Is the MLS antitrust-complaint?

#1 critical debate in the US residential #realestate market right now.

Is the ability to make blanket offers of Buyer Agent Commissions #BAC amounts via #MLS antitrust-complaint?

Strictly speaking, yes, absolutely, it is.

By itself, BAC is not #anticompetitive, but the practice is prone to abuse by means of #falseadvertising and broker-to-broker #collusion.

The U.S. Department of Justice should continue to fight state #rebatebans, it should continue to dispel notions that “buyer agents work for free,” it should stop brokers from operating networks of “partner agents,” it should prosecute #pricefixing of Realtor commissions via shell brokers, it should help Consumer Financial Protection Bureau to enforce #RESPA, it should prosecute false advertising of real estate services.

However, it should stop all attempts to outlaw the BAC. Here is why:

(1) Buyers pay all closing costs and the costs of commissions.

(2) In 40 US states and Washington DC, the buyer rebates are legal.

(3) Coupled commissions structure allows the buyer to roll the cost of the #buyeragent real estate services into the total #mortgage amount approved by the lender.

(4) Without the BAC structure, there is no MLS. If there is no MLS, listing agents will share listings internally more often, will utilize pocket listings more often, and will take advantage of unrepresented buyers more often.

(5) In a competitive environment, free from explicit broker-to-broker collusion, free from kickbacks, free from false advertisement notions, free from price fixing, and free from consumer allocation, new models can challenge #statusquo with superior #UX

(6) This same competitive and transparent environment organically develops more #techenabled #savings agents like Door.com and Homie and fewer consumer brokering #scams like Opendoor and HomeLight

(7) In a #transparent real estate services market, consumers save $15 billion annually via #OpenMarketplace, receive much higher quality services coupled with an open #MLSaggregation, are able to get new forms of benefits of transparent #preMLS systems, such as that currently under development by Selling Later startup.

#Antitrustlaw should be used to prevent #collusion, not prevent the housing markets from functioning.

The National Association of REALTORS® has already implemented (3) out of (4) main conditions outlined in the original settlement. Simply include the 5th element I had asked for into the final agreement, and close this investigation.

#Kickbacks and #rebatebans are two major critical elements that prevent open and honest #competition between #Realtors. The MLS is not the enemy of open competition.

If and only if, #antitrust laws, #fairhousing laws, #fairadvertising laws, and #fairlisting policies are all fully enforced, the MLS and the BAC structure are both perfectly legal.

Author: Litesand

Antitrust, real estate, e-commerce, fintech, proptech, bigtech

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