With apologies to Yogi Berra, it was déjà vu all over again June 19 when the Consumer Federation of America called a news conference to release a little report called “The Brokerage Cartel.”
The title rang a bell.
The real estate business is “the last functioning cartel in America” the head of the CFA said in a report released in …1991. Fifteen years ago CFA’s Steve Brobeck had five recommendations that would “dramatically increase competition.”
First, he recommended that agents should be required to disclose that they represent the interest of the seller. Agency disclosure is now the law in virtually every state.
Second, “buyers, for a reasonable fee, should be allowed direct access to multiple-listing services so they could contact sellers’ agents directly.” Third was to eliminate the display of commissions on the MLS because Brobeck contended they influenced whether or not buyers’ agents would show their clients certain listings.
The industry’s investment in Internet has made both those recommendations obsolete. Consumers can see almost all the properties for sale in America from their desktops for free as a result of the massive investment the industry has made in the Internet, including NAR’s policies making listings available for display on competing brokers’ Web sites. And buyers can ask their agents to show them any house they want to see. Whether or not commissions are displayed on the MLS no longer has any bearing on whether a buyer can find a property on the Internet. Three out of four homebuyers use the Internet today.
Brobeck also wanted to require buyers and sellers to contract separately for the services of an agent. In the past fifteen years, buyer brokerage has become the fastest growing specialty in real estate. Eighty-six percent of all buyers of existing homes now use an agent. Problem solved.
Number five? “Home buyers and sellers must increase their understanding of the value of these services, the necessity of comparison shopping and their ability to negotiate with agents or to act as their own agents. Only then will residential real estate markets become truly competitive.”
No argument that there is work to be done. Seventy-four percent of sellers and 64 percent of buyers still talk to only one professional before making a decision.
Few industries can boast such dramatic change in fifteen years. It’s hard to understand why Brobeck would again use the word “cartel” to describe an industry that’s done everything he advocated. Either Brobeck’s recommendations were way off base in the first place or perhaps it’s easier to cut and paste old rhetoric to dress up a whole new set of recommendations in hopes that no one will hold him accountable for acknowledging the tremendous progress that has been achieved.
It’s June, and thoughts turn to...second homes! 
