U.S. Plans Antitrust Suit Over Real-Estate Listings

[question everything]

U.S. Plans Antitrust Suit Over Real-Estate Listings

Move by Justice Department Is Expected to Charge Rules Stifle Internet Competitors

By JOHN R. WILKE and JAMES R. HAGERTY
Staff Reporters of THE WALL STREET JOURNAL
May 9, 2005; Page A1

WASHINGTON – In a widening push to promote price competition in sales of residential real estate, government antitrust enforcers are preparing to sue the National Association of Realtors, alleging that its policies will illegally restrict discounting of sales commissions and put online competitors at a disadvantage.

The move, the latest effort by the Justice Department and the Federal Trade Commission aimed at protecting buyers and sellers of homes, could help take some of the sting from high real-estate costs. It comes as a hot housing market has caused prices to surge, sharply boosting income for brokers and sales agents, whose commissions typically amount to 5% to 6% of the sale price.

(snip)

The Justice Department is expected to charge that the NAR, in a proposed 2003 bylaw, illegally adopted practices intended to stifle Internet-based rivals and discounters, according to lawyers close to the case. These competitors often charge commissions below the traditional 6% that is divided between buying and selling agents. The NAR bylaw would allow its more than 1.2 million members to withhold their property listings from online brokers if they chose to do so. The date for it to take effect, which has been pushed back several times because of discussions with the Justice Department, now is this July. The NAR is the nation's largest trade group for brokerage firms, agents and others involved in selling real estate.

The government is also targeting industry-backed efforts to get state legislatures and real-estate boards, which set licensing standards, to enact regulations that in effect protect full-service real-estate agents and their commissions. Some brokers offer fixed fee-for-service, or menu, pricing that can lower consumers' costs, and others rebate a portion of the commission. The Justice Department and the FTC have warned several states in recent months that such laws hamper innovation and competition, and have formally objected to industry-supported proposals in Oklahoma and Texas. The Justice Department last month sued a Kentucky state agency that sought to restrict rebate payments to customers by residential-real-estate agents and brokers. In a complaint filed in U.S. District Court in Louisville, the U.S. charged that the five-member Kentucky Real Estate Commission illegally conspired to impose and enforce the rebate ban in order to fix commissions and deprive consumers of price competition by brokers.

(snip)

Write to James R. Hagerty at [e-mail]

URL for this article:
http://online.wsj.com/article/0,,SB111560847563627968,00.html

[punpirate]

1. There's been so little anti-trust action...

... these days that I have to wonder about the motivation for this--it's got to be some move to keep the bubble expanding.

[Carolab]

2. No, they're trying to get rid of independent agents and brokers.

So the banks can offer RE services.

[question everything]

3. By "they" I hope you mean large brokerage firms

because this activity by the Justice Dept. - really surprises me - is aimed at helping independent brokers and those who operate via the Internet.

[Carolab]

5. That's a cover. THIS is what they are trying to do.

“Realtors® across America applaud Senators Shelby, Allard, Burns, Clinton, Feingold, Isakson and Lautenberg for reintroducing the Community Choice in Real Estate Act and reiterating their commitment to passing the bill this Congress,” said NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City. “We continue to see tremendous support from members of Congress for keeping big banking conglomerates out of real estate, which has served as the pillar of our economy. We will not relent until national banks are permanently prohibited from taking over local real estate businesses that are part of the fabric of our communities.”

A chorus of consumer, community and small business advocates has voiced their support for the bill because they agree that if big banks were allowed to sell or manage real estate, there would be a negative impact on communities across America, leaving home buyers and sellers with fewer choices, higher loan fees and reduced customer service.

Read more: http://www.realtor.org/publicaffairsweb.nsf/Pages/CommChoiceActReintroduced?OpenDocument

THIS is what will drive costs up and service levels down, if it's allowed to happen.

They are harassing the NAR because the NAR is lobbying to keep big banks out of RE.

I'm in RE. I keep up.

[tom_paine]

4. NAR must have forgotten to pay their Bushevik Kickbacks

You gotta pay your bribes, dudes, ESPECIALLY in a Third-World Totalitarian Toilet like Imperial Amerika.

Gotta grease those skids or THE PARTY and THE LEADER will come after you.