Another state eliminates consumer choice
The decision of the Michigan State Senate to pass the DOJ opposed bill effectively removes the opportunity for home sellers to take advantage of low cost real estate alternatives. The new bill mandates licensees who enter into service agreements with clients must provide certain services for that client, including acceptance and delivery of offers and counteroffers; assistance in developing, communicating, negotiating and presenting offers, counter-offers and related documents or notices; and furnishing or causing to be furnished a complete and detailed closing statement.
How can laws be passed that stifle competition? The notion that these limited service laws are created out of concern for consumers is absolutely ludicrous. Even though proponents of these minimum service laws maintain that the laws remain neutral with respect to alternative models, that just is not true. The laws increase both the responsibility and liability of the listing broker forcing a change in the existing structure and business model of limited service brokerages. These brokerages include flat fee MLS companies and other discount brokers. Consumers should be empowered with choice and these laws do the opposite. These laws will most likely lead to an increase in fees associated with the home sale.
Enough just cannot be said about how outrageous these laws are!
See Also
The future of the real estate industry
Is there an easy answer to the question about where the real estate industry is headed? It doesn’t seem that way at this point. With the anti-competitive legal battles continuing between the DOJ and the National Association of Realtors (NAR), it’s hard to determine exactly what the future may hold. Although, it seems NAR is not going to lie down and allow flat fee MLS and discount brokers to have the same effect on their industry as discounters had on the stock brokerage and travel industries. But, lucky for discount brokers, it seems this is a double edged sword for NAR, as the harder they fight the more press they draw to alternative listing models, the outrageous commission structure that has been in place forever, and "fixing" that seems to take place in real estate. Isn’t weird that, theoretically, an agent is doing the same work for a $100,000 listing as they are for a $500,000 listing but will be compensated five fold for the latter? As flat fee MLS companies and discount brokerages continue to assume a larger market share, one must wonder if NAR is fighting in vain to prevent change. A homeowner should be afforded the opportunity to decide what services are needed in order to sell the home, not obligated to sacrifice 6 percent for a bundle of unwanted services. It is no secret that the exposure created through an MLS listing cannot be attained as a for sale by owner, so why not allow consumers to utilize a real estate professional who is willing to unbundle the services and offer them on an a la carte basis? To me it’s simple, NAR is attempting to eliminate competition and it is up to consumers to voice their opinion and concerns. Don’t get stuck without a choice!
