Buyer’s Choice Realty blog

State-Mandated Minimum Service Laws – What about the Buyer?  There has been a lot of hoopla over recent months about setting minimum listing service standards in real estate practices across the country.  The Department of Justice has decided to challenge these laws indicating that they are a restraint of trade for new business models.   It seems the Federal Trade Commission agrees.  Specifically, these laws have forced some flat-fee listing companies out of business because the whole concept of a flat fee is typically minimal service for a minimal fee. The industry seemed to say,  ”You can accept minimal compensation but you can’t give minimal service”.   

The DOJ has stated that sellers should have the right to determine what level of service they want to engage and pay for.  The industry says “No, because sellers need to be protectedâ€?.  The real estate industry maintains that sellers don’t realize the intricacies of a real estate transaction and, therefore, should not be allowed to list a property for a minimal fee unless the listing firm guarantees a level of service that is financially impractical for the flat-fee listing firm’s existence.  It’s an interesting debate, but one particular focus has been missing.  The real estate industry seems very concerned about sellers not getting full service in a real estate transaction, but what about the buyer? 

Having represented home buyers exclusively since 1990, I am appalled that once more the industry has taken a solely seller-focused approach.  For decades the industry has frowned upon the buyer agency movement of advocacy for the home buyer.   And, for the most part, buyers were left to fend for themselves against two real estate agencies that both represented the seller in a home sale.  But who worried about protection and a full-service approach for the buying side?  No one except buyer agencies that took a beating from the industry for years.  What about the intricacies on the buying side?   What about the buyer? 

A case could be made for the fact that buyers are more at risk in a real estate transaction than a seller.  Why should we force full-service models for sellers and still leave buyer to fend for themselves? The industry support of minimum service laws show us that it is the listing side of a transaction that is our primary concern.  And what real estate agent hasn’t heard the old adage “You’ve got to list to last�?  Our focus has always been on getting the listing. 

I prefer to think that good service is the key to good business.  I doubt that the minimum service standard movement for home sellers will go very far.  Some sellers are proving every day that they can pay less for less service and successfully sell their homes.  So perhaps all the concern for sellers has been misplaced. 

Why haven’t these new state laws mentioned buyers?  They seem to have been totally overlooked.   If sellers need all this “protection� and setting of standards why don’t buyers?  You be the judge:  Are we really concerned about service for sellers  or do we just want to preserve the higher listing fees for full service that we’ve become accustomed to?  If we’re really genuine about concern for good service, what about the buyers?