Forty-one percent of state real estate regulatory agency websites present “poor” information to homebuyers and sellers while devoting themselves entirely to real estate professionals, according to a new report by the Consumer Federation of America.
Nearly half of state real estate regulatory agency websites ignore homebuyers and sellers and devote themselves entirely to real estate professionals, according to a report released this week by the Consumer Federation of America (CFA).
The consumer watchdog group reviewed the websites of real estate commissions in the 50 U.S. states and Washington, D.C. The CFA looked at whether a consumer could find out if an agent is licensed, whether an agent has been disciplined by regulators and for what, what roles an agent could play in relation to a consumer (i.e. loyal representative, dual agent, agent for another party or agent for neither party), how a consumer could complain if they felt an agent treated them unfairly, and whether the site contained general information about consumer protections, the sales process and advice on receiving good value from agent services.
“Only these government agencies can license agents and brokers, establish consumer protections, enforce these protections, investigate complaints against real estate practitioners, discipline individual agents for unfair practices, and make available information about all these regulatory roles,” the report said.
“Accordingly, it is essential that regulators make consumers fully aware of these services and protections and how they can be accessed. It is also helpful if regulators can provide information that demystifies the sales process and the role of agents.”
The report found that, of the 51 websites, only 11 sites (22 percent) had “good” consumer information, 19 sites (37 percent) had “fair” information and 21 sites (41 percent) had “poor” information.
“For websites deemed poor, there was no recognition of consumers; the website was obviously intended solely for use of real estate professionals,” the report said. “While most of these websites contain information of use to consumers, it was usually not easy to find and not identified as such.”
“Fair” websites were somewhat geared toward consumers but did not prominently feature a consumer page, included incomplete information or lacked information about agent roles and representation. Those deemed “good” identified a consumer page in the main menu on the home page and included a broad range of information including agent roles and responsibilities.
“The research found that no website could be considered excellent because none included a description of all important consumer protections, adequate explanation of the sales process, and useful advice to consumers about how to receive good value from agent services,” the report said. The South Dakota and Connecticut websites came closest, according to CFA.
The report found that there was no relationship between having a pro-consumer website and political affiliation or level of department resources. Sites deemed “good” were from all regions of the country and varied by size: Alabama, Arkansas, Connecticut, Idaho, Hawaii, Maryland, Nebraska, New York, North Carolina, South Dakota and Texas.
CFA put the lack of pro-consumer sites at the feet of the real estate industry. According to the report, in a large majority of states, real estate commissions are made up mostly of industry professionals and controlled by Realtors. Therefore, even sites with good consumer information tend to focus much more on information about licensing standards and continuing education requirements, according to CFA.
“The inadequate consumer information provided by most real estate commissions largely reflects the fact that these commissions were created and are dominated by the industry,” said Stephen Brobeck, a CFA senior fellow and the report’s author, in a statement.
“Only a small number of these regulatory agencies seem aware that they have a responsibility to serve consumer as well as industry interests,” he added.
Along with the report, CFA published updated tips for homebuyers and sellers on how to select an agent. The organization advised researching agents’ experience and reputation through Zillow profiles, asking potential agents whether they will represent their client’s fiduciary interests through the entire sales process, and negotiating a lower commission or commission rebate.