‘interference with a fiduciary relationship,’ or ‘group boycott.’ If antiquated licensing law says it’s OK to share your commission with a buyer broker, that does not mean you can do it and be exonerated from violations of common law or federal antitrust law. That’s really poor advice.

“In fact, I’m currently researching how exclusive commission split offers to buyer brokers function as a group boycott against lawyers who want to enter the field. Again, the solution is so simple. Stop offering money to buyer brokers. It will encourage competition.”

CAARE recently published advice for sellers and buyers, urging sellers not to work with real estate agents that say other agents won’t show their homes unless they offer compensation up front and urging buyers not to work with agents who encourage them to skip homes that don’t make such offers.

“Why in the world should sellers put all their cards on the table about compensation or seller credits?” Gilch said.

“If sellers offer nothing, it forces buyers to make the first move to ask for a credit instead. And that leads to competition on buyer broker fees. That credit is going to be smaller if buyers negotiate a good deal with their agents.

“If the listing broker offers fixed amounts to all buyer brokers, the benefit of negotiating the buyer rep fee deteriorates. Plus, it creates the false impression to many buyers that the credit is meant for the buyer agent, not the buyer. We’re back to the same problem that existed prior to the lawsuits.”

Source: CAARE

CAARE referred to the previous system as “socialized real estate commissions.”

“It’s not about whether or not a buyer can afford a buyer agent or not,” Miller said.

“Instead, it is about whether or not a buyer gets to negotiate the fee of their own buyer agent. The current system allows buyer agents all to get paid the same regardless of their experience or skill.

“We call that socialized real estate commissions and we believe that’s wrong and harmful to consumers and causes fees to be set without the benefit of competition. That’s why buyer broker fees are nearly all the same in many parts of the country.”

CAARE is advising buyers to ask for a seller credit in the form of a flat fee, rather than a percentage of the purchase price, if they can’t afford their own agent.

“If you negotiate a fee of around 1 percent, you’ll likely save the seller about 2 percent in commissions,” CAARE said. “Plus, if your offer only includes a 1 perent seller credit and a competing buyer asks for 3 percent, your offer becomes more attractive, increasing your chances of acceptance.”

“It’s a far simpler solution that injects market forces into the fee negotiations,” Miller added. “This is the way it should have been for decades.”