Realtors may be preparing for turf war

Last updated on May 13th, 2019 at 02:39 pm

The real estate brokerage industry has prospered in recent years due to the flourishing housing market. While prices of properties have increased at healthy rate of return – so have real estate commissions. Depending on whom you may ask, the typical selling brokerage charges about 5 to 6 percent (or more) for full-service real estate sales.

With the Internet, the advent of public Web sites threatens to level the playing field, putting cheaper selling alternatives on a more even par with traditional sales models … and this is of great concern to those entrenched in the customary methods of real estate sales and services.

Public Web sites sponsored by Realtor MLS groups such as the national and local sites such as have become extremely popular with consumers, offering do-it-yourself home sellers a vehicle to gain greater exposure. Those looking to buy a home now have a way to cut out the “middlemen” who used to control the dissemination of property sales data before the Internet placed the housing inventory online.

At the core of this revolution, an effort may be under way to put the genie back into the bottle. Earlier this year, Ohio Realtors took the Cincinnati “public MLS” Web site offline and replaced it with a directory of participating brokerage sites. The trend, we are told, is to end these public Web sites in favor of broker-to-broker sharing of the property listing database.

The danger of this policy change can be seen when larger full-service brokers refuse to display the property listings of smaller discount competitors. Without a clear disclosure, how is the consumer to know they may not be seeing 100 percent of the available properties on a broker’s Web site?

As of July 1, 2006, brokers who perform “limited service” by waiving some or all of the negotiation duties required under Wisconsin statutes must present a waiver to consumers, plus a lengthy disclosure which appears to favor a questionable business method called “designated agency.” Clients of traditional brokers will hear all about the wonders of designated agency (where the brokerage purports to negotiate for the best interests of the buyer AND the seller, within the same transaction – something no law firm would consider).

Currently, the only thing standing between those brokers and the public interest is the U.S. Department of Justice. While this writer is typically opposed to federal interference in local matters of the free market – it is appropriate in an industry which has a stranglehold on the local political lobby.

While I look forward to a marketplace of choices, alternatives and disclosures, behind closed doors there may be a plan to implement a marketplace where the consumer is directed to only the listings of certain brokers, and the consumer may be “represented” by the selling broker, supposedly without any conflict of interest.

Can we believe our statutes are written in the public’s interest? Washington … are you listening?

Corey Scholtka is a founding member of the American Real Estate Broker Alliance ( and is a limited service Realtor in Delafield.

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