Baltimore Sun : Trust busters are going after real estate establishinment
THE JUSTICE Department has two blunt warnings for the American home real estate establishment:
Do not block efforts to save consumers money through rebates of real estate commissions.
Do not stand in the way of discount “fee-for-service” firms that will list sellers’ properties for a fixed-dollar amount, but not perform all the traditional brokerage services such as holding open houses or advising on buyers’ offers.
A week earlier, the Justice Department sued the Kentucky Real Estate Commission, a regulatory body dominated by state realty association board members, for prohibiting brokers from giving customers rebates on sales commissions.
The department also has stepped up the pace of its investigation of the National Association of Realtors’ rules covering online access to Multiple Listing Service (MLS) databases for possible antitrust violations.
In the suit filed against Kentucky, Hewitt accused the real estate commission board members of conspiring with themselves “and others” to “unreasonably restrain competition” in the state by banning brokers from offering commission rebates to clients.
Among the best known of these firms are ZipRealty, a Web-oriented full-service brokerage that rebates 20 percent of its commission to homebuyers, and RealEstate.com, an affiliate of LendingTree.com, that offers $1,000 rebates in the form of gift cards redeemable for merchandise at Home Depot and other stores.
Hewitt quoted comments made to Justice Department investigators by Kentucky Realtors who opposed competitors offering commission rebates. “I think this would just take money right out of our pocket,” said one. “We work too hard to give it away,” said another. “I am for the [rebate ban] as it stands now. If inducements were allowed, they could lead to competitive behavior.”
Realtors…one of my least favorite subjects. A few years ago, when I was buying a home, I had quite the education in Realtor behavior — in a hot seller’s market at that. I learned such things as the ability to keep houses off of MLS for a few days after listing, and so forth. After dealing with realtors, I wound up buying a home FSBO — which is doable, but admittedly time consuming.
So, with the fact that buying a home is time consuming, you would think that realtors and the realtor lobby wouldn’t have to undermine competitive behavior.