4 ms·

I also find the realtor system to be poorly aligned with the best interests of their clients. But ... is it a cartel? On the one hand, yes, brokering these tra

by abeppu 3y ago

I also find the realtor system to be poorly aligned with the best interests of their clients. But ... is it a cartel? On the one hand, yes, brokering these transaction is limited to a specific group. But getting into that group seems not that hard, and lots of people do it.

jedberg 3y ago
What makes it a cartel is their control over supply and demand. It's really hard to buy or sell a house without dealing with them, because inevitably one of the sides of the transactions has a contract with them, because of they way they require exclusivity.
- abeppu 3y ago
  But: - sale by owner without a realtor is a thing (at least many places?) - all you need to do to be "them" is take a test and get a license, right? I.e. if as a buyer willing to pay 6-7 figures for a home, the cost of getting that license is negligible. If you wanted to recoup the buyer agent commission, you could represent yourself and do so. Like, you also need a license (or multiple) to operate a restaurant, and it's really hard to do a prepared-meal-for-money transaction without one side of the transaction being such a license holder ... but we wouldn't in general say that restaurants are a "cartel" in virtue of this fact, because there's healthy competition.
  - jedberg 3y ago
    > sale by owner without a realtor is a thing (at least many places?) Realtors are not allowed to help you buy FSBO properties. If you have a contract with a buying agent (which most will require) then you can't buy an FSBO. So basically you have to choose -- get access to the 97% of listings that are done by Realtors, or the 3% that are FSBO (and get no help with it). You also can't buy a house listed by a Realtor without your own Realtor. That is why it is a cartel. Because the monopolize the listings and then refuse to work with anyone not in their system. And it's not that easy to get a Real Estate license. To your restaurant analogy, imagine if you could only eat in a restaurant if also owned one and had a restaurant license. It would be similar to that.
noqc 3y ago
I bet you could sign up to be a drug mule with not that much effort.
MisterTea 3y ago
> But getting into that group seems not that hard, and lots of people do it. Getting in to the bottom floor, sure. Working your way up? Not so easy. Same for any other cartel like the mafia and so on.
malfist 3y ago
The MLS system they run certainly is a cartel. There's all kinds of rules that you have to play by that prevents competition if you want to be able to read MLS data.
whimsicalism 3y ago
it’s a brokered market where the brokers collude. if it is not directly a cartel, it is very cartel resembling. NAR was taught as a model case of broker collusion in my economics classes.

by abeppu 3y ago

jedberg 3y ago

What makes it a cartel is their control over supply and demand. It's really hard to buy or sell a house without dealing with them, because inevitably one of the sides of the transactions has a contract with them, because of they way they require exclusivity.

abeppu 3y ago
But: - sale by owner without a realtor is a thing (at least many places?) - all you need to do to be "them" is take a test and get a license, right? I.e. if as a buyer willing to pay 6-7 figures for a home, the cost of getting that license is negligible. If you wanted to recoup the buyer agent commission, you could represent yourself and do so. Like, you also need a license (or multiple) to operate a restaurant, and it's really hard to do a prepared-meal-for-money transaction without one side of the transaction being such a license holder ... but we wouldn't in general say that restaurants are a "cartel" in virtue of this fact, because there's healthy competition.
- jedberg 3y ago
  > sale by owner without a realtor is a thing (at least many places?) Realtors are not allowed to help you buy FSBO properties. If you have a contract with a buying agent (which most will require) then you can't buy an FSBO. So basically you have to choose -- get access to the 97% of listings that are done by Realtors, or the 3% that are FSBO (and get no help with it). You also can't buy a house listed by a Realtor without your own Realtor. That is why it is a cartel. Because the monopolize the listings and then refuse to work with anyone not in their system. And it's not that easy to get a Real Estate license. To your restaurant analogy, imagine if you could only eat in a restaurant if also owned one and had a restaurant license. It would be similar to that.

noqc 3y ago

I bet you could sign up to be a drug mule with not that much effort.

MisterTea 3y ago

> But getting into that group seems not that hard, and lots of people do it. Getting in to the bottom floor, sure. Working your way up? Not so easy. Same for any other cartel like the mafia and so on.

malfist 3y ago

The MLS system they run certainly is a cartel. There's all kinds of rules that you have to play by that prevents competition if you want to be able to read MLS data.

whimsicalism 3y ago

it’s a brokered market where the brokers collude. if it is not directly a cartel, it is very cartel resembling. NAR was taught as a model case of broker collusion in my economics classes.