As reported in the Observer yesterday, North Carolina’s three largest Realtor associations — in Charlotte, Greensboro and Raleigh — are trying to nix part of a 2008 rule that forces buyers’ agents to disclose whether they are also set to receive compensation from the home’s sellers. The rule is the result of findings that many homebuyers are unaware that their agent may have an extra financial motive (or “hidden bonus”) for showing them particular homes.
So far, the reasons given by the Realtors for doing away with the rule is that it’s “burdensome” and that it could confuse customers. It’s revealing that it’s the largest real estate companies that are complaining, since they are more likely than smaller ones to have both the seller’s and the buyer’s agent, which makes them more capable of hiding the extra incentives. Others are arguing that … here it comes … the government is interfering in a “free market.” But in a truly free market, wouldn’t all the information be readily available to both buyers and sellers? And, if the realtors are so concerned about their customers’ “confusion,” shouldn’t they want those customers to know everything that’s going on when they buy a house. Or, as if often the case in these kinds of discussions, do the critics mean realtors should be free to manipulate the market for their own ends?
This article appears in Feb 9-15, 2010.
