Breakingviews - Market forces knock ominously on US realtors’ door

NEW YORK, April 12 (Reuters Breakingviews) - The United States has more than 1.5 million realtorsNew Tab, opens new tab helping people buy and sell homes – more agents than there are currently homes for saleNew Tab, opens new tab. That odd imbalance is the result of decades of distortions that have benefited the real-estate industry at the expense of its customers. A recent ruling promises to change the way homebuying works, creating some winners, and many losers both in the industry and around it.

Real-estate brokerage is an example of how market forces don’t always prevail. In a typical transaction in the United States, both buyer and seller will have an agent, unlike in the United Kingdom where usually only the seller does. However, the agent acting for a US buyer often takes their fee from the seller, not the buyers themselves. That is now changing. In March, the National Association of Realtors agreed to settle antitrust litigation regarding commissions, and if courts approve the settlement, a homebuyer will soon have a more direct way to negotiate with their agent.

That seems like an obvious thing buyers would want. So what took so long? For starters, realtors spend an enormous amount of money lobbying lawmakers, who also have little incentive to push for c...
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