Increasingly there is a pressing need for effective regulation of residential real estate brokerage services. Consumer spending on, distrust for, and complaints about these services is significant and growing. Moreover, required disclosures to home buyers and sellers are not being enforced, and traditional brokers are restricting service options and prices offered by nontraditional brokers.
These real estate brokerage services are ostensibly regulated by state real estate commissions or boards. But these regulatory bodies are dominated by practicing real estate brokers. In fact, in some states commissioners have acted to restrict competition and consumer choice, and in most they have failed to adequately inform, educate, and protect home sellers and buyers who use the brokerage services.
Practicing real estate brokers should be prohibited from serving in any regulatory capacity. Instead, like state insurance commissioners and public utility commissioners, regulators should be appointed (or popularly elected) from a pool of non-industry candidates and should be charged first and foremost with the protection of consumers, not brokers.