Are real estate agents a monopoly? Episode #183

Hello and welcome to Todd Miller TV. The question for today is: Are Real Estate agent’s a Monopoly? It’s been/It’s sort of been talked around that real estate agents have a monopoly on the real estate community and I just want to go ahead and clear up some misconceptions here about what a monopoly is, and what real estate agent’s roles are, and how this all works. The definition of a monopoly is a company or an entity, like a single entity, that has exclusive ability to provide a good or a service. So for example, AT&T one time was a monopoly. Because the only person you could get phone service form was AT&T. You couldn’t get it form anybody else. It was a monopoly. So, is a real estate agent’s a monopoly, well there are probably 2 million real estate agents in the U.S., maybe 3million. I know there’s about 1.6million realtors. So, let’s just say there’s 3 million real estate agents, well 3 million is not a monopoly. Now you ca say “Well what about companies?” Well in Las Vegas we have 1,400 Real Estate companies so that is not a monopoly. The largest company only has a 10% market share, so that’s clearly/as a matter fact real estate agents and companies are the opposite of the monopoly. It’s like the most open form of competition. The barrier to entry is nothing, it’s so easy to get in. All you have to do is join the/is pay maybe $2,000 total for your testing in the laws fees and you can become a Real Estate company. It’s pretty easy to do. It’s really super straight forward. So I wanna compare a couple different potential things that people have said. One is, that people’s still cable, that’s fine! You tetechnically are a monopoly, but you’re a cartel. Because what you do is you collude to set prices. Well, that’s really not the case. If you look, you’ll find that you can sell a property for nothing to a super high amount of money. It’s all negotiable. So there’s not any fixed pricing. If you look in the MLS you even can see that was being offered to other agencies completely negotiable. The other argument people make is while you real estate agents have the MLS, the MLS is a monopoly. Well guess what? it’s not! Anybody can start their own company, join the MLS and create a competing Real Estate company to do that. You know what? You can create a separate MLS. As a matter fact, there are other MLSs. They’re not just called MLSs. MLS is nothing more than a tolol that Real Estate Agents use. So, what about other websites? You know, Zillow, they’re not the MLS. What about for sale by owner dot com? And sites like that, there’s clearly enough competition in the industry. Saying real estate agents are a monopoly, is like saying: accountants have a monopoly in accounting; or doctors have a monopoly in practicing medicine. Okay? Which really isn’t the case. So I think what people confuse are that there’s a barrier to getting a home sold, that it’s really a difficult thing if you don’t use a professional. You can do it, I mean it’s not that you can’t do it but if you want to hire a professional then you’re gonna most likely have to use somebody with a Real estate license ’cause all 50 states require that if you sell somebody’s house, you do it yourself or you hire somebody who’s licensed. In some states you can use an attorney, attorneys are allowed in certain states to sell real estates. And then, form there it’s pretty straight forward. So the moral of the story is, call a bunch of agents if you’re worried about price, then you see to find out what level of cost, what level of service. ‘Cause there are places that for Three Ninety-five they’ll put you in the MLS and say call the seller for showings, offers, etc. And that’s all you’re gonna get. You’re not gonna get/you know if you want a Co-op, if you want to offer compensation, then you have to put something in and there as well. So/but there’s a lot of ways to do it. There’s no monopoly in Real Estate. I just thought I clear that up. That technical definition of monopoly: there isn’t one. It doesn’t exist. It’s not even close to one. It’s pretty perfect, almost perfect competition. So anyway, that is my update for today and I hope to see you on another video. Thanks!