Resi Rundown: The hypocrisy of “marginal agents”

Are marginal agents — defined as those who sell five or fewer homes per year — ruining the residential real estate sector for everyone, including consumers, as a study by the Consumer Federation of America concludes in a recent report?

Or, is it just an argument to try and get higher-volume real estate agents an even bigger piece of the pie?

The Real Deal’s Hiten Samtani breaks down CFA’s report, which, after studying five mid-tier markets, says that marginal agents — who pocketed about a quarter of the residential commissions — are impacting the quality of service and perception in the industry as well as negatively affecting consumers with their inexperience. Pro agents have to work harder and dedicate more resources to acquire clients, the report says.

But Samtani says CFA’s conclusions read like an ad for the National Association of Realtors. Further, Samtani notes NAR commissioned a report in 2015 that found marginal agents destroy the industry’s reputation, which sounds suspiciously similar to CFA’s conclusions.

NAR pushes back on any outside regulation, often citing free market principles. Yet calling for fewer marginal agents — i.e. soccer moms or teachers with a side gig — appears to be anything but the free market speaking.

“Won’t free market principles dictate that the best agents will rise to the top regardless of what else is out there?” Samtani asks. “The NAR ain’t the Marines.”

— Ted Glanzer