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With Agreement Of The Seller A Real Estate Broker May Charge A Commission

Written By: Chris - Apr• 15•21

30. See Olazabal, note 19, 74-75. Olazabal notes that the subagency regime was not a creature of state law, but the result of most MLS that allowed Denern to allocate commissions only with cooperating agents who agreed to be a sub-agent of the seller. Id. at 70. Some have argued that a sub-organ of NAR members was created to restrict access to MLS. As one study explains: MLS is a local or regional joint venture of real estate agents, usually operated by a local group of NAR-linked brokers and collecting and disseminating information about homes for sale in their respective geographic areas41.41 MLS combines information about its members` home lists into a database. , usually in electronic form. MLS then makes this data available to all brokers who are members of MLS.42 By listing information about a home in MLS, a broker can market it to a large number of potential buyers. A cooperating broker can also browse the MLS to provide a buyer with information on all the homes listed in the area that meet the buyer`s housing needs. Another question that is not resolved by workshop participants or commentators is why commission rates are relatively rigid.229 Despite the answer, it is desirable that brokers have the freedom to offer a variety of price combinations and services to attract consumers. In particular, innovators should not be discouraged by industrial policy or government regulation to offer more flexible commission rates, given the above information on the relatively limited competition between traditional brokers in terms of price size. In the next chapter, we turn to the barriers that innovators may encounter.

As explained in Chapter I, brokers must have access to MLS to be able to compete effectively. Since brokers generally set the rules for the participation of others in MLS by agreement, it is possible for a dominant group of brokers to establish MLS rules that favour them and to favour other brokers who compete in a way they do not like. Such rules are illegal when they disproportionately restrict competition308 and agencies have recently challenged MLS rules as breaches of cartels, which unduly restrict competition from brokers using alternative business models. Proponents of minimum service requirements also assert that if part of the transaction is a home seller involved in a limited service list agreement, not a traditional full service broker, cooperating brokers representing buyers may be exposed to particular risks. This reasoning generally focuses on three types of risks for the cooperating broker. 257 Proponents of these provisions argue that they protect consumers from false and misleading discounts and contribute to consumers choosing brokers on the basis of quality of service, not price.

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