BrokerageIndustry News

Feds say real estate brokers block competition

Report recommends repealing existing laws

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

A report released Tuesday by the U.S. Federal Trade Commission and U.S. Department of Justice concludes that real estate brokers, state legislators and state regulators have impeded competition in the real estate industry, and recommends a repeal of existing laws, rules and regulations that limit consumer choices. While surveys suggest that real estate commission rates -- based on a percentage of a home's selling price -- have dropped during a rapid run-up in home prices from 2001-05, "real commission fees rose about 25 percent" during that period. Because commission fees "do not tend to vary in proportion to changing home prices," they are considered to be "relatively inflexible," the report states, and the agencies recommend that regulators pursue a detailed study of commission rate and fee practices to better measure price competition in the industry. The president for the National Association of Realtors trade group said in response that the industry is "fiercely competitive," noti...