It’s been a busy couple days for the real estate industry. On Thursday (Nov 19th), the Department of Justice filed a lawsuit against the National Association of Realtors (NAR) alleging that trade organization’s practices and policies are anti-competitive.
Then today (Friday, Nov 20th) a settlement was announced between NAR and DOJ. As a result, what consumers will see soon is the commission the Buyer’s Brokerage is being offered on public home search websites. For the SloCountyHomes.com site, it should mean that my MLS will include the commission the Buyer’s Brokerage will receive in the data feed I have. Once available, I’ll need to hire a programmer to modify my scripts to download this new field and include it in the MLS Listing Detail page. This is the page that is displayed when you click on a property address on one of my Listing Reports (Today’s new listings, Past 7-day solds, etc.). Currently I display ALL fields I get from my MLS feed, something very few home search sites do.
The lawsuit was also to address Buyer Agents who steer Buyers away from listings that offer lower commissions to Buyer Brokerages. For example, one listing my offer a 3% commission and another a 2% commission. Some Buyer agents will treat these listings differently with some not presenting the lower commission listing to their Buyer. Buyer Agents were already told not to do this and the DOJ lawsuit does little to stop this activity. But having the commission being paid on home search sites will let Buyers question why their agent is only showing them listings with 3% commissions.
To me, the true fix to the Buyer commission problem is to stop the Seller from having to pay the Buyer’s Brokerage. Let the Buyer pay the Buyer’s brokerage. Then the Seller can pay for the listing service (a $9,900 flat fee that we charge) and the Buyer pays for the services of the Buyer’s Brokerage. Buyer Brokerage’s can then set their own fee for their services rather than having the Seller determine how much they will receive. Buyers will then have a choice of what Realtor they choose based on the service they offer and the price for their service.
We’re not there yet but with this latest DOJ suit, the days of 5-6% commissions just because “that’s the way it’s always been done” will not last long.
I’ll leave this with my new slogan…
Friends don’t let Friends pay $35,000+ for a Listing Service!