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."

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