In October, eight jurors in a Missouri court were led to believe that the way real estate agents have long been compensated amounts to a conspiracy to violate antitrust laws. The jury’s verdict rests on the shakiest of legal grounds but has led to misrepresentations about the real estate industry and what its future holds.
Plaintiffs’ attorneys, who stand to profit richly should the verdict stand, have filed new lawsuits claiming that our profession involves a concerted effort to overcharge Americans looking to buy and sell their homes. This could not be further from the truth.
The compensation structure plaintiffs’ lawyers would like to dismantle – one in which listing brokers offer compensation to buyer brokers for finding a buyer – promotes consumer choice, encourages market competition and boosts access to homeownership. On a multiple listing service (MLS) platform, sellers can have their home seen by more buyers, ensure they receive the best offer and sell it for the best price.
Buyers, whether experienced purchasers or first-time owners, benefit from professional representation as well. For lower- and middle-income buyers in particular, saving for a down payment can be difficult, and the daunting prospect of buying a house will, for many, be the most significant and complex purchase of their lives.
For these buyers, adding broker compensation on top of closing costs would push the dream of homeownership even further out of reach. This especially would be true…
