BOSTON - Homeowners and buyers should band together to challenge the "informal cartel" of agents, brokers, and mortgage companies that make up the real estate industry, consumer advocate Ralph Nader said Saturday. "Consumer sovereignty rules the economy. But that´s just in theory," Nader told about 200 homebuyers and real estate professionals at a nationwide conference sponsored by the Massachusetts Homebuyers Club, a consumer advocacy group.
Nader said more organizations like MHC are needed to help real estate consumers get their money´s worth. Complex mortgages and contracts, brokers who work both sides of a real estate deal, and a powerful industry lobby in Washington and state capitals all work against homebuyers, he said.
"Democracy is in serious trouble in the USA because it is not organized where you live in relation to where you work," Nader said, suggesting a national organization modeled after the American Automobile Association.
He cited an organization in Toronto representing 40,000 homeowners that records consumer complaints, secures utility discounts, provides names of contractors and even watches houses when members are away from home. The organization charges yearly dues of $40, Nader said.
Nader, head of the Center for Responsive Law, heralded one recent industry development, buyer brokers, and derided another - dual agents.
He said the industry needs more buyer brokers, who represent consumers negotiating real estate deals and help them get the lowest possible price. Most agents represent sellers, but not all buyers realize that, he said. As a result, they sometimes discuss financial information or other details they shouldn't disclose.
Dual agents represent both the buyer and the seller, and Nader said that situation is rife with possibility for conflicts of interest. When forced, an agent will side with a real estate company over a buyer in virtually every instance, he said.
"You´ve got to have someone representing you who represents only you," Nader said.
The state´s Executive Office of Consumer Affairs is holding public hearings to evaluate a new real estate disclosure form that address the practice of dual agency.
Source: Middlesex News, April 4, 1993, Robert Trott
Nader attacks real estate `informal cartel´ 
