As you may or may not know, several private cases are proceeding against the National Association of Realtors and several real estate corporations. A couple of companies have already settled but cases against the remainder went to trial this week.
The Justice Department is likely to step in with an antitrust suit.
One of the first things on the chopping block is forcing the seller into a 6% commission and the splitting of the commission with the buyer’s agent. This is effectively enforced by blacklisting seller’s who balk from the various listing services and buy steering buyers away from their homes to other homes.
Better yet, a successful lawsuit would allow buyers and sellers to avoid agents and brokerages altogether, with buyer’s being able to list their homes themselves on such a service and to utilize a real estate attorney on a set fee to handle the closing paperwork when the buyer accepts an offer.
There are other ramifications as well.
The expected side effect would be immediate in that at least half of the nation’s real estate agents would be immediately thrown out of the industry and the remainder would likely end up as salaried employees, as brokerages would have to handle clients on a set fee rather than a percentage of the sales price.
It would also likely result in the breakup and termination of the National Association of Realtors, which has always been a scam to help the industry keep its monopoly.
They have a nice little school scam going as well, have to pay brokerages to attend their classes to get licensed which is costly and time consuming when they could just hand you a book and have you take a test.
While demand is high and supply is low, land owners can do a lot on their own but…this too shall pass. When I look out into what I believe is “our” future economically, it looks dark. If this is accurate, it will then darken in many areas very quickly. It’s at that time, a realtor’s expertise would become more necessary.
The last realtor i had had the “expertise” of sitting on her lazy butt and hoping the house would sell itself.
We even had one couple come and see the house that told us they wanted to see my house but the realtor discouraged them from seeing it while she was under contract.
After the contract ran out and i listed it for sale by owner they then came to see it.
In fact they made an offer but it was contingent on their house selling first. I turned it down because i had no clue how long it would take for theirs to sell.
I did eventually did sell it by owner which thoroughly po’ed the realtor .
A lot of agents do little/nothing more than list a house in the multi-list service (“the cartel”) and walk away. They don’t earn their commission. I hav,e no sympathy for real estate agents
2.) Anyone (craigslist, Zillow etc.) is free to form their own multi-list service. There is ZERO barrier to free trade here.
3.) What makes the most-successful multi-lists better than Zillow, Craigslist etc. is that random-joe the-con-artist cannot list a home there. The successful multi-lists are limited to licensed real estate agents who have passed a test showing their basic knowledge of real estate law and who typically practice real estate sales as a 1st or 2nd job.
I don’t see this as being a valid case whatsoever.
You wanna open a competing multi-list service? You are 100% free to do so.
You wanna list a home in the trained-and-licensed agents-only multi-list service? You are free to do so if you get trained and licensed. It’s not hard and it’s not expensive.
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What’s next? Anyone can call themself a lawyer or a doctor? "Hey the Bar Association is open only to people who . . . "
Ii bought my house in 2011. I was fortunate to have a real estate agent who was familiar with prices and the routines to go through. There is no way I, who had no prior interest in real estate, could pick that up in a few weeks…and even if I could the cost in man hours would be a lot more than the fee.
The same agent sold our old house. It was good to have someone familiar with the market.
Fine, do it yourself if you can and want to. No thanks.
Broker compensation in the U.S. has typically been about 5% to 6% of a home’s sales price, with about half paid to a buyer’s broker.
Home sellers complained that this model suppressed competition by keeping commissions for buyer brokers in the 2-1/2 to 3% range despite the brokers’ diminishing role, with many buyers able to find homes independently online.
That sounds like a correct statement to me.
The buyer’s agent has a much diminished role these days, and the fact that the buyer’s broker receives roughly half of the 5-6% commission is enforced only by tradition & a cartel-like arrangement.
However that verdict seems completely unrelated to one or more of your statements in the OP including
Multi-list services are open only to trained, tested and licensed professionals.
No rank amateurs with weird ideas allowed. If you want to advertise you home on something like Craigslist, or Facebook marketplace, you are free to put ads there. (You can also sell stocks and bonds there.)
But just like stocks and bonds, if you want to list your home for sale among the professionals you need to hire a professional.
