Obviously, I loved this post seeing as how I published it. :) But since you called me out directly, I do want to respond very quickly -- without taking anything away from what you've written.
On the first point, of course you're correct that California imposes fiduciary duty on agents. My point simply is that California (and all other states) should STOP. Government should back off and recognize that fiduciary duty is the HIGHEST bar for a human being. Rather than making that the floor, make it the ceiling.
We should raise up those agents willing to embrace that duty, knowing what that means for them, for their business, for their behavior... rather than demanding that the millions of people just doing business meet that extraordinary bar.
On the second point, you asked, "Which incentives serve the most people?"
My answer is: let the free market decide. None of us are smart enough to know what incentives OUGHT to exist for other people. Creating and imposing incentives are sure ways to have market distortion and bad outcomes.
My gut feeling is that if brokerages are incentivized to make more profit, and agents are incentivized to make more money, and consumers are incentivized to get the most they can while paying the least, a market equilibrium would emerge that would serve the most people. Maybe that's pie-in-the-sky libertarian thinking, but it is what I believe the free market to be very good at doing.
The issue is that the government, NAR, regulators, MLS, Zillow, everybody who controls the rules and policies need to back off to let that free market work.
I think in a free(er) market, we would see the professionals with integrity rise simply because that is what more consumers would demand. But maybe not? None of us know, so let's let the market work.
Thanks so much again for publishing my piece, Rob! I’m truly grateful.
I don’t mind disagreeing with the "free market guy," and when that free market guy is also Rob Hahn, even better. We both know that when you strip away some of the strong statements, buzzwords, fluff and dirt, and you get down to the very bottom of it, we actually agree on a lot more than people might think.
Just curious Rob, why do you think that after 100 years we haven't already balanced all the various incentive structures? Why is it that what we are experiencing now is not the most efficient mechanism with a balanced equilibrium-based process for consumers to buy and sell their properties?
Your no rules, free market system is exactly what we had 100 years ago when all real estate sales were handled by the Speculators. Those very few individuals that had the actual knowledge and information about what properties sold and at what prices because it was their way of making money versus a consumer that made one or two transactions in their lifetime. The free-market Speculator would go out and con sellers, using portions of information to justify a low purchase price. The Speculator would then turn around and sell that same property for significantly more money, using their access to information to justify their new higher price to the uninformed buyer. The Speculator then kept the money between those two sales as his fee. That was the Free Market in play, creating an incentive for those with superior information and experience to prey on those that lacked access to that same information.
The entirety of organized real estate started because there were individuals who were the exact kind of people that Summer chooses to support: “I choose to support the players whose incentives promote transparency. I choose the ones that reward care, competence, and compliance. I choose the ones that build trust, not just between parties but within the system as a whole.” These innovative Speculators saw a different incentive structure that would still make them money but would also balance the needs of the consumer in a better way. There have been a lot of twists and turns over the decades, and unfortunately a few of them have focused on the real estate practitioner using their superior knowledge and information to make more money at the consumer’s expense. But, for the most part, the industry has developed a system that is now the best in the industrialized world. The MLS, Exclusive Listing Agreements, and mandatory rules (these do not exist anywhere else) all help balance the incentives of the consumers against those of their agents in buying and selling homes. And all groups are greatly benefitted by them.
I would argue that over the last 100 years it is our free-market system that has already brought us to the equilibrium point where many agents can make a very quality living helping consumers buy and sell properties. Go try and buy a property in any non-North American country and then come back and let me know how that experience went for you. I've looked at buying investment properties in the Caribbean, France, Austria, Croatia and Ireland. It is extremely difficult to get even the most basic information necessary to do any kind of analysis. Just maybe the system we have is the best it's ever going to be. Why can't we just live with that?
But when you get found to be an anticompetitive cartel in under an hour of jury deliberations in federal court, with billions in antitrust damages, leading to a world-changing settlement... I think you can safely say what we have is nowhere near a free-market system.
I’d suggest that today’s system more closely resembles a cartel than a true free market.
