BrokerageIndustry News

Real estate industry lacks price competition

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There is no price competition in the real estate industry, and the very structure of organized real estate is what may be preventing this, according to a report from the Government Accountability Office released today. The use of the multiple listing service enables brokers to cooperate, but may discourage them from offering discounted commission rates, the report notes. And while the Internet has opened up more information to consumers, its power may be limited by real estate brokers. In addition, some state laws and regulations may also impede price competition, the GAO said. Price competition in the real estate industry has come under scrutiny because as the housing boom has pushed up home prices nationwide, fees paid for brokerage services have also climbed. The average commission on a home sale remains at about 6 percent of the total sales price, regardless of home price, local market conditions or effort required to sell the home, and this has raised questions over price com...