Real Estate Agent’s Pocket Listings: Smart or Sabotage?
HomeServices of America, a Warren Buffett real estate company has been causing a big stir in the industry as its brokerages shun listing syndication and bury home listings deep in their pockets. This first came to light when Edina Realty decided to pull property listings from major third party websites. Now an affiliated group of Iowa real estate agents is refusing to share commissions with buyer’s real estate agents or at least in some cases offering a reduced split. While there are definitely arguments for the move homeowners and real estate investors listing their homes with these brokerages could be getting severely hurt. If your real estate agent is turning away offers on your home because they don’t want to share the commission as is customary and want to keep it to themselves that means missing out on opportunities to sell. For those facing foreclosure it could be ruinous while others could certainly end up selling for less as they are under time pressures. While this may not have been found to break any laws yet, it could certainly be deemed unethical, at least for those who are members for the Realtors association. At the same time it could be a smart more from a strategic business point of view. It means starving out the competition and preventing others from making money from advertising their listings. So is this something investors should emulate or is sharing smarter for long term growth and sustainability? Warren is still regarded as a legendary investor but many have certainly questioned whether he has lost it lately. If you are in the financially dominant position and have great inventory this can work. Though at the same time it does seem like a big step in time, rather than pushing towards more sharing and trade which has created more wealth to be shared for all during recent years.
Is Warren Buffett’s new real estate strategy hurting homeowners or just plain smart business?