A cartel is a group of firms or individuals that collude, explicitly or tacitly, to fix prices, limit competition, and protect shared interests at the public’s expense. That’s what we have now. The largest brokerages set the fees of their competitors, while using their fee scheme to exclude competition, they restrict access to property data, enforce anti-competitive norms, and structure compensation in ways that eliminate price discovery and consumer choice. It's still going today with big brokerage work arounds.
The Moehrl and Sitzer lawsuits made clear: it is unlawful collusion for listing brokers to set buyer broker fees through the MLS. But instead of reform, many brokers are now doing the same thing off the MLS, deliberately shifting their conspiracy into the shadows. They apparently look at the court's decision as a cost of doing business. It shows how far we are from anything resembling a functioning free market.
Consumers can’t see all available homes. Attorneys and DIY buyers can’t access lockboxes, Realtor forms, or showing systems. And even the most ethical agents are trained to abuse the trust of their clients: pushing in-house mortgage, title, and insurance services; steering based on commissions; and embracing insurmountable conflicts like dual agency. That’s not consumer protection. That’s exploitation.
If this were truly a free market, we wouldn’t need to prohibit off-MLS compensation sharing or mandate buyer agency agreements. A functioning market would have already corrected for transparency and trust. But real estate isn’t a free market, it’s a protected one. And asking regulators to fix it doesn’t work when those same regulators have long operated as part of the cartel. Worse, many licensees have been trained to normalize conduct that, in any true fiduciary profession, would be disqualifying or even criminal.
So no, this isn’t the most efficient or balanced model. It’s a rigged system that still rewards gatekeeping, self-dealing, and opacity. We need a market that rewards honesty, transparency, and competition on merit, not one that defends an oligopoly under the guise of consumer protection.
Good stuff from two people I deeply appreciate through their writing over the last couple of years.
When we were asked to take over this business, it was lead generation idea and we built it into multi-state brokerages.
People think that our focus on niche markets (lake, beach, mountain homes) is our magic, the other key thing that got my attention was this opportunity:
How do we design a brokerage model that aligns, buyers, sellers, and agents differently, in a way that has a benefit for all? And how do we do this in a way agents with other brokerages won't shun or blackball us (a.k.a., Glenn Kelman on 60 minutes insulting the industry).
We have a viable model that does not depend on an infantry of agents. In our annual national meeting, new agents come up to us and say, "This is unlike any real estate meeting I've ever been to," to which Doris (COO) will answer, "When you don't take everyone, you get a different type of agent."
Watching the industry go to war is a spectacle. Where it ends up is an unknown.
I agree with Rob, people do what they are incented to do.
But Summer, you are right too.
Our leadership team knows we must be profitable to survive and to serve clients and agents.
But we also are insistent that we are very serious that our choices will be the best we can do for people, and what we can have peace with when we can lay our head down at night.
It may not be how the world works, but it is how we choose to make our little corner of the world work.
Like Marilyn in the Moon, most people can't see what we see. And that's okay. We don't need everyone, just those who share our moonlight.
Summer, your writing is stunning and your perspective is grounded in both principle and experience. And Rob, your responses always invite the deeper conversation. I have respect for both of you.
But I want to challenge the idea that we should “let the free market decide.”
There is no free market in real estate. Not even close.
A free market requires informed consumers, equal access, and independent professionals competing on merit. Instead, we’ve allowed an ecosystem to thrive where those conditions don’t exist:
* Information is restricted. Consumers can't easily access full inventory without an agent. FSBOs and attorneys are locked out.
* Competition is suppressed. Agents are trained to steer, and those who work outside the system are penalized or blackballed.
* Loyalty is distorted. Dual agency and in-house affiliates blur the lines, turning fiduciary duty into a marketing slogan.
Even the most ethical agents are doing things wrong because the industry trained them that way. They're taught that selling affiliated services is good. That keeping things "in-house" is efficient. That disclosing a conflict somehow absolves it. But fiduciaries don’t create conflicts, they avoid them.
In a truly free market, bad actors would be weeded out by consumer choice and transparency. But when the incentives reward self-dealing and opacity, integrity becomes a disadvantage.
And what we’re seeing now, firms working around MLS rules to preserve the same inflated fee structures, proves this isn't just about incentives. It's about systemic collusion. If the system were fair, you wouldn't need a workaround.
