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Home Buyer Rebate Debate

September 21, 1997

The idea behind Costco's program ("Costco to Unveil Rebate Program for Home Buyers," Sept. 14) is that the only value a real estate agent provides for a buyer is to show homes and the only value for a seller is to have someone put a sign on the front lawn.

Of course, if that is all a buyer or seller is looking for, this approach would be fine. There are many agents who would be happy to reduce their income by more than 33%, assuming they make up in numbers for what they lose in per-transaction income.

Does the public really expect these agents, who are self-employed independent contractors, to spend any quality time with them?

Who is going to explain the tax advantages of ownership to first-time buyers? Who will explain what Mello Roos tax districts are? Who will discuss important disclosable items and make sure sellers do the same so they avoid the always possible litigation from upset buyers? Who makes sure the buyers have proper physical inspections of new homes?

Who makes sure the seller's home is appropriately marketed (other than a sign on the front lawn)? Who makes sure the seller has a reputable pest inspection company?

As a Realtor with more than 10 years of experience, with an undergraduate degree in accounting and a master's degree in business, as a co-owner of one of the largest independent real estate brokerages in south Orange County, I can assure you that our agents do all the above because we train them to.

Who will do it for 35% less income?

STEVE BACKER

Landmark Realtors

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I read the Costco article with disbelief. A national discount retailer proposes (for a fee) to refer its customers to real estate professionals to handle the sale or purchase of their homes. The real estate professional will also pay a fee--no less than 35% of his or her commission--to the retailer, who will then reimburse a portion of that money to its customers.

As a Realtor, why do I feel like the victim of a multiple mugging? This national company proposes to take a hundred bucks out of its customer's pocket to be entitled to take thousands of dollars out of my pocket.

It's pretty clear how the Realtor will lose in this scenario, but what about the other muggees--the buyers and sellers about to embark on the most important transaction of their lives?

As anyone who has ever bought or sold a property knows, a good Realtor has years of training in marketing, representation and the legal and financial aspects of real estate transactions. No experienced, successful broker is going to give up 35% of his or her commission in return for a buyer's (or seller's) name.

The buyer (or seller) will be enticed by the promise of big bucks, only to be serviced, if at all, by the less qualified and experienced among real estate professionals. The buyer isn't responsible for the commission in the first place, and the seller has much, much more to lose if he or she receives inadequate representation.

In the event of a complicated sale or a marginally qualified buyer or a "hot" market when there's hardly time for a Realtor to keep up, who will get the attention? The deeply discounted client? I doubt it.

Instead, I suggest that this national retailer open up a little real estate office in each of its outlets. They can hire their own agents, promise them a never-ending list of names and a permanently substandard income.

CASEY KELLEY

Topanga

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