I
am
repeating
myself
but
bear
with
me.
No
seller
must
use
a
real
estate
agent
to
sell
a
home
—
ever. 
In
fact,
considering
inter-family
and
estate
transfers
as
well
as
for-sale-by-owners,
as
many
as
20%
of
all
transactions
may
not
include
the
use
of
an
agent. Consumers
are
free
to
sell
or
buy
a
home
without
an
agent
—
and
consumers
know
this.

No
buyer
must
use
a
real
estate
agent
—
ever. They
may
buy
directly
from
a
seller,
whether
that
seller
is
represented
by
an
agent
or
not. A
meaningful
percentage
of
buyers
did
not
hire
a
real
estate
agent
when
they
bought
their
last
home. Consumers
face
no
regulatory
barriers
to
purchasing
without
an
agent.

Commissions
have
always
been
negotiable,
and
consumers
know
this. 

RealTrends
+
Harris
Insights‘
studies
from
2002,
2005,
2006,
2011,
2014,
and
2019
all
show
that
consumers
know
that

commissions
are
negotiable. Certainly,
there
are
some
that
don’t. 
Whether
this
is
because
they
have
not
researched
this
capability
or
that
they
choose
not
to
negotiate
is
unknown. 

Another
known
fact
is
that
at
least
one
firm,

Redfin,
which
gets
over
50
million
unique
visitors
on
its
website
each
month
and
offers
discounted
listing
and
lower-cost
buy-side
commissions,
is
available
in
most
of
the
metropolitan
markets
in
the
United
States.
Despite
that,
it
has
less
than
1%
market
share
of
all
transactions. 

Preceding

Redfin
over
the
last
50
years
have
been
consumer

discount
firms

Help-U-Sell,
Assist2Sell,
and

ZipRealty,
among
others.
At
one
time,
the
former
two
had
over
1,500
retail
locations
in
the
United
States
combined.
ZipRealty
closed
nearly
30,000
transactions
at
its
peak. Consumers
have
had
lots
of
choices
in
brokerage
services,
including
those
with
lower
costs,
but
they
have
chosen
not
to
use
them
in
any
meaningful
way. 

Why
aren’t
consumers
using
discount
firms?

While
we
don’t
know
for
sure
why
discount
brokerage
firms
aren’t
gaining
traction,
perhaps
it
is
because
consumers
enjoy
the
benefits
of
using
their
own
agent,
one
that
they
know
and
trust,
and
where
the
cost
is
a
secondary
consideration.

Consumers
who
didn’t
know
they
could
get
discounts
were
either
living
in
a
cave
or
were
lazy
or
afraid
to
ask
for
a
lower
commission.
The
ability
to
lower
one’s
commission
costs,
including
to
zero,
was
abundantly
available
information
to
a
huge
portion
of
consumers. HousingWire’s
own
data
shows
that

commission
rates
have
been
falling
consistently
over
the
past
30
years,
primarily
due
to
consumers
negotiating
for
a
lower
rate
or
a
rebate.

What
about
the
MLSs?

Some
say
the
MLS
enables
U.S.
real
estate
agents
to
have

higher
commission
rates
than
in
other
countries. There
is
some
truth
to
this
position. What
it
leaves
out
is
the
value
that
MLSs
bring
to
the
participants
in
the
market,
both
real
estate
professionals
and
consumers. Those
who
point
to
this
conclusion
fail
to
mention
the
role
the
MLS
plays
in
the
U.S.
(and
Canadian
market)
in
assuring
a
high
level
of
accuracy
in
data
about
the
homes
that
are
for
sale,
the
sales
prices
of
homes
that
are
sold,
and
the
comparable
data
for
price
comparisons. Among
other
benefits
are
regulations
and
processes
to
make
the
market
efficient
and
fair
that
are
promulgated
and
enforced
by
the
MLS.

Take
the
MLS
out
of
the
picture
and
you
have
the

portals,
none
of
which
are
geared
to
police
the
accuracy
of
the
data
provided
by
sellers. None
of
which
are
geared
to
police
agent
conduct
in
the
market. Without
the
MLS,
real
estate
professionals
and
consumers
would
be
at
the
mercy
of
three
to
four
large,
national
portals
whose
business
models
aren’t
geared
to
do
any
of
the
messy
oversight
of
the
market
—
nor
would
they
want
the
liability
to
do
so. Just
look
at

CoStar’s
dominance
over
the
commercial
brokerage
market. Now,
picture
them
together
with

Zillow
and

Realtor.com. It’s
not
a
pretty
sight. 

