Below is an excerpt from a recent Houston Chronicle article titled “Class-action case could upend residential real estate brokerage business” – Read the full article here.
Others have found success in circumventing the multiple listing services altogether. When Houston resident Larry Lanclos was looking to sell his home, he searched for a way around paying the buyer’s fee. But Lanclos’ real estate agent friends who offered to list his home at cost said he would have to pay 3 percent to the buyer’s agent, even if he found a buyer himself.
“It kind of gets into a Catch-22,” he said. “You’re having to give money to someone who really didn’t do anything — they’re just called in by the Realtor who is representing you.”
He ended up going with REX, a discount brokerage charging only 2 percent to sell a home. The price is made possible by not paying the buyer’s agent — buyers have the option of having a salaried REX agent guide them through the transaction for free or paying for an outside agent themselves. But not making the buyer’s agent an offer also means that the listing cannot be advertised on multiple listing services, such as HAR.com and Realtor.com.
Instead, REX’s homes can only be advertised directly to customers or on websites such as Zillow and Trulia, which only receive part of their listings from multiple listing services. Jonathan Friedland, the company’s head of communications, said such restrictions are worth it in order to offer lower fees.
“If you’re in the (Multiple Listing Service) you’re bound to live within these rules. That’s what makes the MLS so problematic for anyone who is really trying to innovate in the industry,” he said. “If you don’t abide by some of these rules, you are kicked out.”
Kara Biggs found Lanclos’ home through Zillow and closed four weeks after it went on the market.