Lawsuit Challenges How Realtors Get Paid by Lee McKnight

On March 6th 2019 an antitrust class action lawsuit was filed on behalf of home sellers who sold their homes on 21 of the largest Multiple Listing Systems (the computer system that Realtors use to share listings and cooperate on their sale) against the National Association of Realtors (NAR) and 4 of the largest Brokerage firms (Remax, Realogy Holdings, Home Services of America, and Keller Williams). The case is Moerhl v National Association Realtors.

Although relatively unknown to the general public, this has been the shot heard round the world in the Real Estate community as the Brokerage Firms, and Multiple Listing Services (MLS) try to figure out where this could lead and how to get ahead of it.

The lawsuit posits that MLS’s requirement that the seller pays the buyer’s broker a pre-determined and unnegotiable fee is unjust and that MLS is conspiring to establish and maintain commissions for the buyer brokers that is higher than if buyers were able to negotiate that fee. The suit also argues that the fee paid to the buyer’s broker may not be justifiable given that buyers are now doing more of the work involved in buying a home since they have access to the inventory.

When the Realtors decided to convert “the Book” (a telephone directory-like tome that was published every two weeks, with all the available homes for sale) to a digital format and make it available to the public, many Realtors thought it would be the demise of our industry because they believed that all we had to offer was access to the inventory. Not only did the representation of buyers by Realtors not go away once buyers had direct access to inventory listings, but it also flourished. As Real Estate transactions became more complex, both consumers and Realtors realized that Realtors had a lot more to offer than a list of addresses.  

I have long felt that how we get paid could be more transparent. I’m in favor of anything that unbundles the costs and clarifies how we get paid.  By unbundling, I mean that there should be a way that sellers pay Realtors to list their property and buyers pay Realtors to help them buy a property.  

Separating these costs is difficult in practice because many buyers don’t have the cash to pay their broker, so the cost of the broker gets bundled with the price of the property.  Allowing buyers to finance the cost of being represented by a broker is one possible way to address this issue.

Although this lawsuit is fascinating to me–and I think it will lead to more honest conversations about how we get paid–it does not address the inherent conflict of interest of basing the buyer broker’s pay (their commission) on the buyer’s purchase of a home at a certain price. The current model can encourage agents to pressure buyers into making decisions based on their desire to get paid versus doing what’s in the buyer’s best interest. Alternative ways to pay buyer's brokers could be an hourly wage, or a non-contingent flat fee paid upfront.

I’m not sure the market is ready for either of those ideas yet, but I believe it could be the next step towards consumer empowerment.

For Your Convenience by Lee McKnight

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We know you all are busy people which is why we want to be sure that you are aware of all Hasson branch locations in Portland. And, we are excited to announce two new locations in Cannon Beach and Hood River.

Of course we love when we get to see you in person but we know that there are times when you just need to get things done where you are. 

Please call our office (503) 473-8550, or call me directly, if you have any questions about doing business at a Hasson branch!

2019 Portland Adult Soapbox Derby by Lee McKnight

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Camraderie, competition and community are the driving forces behind this volunteer-led event that's been happening on the slopes of Mt Tabor for the past 22 years.

A visit to Mt Tabor is never a bad idea and although the Derby brings more people to the park than you might hope to encounter, the ingenuity and hilarity of the race is worth the crowd hassles.

Pro tips for attending:

Take public transportation (parking is tight). 

Bring snacks (there are concessions...and crowds)

Respect the raceway- those soapboxes get moving!

Learn all about the Derby here>>

Exploring the South Portland Neighborhood by Lee McKnight

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Bordered by the Willamette on the east and the West Hills to the west, and marked by the Marquam Bridge to the north and the Sellwood Bridge to the south, South Portland is a long and narrow strip of awesome. The neighborhood is comprised of several different areas; it used to be known as Corbett-Terwilliger-Lair Hill. The South Waterfront is in the northeast part of the neighborhood and is distinct from the other areas because the residential construction is both more recent and much higher density. Lair Hill is the northwest corner of the neighborhod; Corbett lies to the east of Lair Hill and to the west of Macadam Ave; Terwilliger is south of Corbett, between SW Barbur Blvd and SW Macadam Ave; and Johns Landing area is east of I-5, between the Terwilliger curves and the Willamette River.

The South Portland Historic District, designated by the Portland City Council in 1998, was built between the 1870s and the 1920s. The site of Portland’s first residence is here. Built by William Johnson, a sailor from the war of 1818, the residence–which was actually a cabin–was built in 1842. Most of the area’s early residents were Italian and Jewish immigrants. Tragically, in 1958, Portland created the South Auditorium Urban Renewal District, and destroyed 54 blocks of this tight knit community. In 2015, this article in the Oregonian covered the history of and contention around Portland’s foray into urban renewal 60 years ago. The city is currently reviewing design guidelines for this historic district, you can learn more about their efforts and how to get involved here.

