Flat Fee MLS

Limited-service brokers unaffected

As a number of states recently passed minimum requirements laws for real estate agency, Tennessee and Virginia have passed legislation establishing requirements for full service licensees allowing exemptions for limited service providers. Thank goodness someone has gotten it right! The Department of Justice has commended the states for their preservation of consumer choice. Why has it been so hard for state senate to differentiate between the services being offered by a full service agent and a limited service broker and passing legislation that still promotes competition and choice? Minimum service requirements should be passed to ensure full service agents are providing a service that warrants the 3 percent usually received on the listing side of the transaction. Protecting the consumer means making sure that home sellers enlisting the services of a full service agent are getting all the services they deserve for the thousands of dollars they are paying. With a fee-for-service, or flat fee MLS broker, consumers know exactly what they are paying for, essentially there are no intangibles.

See Also

• Virginia, Tennessee pass real estate service laws
  Both states allow limited-service business models

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Alternative Brokerage Models stand to gain from proposed legislation

Throughout the past several years, "limited service" legislation has generally meant "bad news" for consumers and limited service brokers who seek to offer low cost alternatives to the traditional brokerage model. Now the Virginia Association of Realtors is making a legislative proposal that may actually benefit consumers and limited service brokerage companies alike.

Unlike traditional brokerage companies charging relatively large real estate commissions for a full range of services, limited service brokers offer a menu of services from which to choose and provide consumers with a cost effective means of retaining control of their property sale while still benefiting from the important tools that real estate agents possess, such as listing in the Mulitple Listing Service.

Current real estate law in Virginia requires agents to perform a set of minimum services in order to engage in an agency relationship. The new law would create a new class of agency relationship called "limited service agency" which would allow brokers to provide fewer services, generally for a reduced rate. According to Scott Brunner, CEO for the Virginia Association of Realtors, the proposed legislation "absolutely legitimizes the discount brokerage model that has taken such flack in other states."

See Also

• DOJ blasts another real estate rule on anticompetitive charges
  New Mexico considers changes to establish minimum services

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