Internet-Based Realtors Win Monster Settlement

coondoggie writes "Until today, most Internet-based real-estate brokers were considered second-class citizens, and their clients were left in the cold. But perhaps that will change with today's news that the Department of Justice has reached a proposed settlement with the National Association of Realtors that requires NAR to let Internet-based residential real estate brokers compete with traditional brokers. NAR has agreed to be bound by a 10-year settlement, under whose terms NAR will repeal its anticompetitive policies and require affiliated multiple listing services to repeal their rules that were based on these policies." Here's the whole settlement document on the DoJ's site.

Won't change a thing

[Anonymous Coward]

"Real" realtors will still blacklist listings by online or DIY listings. Non local "real realtor" basically translates into negligible viewings.

Obviously this is pathetic. I happen to have three realtors on my doorstep, and they sing the same song, claiming colleagues will do the same. You cannot break this kind of cartel when grassroots will practice it regardless.

Re:Great.

[QuantumRiff]

It has as much to do with this site as "internet-based" retailers did a decade ago. It is forging ahead, changing an industry. I don't have time to go sit with a realestate agent, I want to look at the houses online, and narrow it down to one or two, take a look at them, and make an offer. I don't want to have to give 3-6% of the sale price to somebody, when I do most of the work. (And no, posting some pictures and some text into a MLS database is not "work"). If I, as a nerd, can make the standard 6% commission go down to about 3% by using "internet-based" real estate companies, who have less infrastructure costs to support, and can make a profit on volume, instead of "services", then I can save many thousands of dollars. In California, many houses in "average" neighborhoods sell for around 400k. The commission you are paying to an agent is around $24k for the privilege of buying that house.

What about Realtors' conflicts of interests?

[whoever57]

Wake me when someone acts against real estate agents who are supposed to be representing the buyers stop getting commissions paid by the sellers. This is an obvious and massive conflict of interest.

I saw an item on TV where agents were saying that sellers wanted to place their houses with agents on the basis that the buyer's agent got a larger commission. Now, why would they do that if they did not think it would influence the AGENT of the buyers? If the seller can influence the buyer's agent, there is something deeply wrong.

Can someone explain to me how this obvious conflict of interest has persisted for so long?

And before anyone tells me that a realtor is necessary -- I bought a house in the US (for several hundred thousand dollars) with no agents involved on either side of the deal.

HUH ?????

[sciop101]

I do not understand the point of this.

Were on-line realtors outselling people standing in the property?

Was the internet better for buyer/seller?

Did the online agent get a better commission?

I thought real estate agents were all about follow the money$$$?

Re:Great.

[Frizzled]

Unless you've gone through the hassle of buying (or attempted to buy) a house this wouldn't be very clear.

Right now it is almost impossible to purchase a house using internet based tools. Every housing market is controlled by the local realtors and they are VERY territorial. This means extra calls to look at houses if you aren't using a local realtor, extra time spent researching because tools are intentionally crippled for non-local agents, houses that aren't "keyed" properly for non-local agents (meaning even if you've done your research, then had someone call on the house, you still might not be able to get in and see it).

This makes it harder to find (and buy) a house if you aren't working with a local agent. Knowledge is power, and with current tools & rules the local agents wield a lot of power over non-local (internet) based ones.

Time will tell if this ruling bears fruit, but it is definitely good news for any nerd looking to buy a house in the future.

Texas and NAR

[787style]

Someone I work with buys and rents out houses as a side hobby, and in an attempt to save money is on her way to get her brokers license. Along the way she needs her agent license, which is being refused to be given to her until she joins the Texas NAR.

Realtors ar eon the way out

[brunes69]

You heard me right. Realtors are going the way of the dinosaur. I am already seeing it happen.

Consider, anyone in my generation (20-30 years old) who is looking for a new home. What is the very *FIRST* thing you do when you are even considering it? Do you call an agent? No. You go to the web. You look on Facebook, on Cragislist, on Google even, and yes, MLS too. but the only reason you go to MLS is because it is on the web to begin with! Consider now, if you are selling a house and aiming for this market. Why would you pay someone 2.5%-5% commission to list on just one of many websites, when all others are free? Why not try it with the other sites first? Also - consider the number of *very heavily targetted* Face book ads one can buy for the price of an agent's commission!

I know personally of three different people who have bought or sold houses in the past month *ALONE* who did not have an agent involved at all in at least one side of the transaction. The trend is already there... it will only accelerate.

The legal side of the transaction is usually handled by an attorney - all an agent really does is bring bodies in the door. If you can get the bodies in the door via your own means there is no reason to pay for an agent.

Re:One anti-competative practice down, many to go.

[kenmtraveller]

I feel compelled to relate my good experience with a Manhattan broker. In 1998, I rented a 3K/month 1600 square foot loft in the financial district of Lower Manhattan. I paid the standard 15% of a years rent commission to the broker, a nice woman in her 30s. The landlord required a 9K dollar security deposit, which I paid. When I moved out 2 years later, after having the place professionally cleaned , I met the broker, who was practically in tears, to get my deposit back. It turned out that the landlord had left her an envelope with 6K dollars in it, saying that was the amount of my deposit he was returning, offerning no other explanstion. Then he got on a plane to Israel. She absolutely went nuts and swore that she would get me my money back. She called him (and secretly let me listen on the call) and asked him what the problem was, and he told her it was none of her business and to stay out of it. She told him that she couldn't do business with him if he was going to cheat people, and gave up his listing. She then got an ex-boyfriend of hers, a very prominent Jewish lawyer involved, at no expense to me. He resolved the matter by calling my landlord and threatening to make him persona non grata in the community for 'giving Jewish people in Manhattan a bad name'. I do not know whether or not he also threatened legal action. My landlord returned the rest of my deposit that week. So, in my case the broker earned her fee. Ken

Re:Great.

[interest rates]

This is really a meaningless settlement that prohibits MLSs from blocking the use of their listings on VOWs (Virtual Office Websites) which are these days rarely used. The fat lady already sang in practice a year or two back and Trulias and ZipRealtys of the world have been aggregating listings and selling customers back to realtors. The most noteable part is the gobs of money NAR wasted on this.

Re:Won't change a thing

[Anonymous Coward]

eschewing my bonuses and karma and posting anonymously.

i'm in the real estate industry - on the ASP side. at this point, agents and brokers are desperate. they'll deal with anyone that can get a listing, just to sell a home. 3%, 6%, hell, any % at this point.

when the real estate industry is down, mine is up. they may talk tough, but they'll deal with anyone at this point to make a deal.

sorry, welcome to the new market economy.