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(BTW These days if all you want from the professional is for the professional to place your home in the multi-list you can do so, but you and your listing have to meet his standards of professionalism or he risks losing his license.)
On the seller side
I searched the term “Help-U-Sell” (name of a discount broker with a couple offices in the north east) and immediately confirmed, from Google Ads there are similar discount brokers stretching as at least as far Ohio and Michigan. I think it s a safe assumption there are several in every state.
They charge 1-1.5% (plus whatever amount goes to the buyer’s agent) to provide you with some standardized blank forms, list your home in the multi-list and walk away
On the buyer side
Buyers agents put in a lot of time but:
If you are not a first time buyer, all you need is access to the multi-list website and access to the homes. He could be replaced by an hourly security guard (paid by the seller??) who escorts you as you tour the houses.
As with any profession, realtors are paid for their expertise. I was a realtor for 2 years, for 2 years because I got my license at the end of December 2007… Really bad timing. While it is true that the Internet has made selling and buying a home a process that most people could do, a good realtor does things and knows things that a potential buyer especially might not know or think about during the buying or selling process. Being able to do comps, knowing what a reasonable price is for a house. Is the seller demanding top dollar, why are they selling? Knowing Seller motivation helps to know how willing they are to negotiate…
I got a lot of questions from buyers not strictly about the house. Parents usually wanted to know about school districts for example. I got questions about neighborhoods, crime rates, local amenities, city or county service providers etc., and always questions about the history of the house- did someone die in it or was it ever a meth lab, is there an HOA and what are the fees. Learning these things or finding out on behalf of a buyer takes time, which most buyers don’t know how to do or care to do it anyway. Realtors also act as a go between buyers and sellers, often told to ask questions or make statements that are uncomfortable or confrontational when done in person. Then there are property laws and rights that may come into play, what if the sellers fence is 14 inches over their neighbors property line for example.
Again, like any other profession, there are good and bad people in them, there are lazy and diligent people. There may well be a need for some scrutiny into the profession and the fee structure, but being a realtor is not just about putting a price on a house. It ought to make sense that if a house is worth more, the realtor makes more. Why would a realtor bother to spend extra time and gas to show a 500 thousand dollar house way out in the country if they made the same money showing 75 thousand dollar homes much closer?
Full service stock brokers are a thing of the past.
Individualized personalized insurance salesmen are going the way of the albatross.
No longer will an intelligent person walk into an attorney’s office and expect to pa $500 and expect the attorney to to draw up a simple will or sales contract.
shopping malls and movie theaters are going the way of the milkman and the Sears catalog.
The point?
Things change.
The modern Internet has been around a quarter century now, and the “full service real estate agent” is no longer a working model.
However,
what is unique to the demise of full-service real estate agency is that in this case, many people seem to have some sort of self-righteous sense of angry-victimhood.
Remember when people started getting their insurance online?
We did not angry self-righteous angry exclamations like, "What ?? The rate I was paying for my car insurance included paying the income of some guy who sits a desk selling insurance?
That’s a cartel! That’s a monopoly!
What benefit am I getting from him? He’s not doing me any good at all! I could have filled out those forms and given them to his boss just as easily as he did!"
The Internet has brought about a lot of changes good and bad. I don’t see the complete demise of some things for awhile yet as there are still plenty of technology Luddites (like me) who can’t or won’t learn all the new fangled stuff. Funny thing, I was in high school when the TRS 80 came out. I thought it was the coolest thing in the world and that I would learn computers as they evolved. Unfortunately, my computer skills topped out with that model.
but think of this:
If you had to buy a house today, how would you do it?
What about insurance? Stocks?
If you spent 20 mins buying a pair of shoes,
are you really getting $5 worth of service from the high school kid who sold you the shoes? (Gee he carried them all the way from the tock room to the chair where I was sitting!")
Absolutely I do things differently today, and I do learn what I need to. I do manage my own stocks and my house needs have changed. I don’t care about schools or a lot of other things I did 30 years ago. I don’t know about insurance. I do shop for the best rates when I change companies but beyond that, It’s more complicated than I care to mess with, perhaps deliberately so…