So yes, let’s talk incentives. But only after we admit this: the rules were never neutral. They were written to protect licensees from consumers. That’s not capitalism. It’s socialized real estate.
I’m not anti-agent. I’m pro-consumer. I believe this profession can be rebuilt around true loyalty, transparency, and trust, but only if we stop pretending the current system is a market at all.
I appreciate your kind comments about my writing, Doug. Thank you so much.
You mentioned: "A free market requires informed consumers, equal access, and independent professionals competing on merit." Obviously, that's what we want, every day, all day. And it feels like that’s only possible because of licensing laws, rules, regulators, compliance, enforcement and the like.
Something tells me that Rob might argue that this is not truly a "free" market, then. Looking forward to hearing his thoughts on this as well.
Thank you again, Summer. I’ve admired your work for a long time and deeply appreciate your willingness to engage on these issues.
You’re absolutely right that licensing laws, compliance, and enforcement should foster transparency and fairness. But in practice, the real estate industry functions as a closed, protectionist market, one where access to properties, data, forms, and even showing tools is tightly controlled by the Realtor Associations and their MLSs.
Try being a real estate attorney or DIY buyer attempting to submit an offer on a listed home. You’ll find the door locked. The MLS, lockboxes, scheduling tools, and even access to full data are all restricted. Try using a non-Realtor form to draft a purchase agreement and hearing Realtors claim that their E & O policy won't allow them to accept it. Then try to access their forms and find that they are copyrighted. Attorneys can’t even write offers on behalf of clients without being stonewalled by industry gatekeepers. It’s not a competitive market when alternative models can’t compete.
Even the most ethical agents are often unknowingly trained to violate fiduciary principles. They’re taught that dual agency is acceptable, that affiliated title and mortgage are "conveniences" rather than conflicts, and that selling services to your own client is compatible with fiduciary duty. It’s not. A true fiduciary can’t serve two masters, can’t promote conflicts, and certainly can’t sell to the people they advise.
In Minnesota, I’ve seen up close how licensing laws and regulators function more to shield industry insiders than protect the public. Our statute even provides that giving a consumer a misleading dual agency disclosure form satisfies common law agency duties. In other words, the law itself has been rewritten to reduce liability, not raise standards.
You mentioned that a fair market feels possible “because of licensing laws, rules, regulators, compliance, enforcement and the like.” I wish that were true. In theory, those mechanisms should create fairness. But in practice, they’ve too often served to entrench incumbents, restrict access, and protect licensees from accountability, rather than protect the public.
I say this as someone who’s spent decades working in real estate law, consumer protection, and who has filed dozens of licensing complaints. Most state regulators are captured. Enforcement actions against the largest brokerages are virtually nonexistent. The licensing laws themselves are often structured to shield licensees from the very fiduciary duties they owe. In Minnesota, simply handing over a disclosure form excuses a broker from the common law obligations of loyalty and candor.
So yes, informed consumers, equal access, and independent professionals competing on merit is what we all should want. But we’re not there yet. And we won’t get there through licensing alone, not until those rules and regulators stop protecting the insiders and start protecting the people.
Oh, Summer! I didn't know I had a favorite compliance expert until now. How poignant.
We have a tribe in Greater Boston that has been admiring Marilyn in the moon for years. You absolutely can run a business that focuses on the consumer. Instead of "more is better," we live by "better is more."
We've been educating consumers about dark listings for over a decade. We were using buyer agreements long before they became fashionable (well, mandatory) - mostly because what we charged was irrelevant to how a listing agent negotiated buyer fees.
Lately, some companies squawking about sellers' rights to list privately have only made it easier for us to differentiate ourselves.
Thank you for your conviction that real estate can be done at a higher level when everyone wins - clients, agents, and brokerages alike.
Thank you! I, too, still believe in "Marilyn in the Moon"! But, mostly I believe in my clients and their wants and needs. Once the buyer agents begin to understand, and explain their relevance and value to buyers, we can move on. Marilyn awaits us~
Obviously, I loved this post seeing as how I published it. :) But since you called me out directly, I do want to respond very quickly -- without taking anything away from what you've written.
