 You’re not likely to see a follow-up article. After all, it’s been two years since the initial story.
It was big news then. The Wall Street Journal reported on it as did several large-city Texas papers. They claimed that Texas REALTORS® were pushing a new rule, trying to get the Texas Real Estate Commission to force all Texas consumers to hire full-service real estate agents. Homebuyers and sellers would have to pay full-price for all kinds of real estate services they didn’t even want. Sellers were quoted in the articles about how this would have added $12,000 (or $7,000 or $18,000, depending on the seller) to the cost of their real estate sales.
There was only one problem with that story. It wasn’t true.
You see, the journalists talked to a few real estate agents and homeowners and “uncovered” this terrible rule that was going to force all real estate agents to provide full service. From what I could tell by reading the articles, the reporters never bothered to read the proposed rule. If they had, they would have noticed an absence of references to full service. No long list of mandatory services, either. Not a single mention of requiring specific levels of fees or commissions. No, the rule spelled out the minimum service a real estate broker must provide his client. And believe me, it was a bare-bones minimum.
In essence, the rule said that a broker must answer his client’s questions and must inform the client “if the broker receives material information related to a transaction to list, buy, sell or lease the party’s real estate, including the receipt of an offer by the broker.” That’s about it.
The interesting thing is that most real estate brokers thought they were already obligated to do these things. Existing Texas law at the time required brokers to negotiate the best possible deal for their clients. I’m not sure how you negotiate the best possible deal for your seller if you won’t even tell him a buyer made an offer on his property.
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The Texas Real Estate Commission did not adopt the minimum-service rule. First it was retracted because of a technical error, then the U.S. Department of Justice threw things off track a few days before the commission was to vote on the rule. Finally, Texas legislators stepped in and passed a law similar to what the real estate commission had proposed.
In any event, several media outlets—not just newspapers—sent out the warning that brokers would now be forced to provide “full service”—it was all a way for real estate brokers to lock in large commissions. Limited service brokers cried that it would force them to jack up their prices. Consumer choice would be severely curtailed.
Only none of those dire consequences came to pass. I just looked online to see that many of the same real estate brokers quoted in those articles two years ago are charging about or exactly the same low fee (for pretty extremely limited service) that they were charging two years ago. Some Texas brokers currently advertise that they will charge you less than $500 to list your property. Of course, all licensed brokers now clearly know what services they must provide—at a minimum—for their clients. No more ignoring an offer to buy their client’s home. No longer can any broker legally tell a client that he’s not going to answer questions about the transaction.
I guess it’s too much to expect the newspapers to run another story—one that explains what really came to pass. If they did, though, it wouldn’t take much space. They could go with something like this: Remember when we told you two years ago about a new rule that would force real estate brokers to provide full service to all consumers for full commissions? Never mind.
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