Hacker News Reader

Comment by underseacables | Hacker News Reader

I think something that is partly to blame is the expansive licensure scheme, and how those licenses have become a monopolistic edge to protect and expand. Many professions have required a license, and it is the responsibility of the organization that issue those license to protect an expand their authority, preventing competition, and pushing up prices higher.

The license requirement creates a perpetuating lobby, which I think is partly to blame for real estate agent commission issue.

Do we really need to enshrine into law every professions market corner? A certification law would do just as well, but it would not have the effect of blocking competition, preventing market, disruption, and forcing people who want to practice that particular profession to constantly pay a private association for the right to be licensed.

View on HN

A real estate license mostly teaches what you need to know about the laws around real estate transactions. It's pretty easy to get. Take the courses, pass the test, and you're in, there's no restricted access. You can set up your own brokerage and everything.

But if you want your brokerage to have access to the MLS system, you have to join the Realtor organization. That's where the monopolistic behavior creeps in.

Except in Oregon you also have to have a minimum number of transactions per year or have a “senior broker” sign off on all your deals (for a price).

Most states require some years of experience before you can become an independent broker, in Florida it's 2 years of active work / 5 years in the system.

Your location may be different, but what you are describing is not universal or even common in my experience working in multiple states. Yes, it is absolutely true that there should be a higher barrier to entry and even after "first renewal" (which is normally a second round of education), there isn't enough training before we let new agents loose into the world. That said - in every state I'm aware of, you work under a licensed broker who has additional licensing, training, and legal responsibility. Until you've reached that level of licensing it is not possible to set up your own brokerage. I've seen a work around where a non-licensed business owner paid someone to be their broker, but that regardless there has to be someone with the right licensing running the business.

Also - whether MLS members must also be Realtors is a rule of the MLS and not a universal requirement. The NAR, nor MLSs, do not set commissions. In fact, much of the MLS rule changes in recent years that I've observed have been about making sure non-Realtor licensees have market access. It's right there in our paperwork that I show clients where we ask permission so that the seller knows who will be entering their home.

We should always have several competing licensing bodies.

1 licensing body: never considers the cost of gatekeeping, only the self-benefit.

2 licensing bodies: they are forced to weigh the cost of gatekeeping against the self-benefit, but you might get a race to the bottom.

3 licensing bodies: they are forced to weigh the cost of gatekeeping against the self-benefit, and if they race to the bottom too hard we can decertify one and retain competition until we can bud off a replacement.

Reply on news.ycombinator.com