On the first point, of course you're correct that California imposes fiduciary duty on agents. My point simply is that California (and all other states) should STOP. Government should back off and recognize that fiduciary duty is the HIGHEST bar for a human being. Rather than making that the floor, make it the ceiling.
We should raise up those agents willing to embrace that duty, knowing what that means for them, for their business, for their behavior... rather than demanding that the millions of people just doing business meet that extraordinary bar.
On the second point, you asked, "Which incentives serve the most people?"
My answer is: let the free market decide. None of us are smart enough to know what incentives OUGHT to exist for other people. Creating and imposing incentives are sure ways to have market distortion and bad outcomes.
My gut feeling is that if brokerages are incentivized to make more profit, and agents are incentivized to make more money, and consumers are incentivized to get the most they can while paying the least, a market equilibrium would emerge that would serve the most people. Maybe that's pie-in-the-sky libertarian thinking, but it is what I believe the free market to be very good at doing.
The issue is that the government, NAR, regulators, MLS, Zillow, everybody who controls the rules and policies need to back off to let that free market work.
I think in a free(er) market, we would see the professionals with integrity rise simply because that is what more consumers would demand. But maybe not? None of us know, so let's let the market work.
Thanks so much again for publishing my piece, Rob! I’m truly grateful.
I don’t mind disagreeing with the "free market guy," and when that free market guy is also Rob Hahn, even better. We both know that when you strip away some of the strong statements, buzzwords, fluff and dirt, and you get down to the very bottom of it, we actually agree on a lot more than people might think.
By the way, can you see Marilyn in the Moon?
Great post Summer!
Just curious Rob, why do you think that after 100 years we haven't already balanced all the various incentive structures? Why is it that what we are experiencing now is not the most efficient mechanism with a balanced equilibrium-based process for consumers to buy and sell their properties?
Your no rules, free market system is exactly what we had 100 years ago when all real estate sales were handled by the Speculators. Those very few individuals that had the actual knowledge and information about what properties sold and at what prices because it was their way of making money versus a consumer that made one or two transactions in their lifetime. The free-market Speculator would go out and con sellers, using portions of information to justify a low purchase price. The Speculator would then turn around and sell that same property for significantly more money, using their access to information to justify their new higher price to the uninformed buyer. The Speculator then kept the money between those two sales as his fee. That was the Free Market in play, creating an incentive for those with superior information and experience to prey on those that lacked access to that same information.
The entirety of organized real estate started because there were individuals who were the exact kind of people that Summer chooses to support: “I choose to support the players whose incentives promote transparency. I choose the ones that reward care, competence, and compliance. I choose the ones that build trust, not just between parties but within the system as a whole.” These innovative Speculators saw a different incentive structure that would still make them money but would also balance the needs of the consumer in a better way. There have been a lot of twists and turns over the decades, and unfortunately a few of them have focused on the real estate practitioner using their superior knowledge and information to make more money at the consumer’s expense. But, for the most part, the industry has developed a system that is now the best in the industrialized world. The MLS, Exclusive Listing Agreements, and mandatory rules (these do not exist anywhere else) all help balance the incentives of the consumers against those of their agents in buying and selling homes. And all groups are greatly benefitted by them.
I would argue that over the last 100 years it is our free-market system that has already brought us to the equilibrium point where many agents can make a very quality living helping consumers buy and sell properties. Go try and buy a property in any non-North American country and then come back and let me know how that experience went for you. I've looked at buying investment properties in the Caribbean, France, Austria, Croatia and Ireland. It is extremely difficult to get even the most basic information necessary to do any kind of analysis. Just maybe the system we have is the best it's ever going to be. Why can't we just live with that?
I'll have to write a longer response, Ed.
But when you get found to be an anticompetitive cartel in under an hour of jury deliberations in federal court, with billions in antitrust damages, leading to a world-changing settlement... I think you can safely say what we have is nowhere near a free-market system.
I’d suggest that today’s system more closely resembles a cartel than a true free market.
