Before you see and believe a headline stating "real estate agents are contributing to housing unaffordability," I want you to know that there are three practices in my industry that Senators Elizabeth Warren and Cory Booker are bringing to the FTC to investigate, and I don't blame them. The job of the FTC is to support consumers, and the three practices being called out could lead to additional fees and premiums, making it more expensive for consumers to buy homes.
I'll be honest. These three practices are real, they are common, and they have been quietly costing buyers money for a long time. The scrutiny is overdue. Here's what each one is, how it works, and what Vermont buyers should know about navigating around them.
1. The "Contact Agent" Button On Real Estate Portals
The first is the "contact agent" button you see on real estate portals like Zillow. Most consumers assume they're contacting the agent who listed the property, but instead, they're connected with an agent who has agreed to pay that portal a percentage of their commission in exchange for that lead and contact information. Those agents can be firm about a higher commission to offset the cost of referral fees, which can be as much as 40%.
In practice, this means a buyer who clicks "contact agent" on a Zillow listing is often routed to someone who has no particular connection to that property, that neighborhood, or that market segment. They are routed to whoever paid for the lead. The buyer doesn't know this which is an intentional design of that system.
What this means for you as a Vermont buyer is simple. If you want to speak to the agent who actually listed a property, call the brokerage directly and ask for that agent by name. A better path, in my opinion, is to work with a single buyer's agent who represents your interests from the start. One agent, your agent, who learns what you want and finds it for you across every listing in the market. That's the structure the industry was built around and it's still the structure that serves buyers best.
Here is my own honest position on this. I do get leads from Redfin, and yes, they ask for a 40% referral fee. I don't love that structure but I have met some great buyers through those leads, and I am unwavering in my stance that my commission should never stand between a buyer and a home they want to live in. I do not ask for premiums to offset the cost of the referral fee. The fee is my problem, not the buyer's. That is the only way this arrangement should work, and if you are being asked to pay a higher commission to an agent you were connected to through a portal lead, you have been handed someone else's problem.
2. Steering Buyers Toward Affiliated Mortgage Lenders
The second practice is to steer buyers towards affiliated mortgage lenders. You should always shop around for a great rate and an effective loan officer, and when an agent advocates for "streamlining the process" by connecting a buyer with a preferred lender, it could certainly cost you more.
The business model here is straightforward. A brokerage owns or has a financial relationship with a mortgage company. The agents in that brokerage are incentivized, sometimes formally and sometimes culturally, to funnel their buyers to that mortgage company. The buyer gets a "convenient" referral. The brokerage gets a referral fee or a share of the loan revenue. The buyer may or may not get the best rate and terms available to them.
The honest advice I give every buyer is to get at least three quotes from three different lenders. Local credit unions, local banks, and independent mortgage brokers often have better terms than large national lenders that depend on referral networks. Vermont has excellent local lenders and you owe it to yourself to shop them.
If your agent only recommends one lender, ask why. The answer may be perfectly fine. The lender may genuinely be the best fit for your situation. But you deserve to know whether there is a financial relationship behind the recommendation. Ask. A good agent will tell you honestly.
I do recommend specific lenders to my buyers, and I want to be clear about why. The lenders I recommend are tried and true. They have worked hard for clients of mine in the past, they offer competitive rates and fees, and they operate with the same education-first approach I bring to real estate rather than a sales approach. I don't have any financial or reciprocal arrangement with them. I recommend them because my clients have had genuinely good experiences, and because I would rather my buyers work with someone I trust than take their chances with a cold call from an unknown lender. You should still get other quotes. That is still the right thing to do. But if you ask me who to call first, I will tell you honestly who I'd call if I were in your shoes.
3. Private Listings That Limit Buyer Access
Lastly, there are some major players in the real estate industry who are advocating for a network of private listings where buyers have exclusive access to a network of homes for sale that aren't made available to the general public. That exclusive access can come at a premium price for buyers and is also a risk for sellers who may receive less interest because the home isn't marketed to the full pool of buyers.
This is a lose-lose for everyone except the brokerage running the network. Sellers lose because fewer eyes on their listing means fewer potential offers, which often means a lower final sale price. Buyers lose because they are either locked out of inventory entirely (if their agent isn't in the network) or they are paying for the privilege of seeing it first, often with less negotiating leverage because competition has been artificially restricted.
The MLS exists for good reasons. It creates a transparent, universally accessible marketplace where every listing is visible to every agent and every buyer. Pocket listings and private networks undermine that transparency, and they do it in a way that benefits a small set of large brokerages at the expense of consumers on both sides of the transaction.
In Chittenden County and the surrounding areas I serve, the vast majority of listings still go through the MLS, and that's a good thing. If you're a seller, insist your listing go on the MLS. If you're a buyer, work with an agent whose practice is to show you everything, not just the inventory their brokerage happens to control.
I will state my position on this one firmly. I do not believe in private or pocket listings because it is in a seller's best interest to be exposed to the maximum pool of buyers. Fewer eyes on a listing means fewer offers, less competition, and a lower final sale price. That math does not change because a brokerage marketing team found a clever name for it. The only exceptions I can think of are incredibly rare circumstances, like a politician or a celebrity whose privacy and safety might genuinely be at risk from a publicly marketed listing. For the ordinary Vermont seller, keeping your home off the MLS is almost always working against your own interest, and I will tell you that honestly if you ever ask.
What Vermont Buyers Can Do About Any Of This
The FTC investigation, if it happens, could take years. In the meantime, here are the questions every Vermont buyer should ask any agent they're considering working with:
Are you compensated by any portal or lead-generation service for responding to my inquiry? If yes, how does that affect what commission you'll charge?
Do you have a financial relationship, formal or informal, with any mortgage lender you might recommend? If yes, what is it?
Do you or your brokerage participate in any private listing networks or pocket-listing arrangements? Will I have access to all listings on the MLS, or only a subset?
What is your fiduciary obligation to me as a buyer?
An agent who answers all four of those questions clearly and without hedging is probably the kind of agent you want to work with. An agent who deflects, avoids the subject, or gives you corporate talking points is probably not.
The Bottom Line
Senators Warren and Booker are asking the right questions. Three common industry practices are costing consumers money in ways that aren't disclosed and aren't fair. The FTC should look at them, and I hope they do.
Vermont buyers don't have to wait for Washington to act. The best protection against these practices is choosing an agent and a brokerage whose incentives are aligned with yours from the start. Ask the questions. Expect clear answers. The right agent will welcome them because the right agent has nothing to hide.
