FTC and DOJ Realtor Workshop
The FTC and DOJ conducted a workshop this week about the competitiveness in real estate. There hasn’t been much press coverage, but Rob has summed up the bulk of it here:Link to Rob’s Blog
The actual proceedings can be seen here on the FTC Facebook page:Link to FTC FB
In San Diego County, you can’t say there isn’t enough competition.
There are around 20,000 realtors, and last month we only sold 3,288 houses and condos! You can list your home for sale on the MLS for as little as $95, and every agent offers their own service/commission package for the consumers who are willing to shop around.
The main beefs:
- Commissions aren’t disclosed. The realtor community will fight hard to keep the actual amount of our commissions private, but it’s not that big of a deal. The buyer-agent commission is disclosed in every MLS listing, so it’s just the seller-side – which is disclosed, and agreed to, by the most important person – the seller! But if they were disclosed to the general public, we’d probably find that there isn’t as much difference between traditional and discount agents as we thought.
- Commissions haven’t changed with higher pricing. An ivory-tower professor ranted on and on about this topic, and cited two ancient studies of other industries that weren’t applicable. She needs to do a current study of actual commissions taken from the closing statements for accurate comparisons.
- Decouple the commissions, and have the buyers pay their own agent. While this sounds like a great way to lower the buyer-side commission in theory, it ignores two critical facts. A) Sellers are offering a reward, or bounty, to buyer-agents to sell their home, and should have every right to do that, and B) the likelihood of an agent being able to steer a buyer towards a home just because of a higher commission is extremely remote. If the FTC didn’t agree, then publicly displaying the buyer-side commission could help, and allowing rebates pretty much covers it – no other change needed.
What wasn’t covered:
A. What you get for the money. If the FTC and DOJ wanted to impose one thing to help the consumer, it would be requiring that every agent publish the exact services they provide for the money, and their actual recent experience in selling homes. Realtors have fought every attempt at publishing the sales history of individual agents, but have somehow allowed Zillow to do it openly. I think it’s time that consumers know the truth.
B. Enforcing the rules. With no enforcement, there are no rules. The FTC and DOJ could at least publish their opinions on pocket listings so agents know what is legal, and what’s not.
A couple of people mentioned that they should do another workshop with actual realtors working the street. I’m available!