A cartel is a group of firms or individuals that collude, explicitly or tacitly, to fix prices, limit competition, and protect shared interests at the public’s expense. That’s what we have now. The largest brokerages set the fees of their competitors, while using their fee scheme to exclude competition, they restrict access to property data, enforce anti-competitive norms, and structure compensation in ways that eliminate price discovery and consumer choice. It's still going today with big brokerage work arounds.
The Moehrl and Sitzer lawsuits made clear: it is unlawful collusion for listing brokers to set buyer broker fees through the MLS. But instead of reform, many brokers are now doing the same thing off the MLS, deliberately shifting their conspiracy into the shadows. They apparently look at the court's decision as a cost of doing business. It shows how far we are from anything resembling a functioning free market.
Consumers can’t see all available homes. Attorneys and DIY buyers can’t access lockboxes, Realtor forms, or showing systems. And even the most ethical agents are trained to abuse the trust of their clients: pushing in-house mortgage, title, and insurance services; steering based on commissions; and embracing insurmountable conflicts like dual agency. That’s not consumer protection. That’s exploitation.
If this were truly a free market, we wouldn’t need to prohibit off-MLS compensation sharing or mandate buyer agency agreements. A functioning market would have already corrected for transparency and trust. But real estate isn’t a free market, it’s a protected one. And asking regulators to fix it doesn’t work when those same regulators have long operated as part of the cartel. Worse, many licensees have been trained to normalize conduct that, in any true fiduciary profession, would be disqualifying or even criminal.
So no, this isn’t the most efficient or balanced model. It’s a rigged system that still rewards gatekeeping, self-dealing, and opacity. We need a market that rewards honesty, transparency, and competition on merit, not one that defends an oligopoly under the guise of consumer protection.
Good stuff from two people I deeply appreciate through their writing over the last couple of years.
When we were asked to take over this business, it was lead generation idea and we built it into multi-state brokerages.
People think that our focus on niche markets (lake, beach, mountain homes) is our magic, the other key thing that got my attention was this opportunity:
How do we design a brokerage model that aligns, buyers, sellers, and agents differently, in a way that has a benefit for all? And how do we do this in a way agents with other brokerages won't shun or blackball us (a.k.a., Glenn Kelman on 60 minutes insulting the industry).
We have a viable model that does not depend on an infantry of agents. In our annual national meeting, new agents come up to us and say, "This is unlike any real estate meeting I've ever been to," to which Doris (COO) will answer, "When you don't take everyone, you get a different type of agent."
Watching the industry go to war is a spectacle. Where it ends up is an unknown.
I agree with Rob, people do what they are incented to do.
But Summer, you are right too.
Our leadership team knows we must be profitable to survive and to serve clients and agents.
But we also are insistent that we are very serious that our choices will be the best we can do for people, and what we can have peace with when we can lay our head down at night.
It may not be how the world works, but it is how we choose to make our little corner of the world work.
Like Marilyn in the Moon, most people can't see what we see. And that's okay. We don't need everyone, just those who share our moonlight.
Thanks for sharing!
G
Summer, your writing is stunning and your perspective is grounded in both principle and experience. And Rob, your responses always invite the deeper conversation. I have respect for both of you.
But I want to challenge the idea that we should “let the free market decide.”
There is no free market in real estate. Not even close.
A free market requires informed consumers, equal access, and independent professionals competing on merit. Instead, we’ve allowed an ecosystem to thrive where those conditions don’t exist:
* Information is restricted. Consumers can't easily access full inventory without an agent. FSBOs and attorneys are locked out.
* Competition is suppressed. Agents are trained to steer, and those who work outside the system are penalized or blackballed.
* Loyalty is distorted. Dual agency and in-house affiliates blur the lines, turning fiduciary duty into a marketing slogan.
Even the most ethical agents are doing things wrong because the industry trained them that way. They're taught that selling affiliated services is good. That keeping things "in-house" is efficient. That disclosing a conflict somehow absolves it. But fiduciaries don’t create conflicts, they avoid them.
In a truly free market, bad actors would be weeded out by consumer choice and transparency. But when the incentives reward self-dealing and opacity, integrity becomes a disadvantage.
