Commercial PropertyTo The New York Times: What Goes Around
After publishing a scathing article urging consumers to skip using real estate agents, The New York Times announced it would be cutting about 500 jobs due to challenging ad sales.
While the two events appear unrelated, there"s a delicious irony to be savored. While the newspaper nobly separates editorial from advertising (or otherwise, why would it risk infuriating one of the largest consumers of advertising display and classified ads -- real estate agents?), it"s experiencing the same mid-life crisis it accuses the real estate industry of mismanaging -- what to do about the Internet.
"The 6 Percent Solution: Skip Real Estate Agents" by Damon Darlin, published September 17, 2005 was an indictment of the real estate industry, made even more virulent by the reporter who got the facts so wrong, The New York Times had to issue a correction.
Not-so-Darlin", getting his opinions straight from the equally misinformed Department of Justice, states with outrage, that "if agents want to protect their commissions, they have to restrict access to the M.L.S. to sellers who are working with them, not going it alone."
Damon doesn"t appear to understand that the MLS is operated by real estate agents through their associations and/or brokers to help brokers and agents sell homes for sellers. The MLS isn"t a public utility, and it isn"t a charity. Why should brokers promote a home in their own cooperative for someone who doesn"t want to work with agents and is isn"t willing to pay agents for their services? That"s like forcing The New York Times to publish The Washington Post"s stories, while the Washington Post gets the ad revenues, simply because it would be convenient for readers who want to read both papers but don"t want to pay for subscriptions.
How much sense does that make?
After describing agents suing each other over copyright infringement and restraint of trade over entering "for sale by owner" listings into the MLS, Damon writes that the "Realtors association found what it thought was a better solution. It passed rules that essentially allowed a local M.L.S. service to block access to the listing service to any brokerage firm who discounted commissions or who posted listings for homeowners who intended to sell their own homes."
Wow, if the MLS really did block access to the listings service, the whole country would be up in arms. But they"ve never done that and never will.
To atone, The New York Times issued this wimpy, confusing and inaccurate correction:
Correction: Sept. 20, 2005, Tuesday:
An article in Business Day on Saturday about home sellers who do not use real estate agents referred incorrectly to former rules that are at the center of an antitrust lawsuit brought by the Department of Justice against the National Association of Realtors. The association allowed members to block customers" Internet viewing of certain property listings on the Multiple Listing Service - not a brokerage firm"s access to the M.L.S. itself.
Again, for the umpteenth time, the rules were not designed to block customers from seeing Internet properties. Any customer can contact any agent member of any MLS and view listings by establishing a business relationship. That was never in question. Certain parties wanted to use other brokers" listings to get customers not serve customers, and some brokers feel that all they owe competitors is access to the listing, not an advertising model. And they certainly don"t owe non-represented buyers anything, any more than The New York Times owes readers who don"t want to pay for subscriptions.
So what"s the ironic part?
Darlin suggests that "technology is giving consumers tools to nearly circumvent the agent. If enough people try it, agents are at risk of losing a good portion of their commissions -- $100 billion last year."
This is something he cheerleads, even giving readers online tools to use that can help them value their homes without the help of an agent.
But that"s exactly what"s kicking The New York Times in the pants. Consumers are going to other sources online to get what they think they can"t get at nytimes.com.
The result? As many as 500 people will lose their jobs, mostly at newsrooms, over the next nine months.
Said one MarketWatch report by David B. Wilkerson, "The industry is also making a difficult transition to an online model, as more readers get their news from the Web, and classified ads increasingly migrate to online destinations."
So, the pot is calling the kettle black.
There won"t be any gloating, however. Unlike Darlin and his job-challenged colleagues, Realty Times would never encourage or applaud the loss of jobs.
Jobs are too important -- to individuals and the economy. It takes jobs to buy advertising, whether you"re a homeseller or a Realtor.