Out to Destroy Residential Real Estate Sales as we know it…

“We’ve said it before and we’ll say it again…The DOJ wants to remove the Offer of Compensation from the MLS Model Rules, and drive commissions down.”

The DOJ has wanted to cripple organized residential real estate for decades…with the help of the FTC and the Consumer Federation of America.

Remember, residential real estate sales is an industry with contingency based fee structure…no sale, no pay…attorneys who work on contingency often charge in excess of 25%.
Throw on top of that the fact most employed in this Industry are independent contractors, with no minimum wage, and no benefits.

If I were a betting man, I would bet that it will not stop short of eliminating the Broker Compensation Clause from the NAR MLS Model Rules.

The results of such a move are beyond the comprehension of the DOJ.

“Federal antitrust enforcers are poised to decide whether to pursue their own case after a years-long investigation, according to a person familiar with the issue. The Justice Department is focused on the real estate commission-sharing system that typically puts homesellers on the hook for a 5% to 6% cut of the sale, split between their agent and the buyer’s agent.”

Pre 1996, the MLS was an Offer of Subagency, and all of the Users of MLS (just about everyone in residential real estate sales) represented the seller as a fiduciary. Buyers were unrepresented and did not know this fact as it was not disclosed.

Agency disclosure laws in the late 1980s brought a change in MLS by making it an Offer of Compensation instead of an Offer of Subagency. This was a positive change for buyers and the industry.
What will residential real estate sales look like and what will be the industry “compensation vehicle” be post litigation.

There are three major civil suits, and the DOJ vs NAR Antitrust case, and potential damages in the billions of dollars (Billion).


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