And what we’re seeing now, firms working around MLS rules to preserve the same inflated fee structures, proves this isn't just about incentives. It's about systemic collusion. If the system were fair, you wouldn't need a workaround.
So yes, let’s talk incentives. But only after we admit this: the rules were never neutral. They were written to protect licensees from consumers. That’s not capitalism. It’s socialized real estate.
I’m not anti-agent. I’m pro-consumer. I believe this profession can be rebuilt around true loyalty, transparency, and trust, but only if we stop pretending the current system is a market at all.
I appreciate your kind comments about my writing, Doug. Thank you so much.
You mentioned: "A free market requires informed consumers, equal access, and independent professionals competing on merit." Obviously, that's what we want, every day, all day. And it feels like that’s only possible because of licensing laws, rules, regulators, compliance, enforcement and the like.
Something tells me that Rob might argue that this is not truly a "free" market, then. Looking forward to hearing his thoughts on this as well.
Thank you again, Summer. I’ve admired your work for a long time and deeply appreciate your willingness to engage on these issues.
You’re absolutely right that licensing laws, compliance, and enforcement should foster transparency and fairness. But in practice, the real estate industry functions as a closed, protectionist market, one where access to properties, data, forms, and even showing tools is tightly controlled by the Realtor Associations and their MLSs.
Try being a real estate attorney or DIY buyer attempting to submit an offer on a listed home. You’ll find the door locked. The MLS, lockboxes, scheduling tools, and even access to full data are all restricted. Try using a non-Realtor form to draft a purchase agreement and hearing Realtors claim that their E & O policy won't allow them to accept it. Then try to access their forms and find that they are copyrighted. Attorneys can’t even write offers on behalf of clients without being stonewalled by industry gatekeepers. It’s not a competitive market when alternative models can’t compete.
Even the most ethical agents are often unknowingly trained to violate fiduciary principles. They’re taught that dual agency is acceptable, that affiliated title and mortgage are "conveniences" rather than conflicts, and that selling services to your own client is compatible with fiduciary duty. It’s not. A true fiduciary can’t serve two masters, can’t promote conflicts, and certainly can’t sell to the people they advise.
In Minnesota, I’ve seen up close how licensing laws and regulators function more to shield industry insiders than protect the public. Our statute even provides that giving a consumer a misleading dual agency disclosure form satisfies common law agency duties. In other words, the law itself has been rewritten to reduce liability, not raise standards.
You mentioned that a fair market feels possible “because of licensing laws, rules, regulators, compliance, enforcement and the like.” I wish that were true. In theory, those mechanisms should create fairness. But in practice, they’ve too often served to entrench incumbents, restrict access, and protect licensees from accountability, rather than protect the public.
I say this as someone who’s spent decades working in real estate law, consumer protection, and who has filed dozens of licensing complaints. Most state regulators are captured. Enforcement actions against the largest brokerages are virtually nonexistent. The licensing laws themselves are often structured to shield licensees from the very fiduciary duties they owe. In Minnesota, simply handing over a disclosure form excuses a broker from the common law obligations of loyalty and candor.
So yes, informed consumers, equal access, and independent professionals competing on merit is what we all should want. But we’re not there yet. And we won’t get there through licensing alone, not until those rules and regulators stop protecting the insiders and start protecting the people.
Oh, Summer! I didn't know I had a favorite compliance expert until now. How poignant.
We have a tribe in Greater Boston that has been admiring Marilyn in the moon for years. You absolutely can run a business that focuses on the consumer. Instead of "more is better," we live by "better is more."
We've been educating consumers about dark listings for over a decade. We were using buyer agreements long before they became fashionable (well, mandatory) - mostly because what we charged was irrelevant to how a listing agent negotiated buyer fees.
Lately, some companies squawking about sellers' rights to list privately have only made it easier for us to differentiate ourselves.
Thank you for your conviction that real estate can be done at a higher level when everyone wins - clients, agents, and brokerages alike.
Thank you! I, too, still believe in "Marilyn in the Moon"! But, mostly I believe in my clients and their wants and needs. Once the buyer agents begin to understand, and explain their relevance and value to buyers, we can move on. Marilyn awaits us~