After years of song and dance, the DOJ reached a settlement with the NAR that seems to have achieved absolutely nothing — except the waste of a bunch of tax and dues money. At least that’s what you would think if you read nothing but the NAR’s spin. In fact, the NAR lost the major point of contention, the attested right of brokers to withhold listings from Virtual Office Websites (VOWs). From eWeek.com:
The Department of Justice said May 27 it has reached a settlement in its long-running legal dispute with the National Association of Realtors. Under the terms of the settlement, the Realtors will enact a new policy that guarantees Internet-based brokerage companies will not be treated differently than traditional brokers.
Under the new policy, Realtor-affiliated brokers participating in multiple listing services will be prohibited from withholding their listings from brokers who use virtual office websites, generally known as VOWs. The Realtors agreed to a 10-year settlement to ensure the group continues to abide by the requirements of the settlement.
“Today’s settlement prevents traditional brokers from deliberately impeding competition,” Deborah A. Garza, deputy assistant attorney general of the DOJ’s Antitrust Division, said in a statement. “When there is unfettered competition from brokers with innovative and efficient approaches to the residential real estate market, consumers are likely to receive better services and pay lower commission rates.”
The Realtors also agreed to adopt antitrust compliance training programs that will instruct local associations of about the antitrust laws generally and about the requirements of the proposed settlement. The National Association of Realtors is a trade association of more than 1.2 million residential real estate members who operate in local real estate markets nationwide.
That sounds like something, but it ain’t. For one thing, the NAR gets to define what a VOW is. From its own press release:
The terms of the proposed final order validate NAR’s position – that MLS members must be actively engaged in real estate brokerage by actually helping people buy or sell homes. This will ensure that MLSs are used for what they were originally intended to do – to help real estate professionals find buyers for people who want to sell their homes.
But, even so: Who cares?
No one uses VOWs by now, and it’s small potatoes if they do. Meanwhile, occupational licensing creates a cartel. Broker licensing creates a sinecure for brokers. Withholding tax exclusion turns brokerages into dairies for milking gullible agents. Sellers — via their listing agents — paying the buyer’s agent’s commission makes a mockery of buyer’s agency and enshrines sub-agency behind a camouflage of tattered lace. Persistent pressure by branches of the NAR to pass anti-competitive legislation sustains artificially high price levels and outrageously low service levels. And all of this entirely ignores the nation’s psychotic monetary policy, its insane real estate-favoring tax laws and the persistent pandemic mess in the mortgage markets. The real estate industry could not possibly be any more screwed up than it is right now. But don’t worry. After years of nattering and millions of wasted dollars, the deck chairs on the Titanic have been moved! Hurray!
I expected nothing from this, and, lucky me, I got it.
Thomas Johnson forwarded the NAR’s press release to me, and he says this in email:
My take: DOJ has no interest in kicking an industry when it is down in an election year. Looks like the sellers will be paying both sides for another decade or so. We now get to see the victory dances of both sides in the media. DOJ gets to claim that VOWs have been cleaned up and the MLS’s get to keep on keeping on (who uses VOW’s, anyway?). Score one for the status quo.
I’m inclined to agree. The press release itself is indicative: It’s almost entirely about how to spin the media. No kidding.
Here’s my take: If you want to see a better real estate practice in the United States, you will have to make it better. You can’t do much about the NAR or the Fed or the DOJ, but you can do everything you can to push the bums out of this business. I hate it that my dues money goes to support people who will frustrate true competition in any way they can, but their days are numbered. The wired world of real estate belongs to us. My plan is to make it impossible for these lazy leeches to compete against me. How about you?