By Mike Bodeen · 22 April 2024
A Personal History
Recently we’ve begun to discuss the biggest news in the real estate industry in over 50 years and attempting to figure out what it all practically means to the residential real estate buyer, seller, real estate agents, their respective companies not to mention the big daddy of them all, the National Association of Realtors (NAR).
We are of course referring to the lawsuit settlement known as Sitzer-Burnett vs NAR (https://www.wsj.com/real-estate/realtors-settlement-change-buy-sell-homes-da45eb23?mod=djem10point in which NAR settled the lawsuit for $418,000,000 but more importantly the soon-to-be-formation of new regs that will go into effect later this summer, assuming the decision becomes codified, which most legal beagles believe it will.
This will be a game changer in the day-to-day practice of the residential real estate agent’s representation of their client, especially for buyers and their agents.
Some “in the trenches” history would help to give us context. I offer mine.
In July of 1976 I passed a written real estate exam to become licensed to sell real estate in the state of California. (Incidentally, the simplicity of that entrance exam has not changed in a half century, at least in Arizona)
I immediately went to work for my former father-in-law who had a small cabinny (don’t bother looking that word up, it ain’t there – it’s a Bodeen original;-) real estate office across the street from Donner Lake (Truckee, CA). The picture below was my daily view from my Donner Lake, CA., office.
He (Dan) and I were the only agents in his office. There were 4 offices at Donner Lake. The two main offices were Donner Lake Realty, and our office, Donner Sierra Realty.
When I first began to sell, each office had their own listings. If a buyer wanted to look at a home we had listed, they called us from a small 2″ x 2″ ad in the local rag, or dropped by the office and we would show it to them. There was no co-operation between offices to show each other’s listings. If we drove a buyer by a home listed by our competitor, they would say, “How much is that home?” And we would say, “Hmm, not sure. You’ll need to call that office.” We might also add something like, “Yea, I heard it’s overpriced!”
Mike, did you lie? Well, it depends on how you define “lie.” (My only defense was that was my pre-Jesus days😊)
Back then, commissions were 6% to 7%. The average price home/cabin that we sold in Truckee in the mid 70’s was $25,000 to $30,000. Lakefronts started in the $50,000 range. Most listings were older cabins suitable for summer use only.
Right at that time, the Multiple Listing Service (MLS) began taking hold in Truckee. Most of the offices in the downtown Truckee area had begun utilizing the MLS and co-operating with all other agents in the MLS. Agents in Truckee who listed a home in Donner Lake (our territory) were putting their homes on the MLS which finally put pressure on our greedy Donner Lake offices to do likewise. We would now be “required” to split the commission we received if that buyer’s agent sold it.
The formation of the Multiple Listing Service system was the biggest innovation ever in American real estate. The spirit of co-operation was a win-win for buyers and sellers. Buyers could now see ALL homes listed by MLS participants (except for those nasty pocket listings), and sellers immediately, vastly multiplied the amount of buyers viewing their homes.
Now 50 years later, the next biggest thing in real estate (apart from the internet) has arrived and will return or change residential real estate practices forever.
Continued Next Week…