In a settlement of an anti-trust lawsuit (one might more accurately call it a capitulation), the National Association of Realtors will open its multiple listing service to Internet brokers.
The NAR tried to put a brave face on this development, but consider:
1. Anyone finding a property via an internet listing will pay the Internet service whatever they charge, and the listing broker will get at most a co-broke (half a full commision, which is what they’d normally get if another broker brought the buyer). That’s a big reduction in income to brokers in aggregate
2. This development will erode the stranglehold of the MLS. Why pay 3% if you can get good exposure via the Internet and feel competent to show the house and negotiate a sale? Or if you want a third party to handle the negotiation, having your attorney do it would in the great majority of cases be cheaper than the co-broke fee. The Federal government estimated fees could drop from their current level of 5% or 6% to 1%.
First we had the real estate downturn, and now this to thin the ranks of residential brokers.
The National Association of Realtors will open its vast listing of homes for sale to cheaper, Internet-based brokers in an agreement to settle a federal lawsuit, the government said in a statement on Tuesday.
The change could save those who buy or sell a home thousands of dollars since commissions could drop as much as 1 percent of the selling price, said Deborah Garza, the deputy assistant attorney general for antitrust,…
The settlement will lead to “more choice, better service and lower commission rates,” Garza added.
Essentially the deal requires the 800 multiple listings services associated with the National Association of Realtors for various local markets to give access to Internet-based competitors, the government said.
The real estate group did not acknowledge wrongdoing in the settlement, which it described as a “win” for both consumers and agents.
“We think it’s great,” said Lucien Salvant, a spokesman for the National Association of Realtors. “There was no evidence ever brought by the Department of Justice that there was a problem.”…
The settlement also requires the group to offer training on complying with antitrust law.
The National Association of Realtors has more than 1.2 million residential real estate members throughout the United States. In almost every area of the country, brokers have organized multiple listings services to share information about homes for sale.