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Redfin Chief Executive Glenn Kelman admits that he will be out of his element tomorrow as he testifies in front of the U.S. House of Representatives' Subcommittee on Housing and Community Opportunity.
"I don't even know what to wear," said Kelman, the Seattle online real estate entrepreneur who heads out on a red-eye flight tonight to D.C. "So I guess I am going to wear a suit." But Kelman does know what he is going to tell Congress, which is investigating how the Internet could affect real estate commissions.
"I am going to say how much friction there is in the business," said Kelman, adding that as one of the first online brokers Redfin has been "kicked and spat on" by the Multiple Listing Services in California and Washington.
Tuesday's subcommittee meeting follows up on this 32-page report (PDF) from the Government Accountability Office last year. The report says that real estate commissions in the U.S. are almost double what they are in other developed countries.
House Financial Services Committee Chairman Michael Oxley -- best known as a co-author of the landmark Sarbanes-Oxley Act -- looks like he may be on Kelman's side in this debate. Here's what the Ohio congressman had to say in advance of tomorrow's meeting:
"How can home buyers and sellers get the best real estate services at the lowest possible prices? Competition and choice are always the right answers to that basic question. Free-market competition is the hallmark of growth and innovation in our country. Man-made barriers to entry into markets result in monopolies that set the terms of the market and dictate the price. That is what we have today with regard to real estate. The consumer will benefit if free market principles are applied to real estate brokerage and management. Lower prices, improved services, and greater access to affordable housing will be the result."
Others scheduled to speak include:
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Posted by unregistered user at 7/24/06 7:49 p.m.
I've never wanted to watch C-SPAN before...until now.