the idea that listings had VALUE--the listing brokers controlled the industry because they had contractual rights controlling the data. Well, we now know what the trade organizations feel the value of MLS data actually is--ZERO, at least where the national association's property resource is concerned. Just give it up, cause it has no value.

It gets worse. The property resource application and the creation of the database cost several million dollars (no one is saying just how much). How does that work? Give the application and data away for free--after paying millions of dollars to create them? Here's the kicker, the property resource will be SOLD to Banks--and appraisers and that money will pay for the creation. So brokers GIVE their data to the national association so it can SELL it (after doing whatever it wants to with the MLS data) to Banks and appraisers. Why will the Banks and Appraisers want it? Well, (yes it gets still worse) there's also an application called an AVM (or RVM--you know what the "r" stands for)--automated valuation model that allegedly will spit out a value on ANY PROPERTY in the US. Supposedly it is better than the "zestified values", but we know how good they are. So how does this benefit agents and brokers and the public? A computer program that has the same, not always accurate, MLS data that we already have, plus some other data that we already have, albeit in various places, will now produce a value based on that data, but none of the other attributes that help shape value to real people in the real world. The human element is on the way out of appraisal and real estate.

If a Buyer really likes a property--doesn't matter how well he or she knows the neighborhood and real estate values--the application will second guess that Buyer's opinion--which used to be called fair market value based on what a knowledgeable Buyer would pay for a house exposed to the full market. Wonder if the BANKS will make a loan based on the Buyer's opinion or the AVM figure that the property resource produces?

The BRAVE NEW WORLD is peering over the hillside! Yes, there's something perverse about agents and brokers putting their local experience, expertise and knowledge into an new environment where those attributes have NO VALUE and doing it because THEIR trade associations say it's cool. Oh there's also an agent valuation model, icing on the cake! I could push some buttons and easily develop a value on a property in, let's say, Beverly Hills--where I have never even been inside a house. That's what the public wants and needs--opinions of value unpolluted by anything representing knowledge and expertise.

I still maintain REAL PEOPLE live in REAL HOUSES--the virtual world of databases and techno-BLING applications is very cool, but it is NOT where we all LIVE.

This is ultimately a "one size fits all" problem--common with state and national trade associations. Stuff works better when you only develop it ONCE and then you're good to go. You can sell the product to ANYONE who has the money. If the product doesn't match the real world--what the hell, change the definition of the real world. One size fits all is best--it's so elegant and clean--all those complications that once made life worth living are magically GONE, to be replaced by the ultimate one size fits all commodities, MONEY and POWER.