MLS System Fosters a Spirit of Collaboration and Civility

The Wall Street Journal calls it “a case of conspiracy in real estate” A federal jury in Missouri on Oct. 31 found that the National Association of Realtors® and other brokerages were liable for artificially inflating commissions and awarded plaintiffs $1.8 billion in damages.

The center of the lawsuit focuses on a seller agreeing to pay a commission to a listing agent and the listing agent splitting that commission with a buyer’s agent. Is there a problem with this method?

Managing Editor

Dave Anderton

Publisher Mills Publishing, Inc. www.millspub.com

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Dan Miller

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Jackie Medina

Graphic Design

Ken Magleby

Patrick Witmer

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Cynthia Bell Snow

“There is nothing wrong about a listing broker offering to share a portion of that commission with the buyer’s broker in a transparent manner at an amount both parties agree upon,” according to Curtis Bullock, CEO of the Salt Lake Board of Realtors®. “Some critics argue that this system creates an inherent conflict because the seller and buyer have differing interests. While I agree there is some transactional conflict – i.e., seller wants the most money possible and the buyer wants to pay the least amount possible – there is one overarching common goal all parties share: that is to successfully close the transaction.”

Of course, NAR is appealing the verdict and the final outcome could be years away. If the lawsuit ultimately prevails, home buyers could be left footing upfront costs of hiring an agent to represent them. It would likely result in underrepresentation of buyers, while sellers would continue to hire agents.

Sales Staff

Paula Bell

Dan Miller

It’s important to remember that Realtors® may collect any commission amount they choose. “There are no set fees. Never have been, never will be contrary to the misconceptions by the plaintiffs,” Bullock said. “There are several business models for brokerages. Some charge flat-rate fees, set commissions, or discounted commissions. Individual brokerages can select what fees they wish to charge. That does not change.”

Salt Lake Board: (801) 542-8840 e-mail: dave@saltlakeboard.com

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The Salt Lake REALTOR is the monthly magazine of the Salt Lake Board of REALTORS . Opinions expressed by writers and persons quoted in articles are their own and do not necessarily reflect positions of the Salt Lake Board of REALTORS®

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REALTOR is a registered mark which identifies a professional in real estate who subscribes to a strict Code of Ethics as a member of the NATIONAL ASSOCIATION OF REALTORS

At the end of the day, no one is forced to hire a Realtor®. Many people sell homes on their own. Some use KSL.com, while others turn to ForSaleByOwner.com. Critics argue that the MLS system and Realtors® represent a cartel. On the contrary, the MLS is a brilliant system of putting fierce competitors together to pursue a common goal of buying and selling a home. It has incentivized competitors to work with each other and do it in the spirit of collaboration and civility for decades. Who wins? The consumer.