May 31, 2008
DOJ and NAR Reach Antitrust Settlement
The Department of Justice (DOJ) and National Association of Realtors (NAR) settled an ongoing dispute Tuesday over competition and usage of the Multiple Listing Service (MLS). This can only be viewed as positive news for online discount brokers such as Redfin and ZipRealty.
The DOJ says this “levels the playing field” by providing these discount brokers with full access to the long coveted MLS, and that eventually hefty sales commissions will come down.
The NAR claims it is a “win-win” for the industry overall and also noted that they admit to no wrongdoing or paid any fines or damages related to this settlement. General counsel Laurie Janik stated:
“The settlement would have no real impact on home buyers or sellers. I don’t think they’ll see anything different. This lawsuit never had anything to do with commission rates, or discount brokerages. This was a five-year education of the Department of Justice, unfortunately, and the real estate industry had to pay for that education.”
Norman Hawker, a business professor at Western Michigan University, predicts that sales commissions will ultimately be reduced by 25 to 50% as a result of this settlement.
Wouldn’t that be nice.
Gene said:
If sales commissions come down 25-50%, then what will Redfin refund? There won’t be enough money left to pay any Buyers agent, let alone refund any money to the Buyer. If that happens, what happens to Redfin?
June 1, 2008 9:08 AM
Michelle said:
In the SF bay area Redfin seems to already have MLS data but in some other areas of the country I know NAR is trying to block it from Redfin and MLS-2 etc. That comment from NAR is typical real estate speak. The fact is commissions ARE coming down, but they are “refunded” which implies to everybody but NAR that 6% is going the way of the dinosaur.
I don’t know where I’d be without Redfin or Zillow etc. The only real remaining issue for the online RE sites is the blacklisting. But that will be broken soon. This NAR settlement is the kind of thing the dept of justice should be working on as opposed to the steroid mess.
June 1, 2008 9:32 AM
Parag said:
“If sales commissions come down 25-50%, then what will Redfin refund? There won’t be enough money left to pay any Buyers agent, let alone refund any money to the Buyer. If that happens, what happens to Redfin?”
Some Real Estae agents will drop out, some will offer tiered service, amount of refunds may well come down. The fact is all of these situations are good for consumers.
June 1, 2008 5:13 PM
david.g said:
I have noticed that occasionally Redfin and/or Zip do not have a listing that the other site (or the MLS) does have listed. I am not sure why sometimes, but they both usually have what is on the MLS.
Agreed - reduced commissions of any kind are great for consumers, and that is on top of a great service menu that Redfin already uses.
I have used Zip for my previous 2 purchases (but not the sell side - did that FSBO) and it was nice at the time, but their rebate is paltry compared to the 2/3 refund by Redfin, which I plan to use when I get back into this market.
Thanks for your comments.
June 1, 2008 6:02 PM