Lower
commissions
don’t
account
for
the
real
value
of
the
MLSs

Those
who
say
that
other
countries
who
lack
MLSs
have
lower
commissions
fail
to
account
for
the
real
value
provided
by
MLS. Those
who
point
to
these
other
countries
also
don’t
point
out
that
the
lack
of
cooperation
between
agents
and
brokerages
means
that,
apart
from
the
real
estate
portals
in
these
countries,
consumers
are
left
to
their
own
devices
to
find
out
what
the
available
choices
may
be
in
homes
for
sale.
They
may
be
forced
to
deal
with
multiple
agents/brokerage
firms
to
find
the
right
home
or
to
determine
the
right
price
for
the
sale
of
their
own
home. The
argument
about
other
countries’
commission
rates
aren’t
as
high
as
in
the
U.S.
fails
to
take
any
of
this
into
account.

My
experiences
as
an
expert
witness

Having
been
an
industry
expert
witness
in
several
restraint
of
trade
or
price-fixing
cases,
I
can
say
that
between
the
U.S.
Department
of
Justice,
the
U.S.
Federal
Trade
Commission,
and
a
multitude
of
private
litigants,
there
is
a
total
lack
of
knowledge
of
how
the
market
works,
the
freedom
of
consumers
to
choose
to
use
an
agent
or
not
or
what
to
pay
them
and
the
value
of
the
Realtor
marketplace.

The
plaintiffs
I
have
dealt
with,
their
economics
experts,
and
the
Federal
agencies,
just
see
the
commission
rate
and
can’t
believe
that
consumers
would
choose
to
use
such
a
system
absent
some
coercion
from
the
industry. 

Trust
me
when
I
say
they
have
all
been
frustrated,
thus
far,
in
their
ability
to
enforce
a
new
regime
on
the
industry
that
will
somehow
lower
commission
costs
and
not
negatively
impact
the
services
provided
or
the
functioning
of
the
market. The
repeated
challenges
from
all
three
forms
of
litigants
show
that
what
they
seek,
they
will
not
get. Even
the
settlements
now
being
proposed
by
the
current
litigants
won’t
accomplish
this.

Even
with
all
the
technology
and
the
huge
increase
in
information
about
the
U.S.
housing
market
that
has
become
available
in
the
last
25
years,
the
use
of
agents
by
consumers
has
risen,
not
decreased. 

Even
with
technology
that
allows
consumers
to
transact
far
easier
than
ever
before
with
online
forms
and
digital
signatures,
the
use
of
agents
has
risen
to
its
highest
level
in
history. 

Do
these
litigants
think
all
consumers
are
dumb?

What
do
the
litigants
really
want?

In
my
opinion,
the
current
litigants
don’t
care
about
how
the
outcome
of
their
case
may
impact
the
market. They
don’t
seem
to
care
if
their
actions
cause
a
huge
increase
in
unrepresented
first-time
homebuyers. I
will
leave
it
to
the
reader
as
to
what
they
think
these
litigants
care
to
get
out
of
their
actions. Just
look
at
the
proposed
settlements
to
get
a
clearer
picture.

The
report
by

Keefe,
Bruyette
&
Woods

report,
“Commission
Impossible:
Will
Litigation
Reshape
the
Housing
Market?”
will
turn
out
to
be
wildly
inaccurate
when
the
dust
settles. And
the

Editorial
Board
of

The
Wall
Street
Journal,
who
I
personally
hold
in
high
esteem,
failed
miserably
in
their
review
and
comment
on
this
litigation.

It
has
been
my
own
observation
that
whenever
the
Federal
government
seeks
to
control
an
industry
through
litigation
or
regulation,
it
only
exacerbates
consolidation,
complexity,
and
costs. Whether
this
current
wave
of
litigants,
supported
by
the
Federal
agencies
in
spirit
if
not
in
fact,
will
prevail
we
will
wait
to
see.

Steve
Murray
is
the
founder
and
partner
of
RTC
Consulting
and
a
senior
advisor
to
HW
Media.

This
column
does
not
necessarily
reflect
the
opinion
of
HousingWire’s
editorial
department
and
its
owners.

To
contact
the
author
of
this
story:
Steve
Murray
at


[email protected]

To
contact
the
editor
responsible
for
this
story:
Tracey
Velt
at


[email protected]