Close to OHSU, downtown, and near Lewis & Clark College, South Portland is home to a mix of young professionals, researchers, doctors, professors, families, and retirees.

South Portland is home to some of Portland’s earliest residences and one of its newest development areas. This makes the overall neighborhood feel more like a patchwork of distinct areas than one cohesive region. This mix of old and new is why you will find beautiful, historic Victorian houses mixed with new apartment buildings and condos. Unifying all areas of South Portland are the views of the west hills and the river, an abundance of parks, and proximity to downtown. The neighborhood also boasts the city’s only aerial tram, what more could you want?

Ammenities

All areas of South Portland have great access to downtown Portland, and both the I-405 and I-5. Public transit options are better at the northern end of the neighborhood because of access to the Portland Trolley (aka Portland Streetcar) and Aerial Tram.

There are no public schools within the South Portland neighborhood boundary. The two closest areas with elementary, middle and high schools would be Northwest Portland (Chapman Elementary, West Sylvan Middle School, and Lincoln High) and Hillsdale (Rieke Elementary, Robert Gray Middle School, and Wilson High). If you’re interested in a language immersion program in Spanish, Japanese, or Chinese, the International School–located in the northeastern part of the neighborhood–offers early childhood and elementary schooling.

The neighborhood is home to a variety of parks. The Corbett-Lair Hill area has Lair Hill Park, offering grassy fields, a play area, and tennis courts. The northeast portion of Marquam Nature Park is within South Portland’s boundary too. This park offers a network of trails and also connectivity to Portland’s 40-mile loop system of walking and biking trails. Elizabeth Caruthers Park is a lovely green space flanked by office and residential buildings. The park is home to the South Waterfront Farmers Market, which runs through the summer and is expanding to offer a monthly winter market this year! Willamette Park, spans a whopping 26+ acres along the river at the southern end of South Portland. The park is a great place for picnics, long walks, tennis, soccer, and getting out on the river in a boat or canoe. If you’re looking for a less manicured park visit, explore birds and native plants in the single acre of Butterfly Park, just south of Willamette Park. 

Points of Interest

Portland’s Aerial Tram is somewhat of a landmark in the neighborhood; opened in 2006, it runs from the waterfront to OHSU’s Marquam Hill campus in a fun-filled, 22 mph, three-minute ride that rises 500 feet. If you’re not specifically planning a trip to OHSU, a ride on the tram can be incorporated into a longer adventure that Portlanders call the 4T trail which involves a trip on the Max light rail train, some walking on the Marquam Trail, a ride on the Aerial Tram, and finally a quick trip on the Portland Trolley to get you back to Pioneer Square.

Duniway Lilac Gardens, situated in the northwestern quadrant of South Portland, are definitely worth a visit especially in the spring when you can see over 125 varieties of lilacs in bloom against a backdrop of fir and cedar in the surrounding hills. The gardens are named for Abigail Scott Duniway, the first legal female voter in Multnomah County.

Interested in digging deeper into the roots of one of Portland’s oldest residential areas? Consider taking the Lair Hill Historic Tour with Portland’s Architectural Heritage Center. You might also enjoy a brief walk around the Johns Landing Water Tower, redeveloped by famous architect John Gray, is a great example of Portland’s penchant for taking old historic structures and reusing them.  This 1903 furniture manufacturing building was reimagined and converted to a class A office space in the 1970’s, well before the practice was commonplace in Portland.

Culture

After you’ve taken a ride on the Tram, wander over to Elizabeth Caruthers Park in the South Waterfront area and have a bite to eat at Vietnamese Bistro Bambuza. At the southern end of the park, and the adjacent blocks there is a burgeoning collection of eateries and specialty markets like the Lebanese restaurant Al Hawr, Oracle Coffee, the Growler Guys, and Portland favorites Blue Star Donuts & Little Big Burger. For an upscale experience, with river views, try Rosswood at the River’s Edge Hotel.

Along Macadam Avenue, you will find the neighborhood’s only large grocery store, Zupans, and a collection of old neighborhood standbys including Bamboo Grove Hawaiian Grill, Corbett Fish House, Cafe du Berry, and the infamous Buffalo Gap.

Create More, Fear Less by Lee McKnight

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This wonderful organization was founded to help young adults (and all other people) who worry. Inspired by Portland author, Kathleen Lane's writing for young adults, Create More, Fear Less offers tools and ideas for acknowledging–dare we say appreciating–and working with our anxiety.

If you or your kids find yourself with some free time in these final weeks of summer, we highly recommend diving into one, or more, of the twenty projects available on the site. 

Support Create More, Fear Less here>>