California Association of Realtors amend listing agreement after DOJ inquiry and it still stinks
OMG, is that what you call “new and improved”??????
The California Association of Realtors has dropped a controversial phrase from its listing agreement that may have facilitated the off-MLS sharing of commissions between agencies, amidst a newly launched formal inquiry by the Department of Justice. But the contract itself still suffers, maybe even more so now, from reading comprehension challenges that burdened the prior version of the form.
A key sentence has been deleted according to Inman News: “Optional additional compensation, if any, to Seller’s Broker to be offered to Buyer’s brokers.”
Consumer Federation of America described the first version of the form as such: “No seller will read this monster of a document—much less be able to understand it.”
“It is unrealistic to think that the average seller will understand anything more than, perhaps, 20% of this document...There is no reason why a listing agreement needs to be virtually indecipherable.”
And now the form has grown to a whopping nine pages with the addition of a two page MLS addendum also obtained by Inman.
California has become ground zero in an ever evolving game of Whac-A-Mole being played by the industry, that goes something like this: Sure we lost the bombshell commission lawsuit in KC, but hey can’t we just tweak the forms to accomplish the same thing and Ketchmark, the DOJ and CFA, won’t notice? Or at least it will take years and years to sue us again?
Are these esteemed industry “leaders” that dumb/reckless or just so used to getting their way over decades that can’t wrap their head around the new reality?
Here’s a final thought floated in Wednesday’s Industry Relations podcast: Is having a form designed by an association of 180,000 competitors in and of itself an anti-trust violation?
One of the reasons 'they' give is because California is very litigious, and they include 'extra' language to avoid future lawsuits. Back in the 30's a contract was a half a page. 90 years of lawsuits later is 30x that long.
However, I did try to read sections of that contract and it's pretty brutal.