Pat Kennedy - Your Washington, DC Real Estate Connection

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Calling Active Rain Real Estate Attorneys! Anti-Trust Issues and Blogging

Sometime back in the 1970's a group of Washington, DC's leading real estate brokerage owners met at a country club somewhere in the suburbs to talk about the pesky trend of commission cutting.  According to myth, there was someone within earshot who ratted them out to the Department of Justice, and they got into trouble for price fixing.  For years after that, each of the sales managers in each of their branch offices had to include a brief lecture about how it was a total no-no for us to discuss any aspect of brokerage fees with anyone from another company, unless it related to questions about the coop commission offerred on a specific listing.


I've noticed in reading through some of the Active Rain blogs that some agents are using the forum to discuss not only what they offer as coop splits, but also what they charge their sellers.  Could any of hte real estate attorneys on Active Rain tell us if doing so could get us into trouble with the anti-trust police?

Thanks.
Comment balloon 7 commentsPatricia Kennedy • July 01 2007 01:03PM

Comments

Patricia, I own a small discount real estate company and have written on here about my business model and how we charge.  I don't see how that could possibly be in violation of the law as long as I'm not colluding to set prices in a market.  

If you and I were sitting in a restaurant talking about how I charged my flat-fee and you told me that you charge a percentage based commission.  We would be fine.  Now, if I told you that I was charging a flat-fee and you told me that you would match my commission if I agreed to not lower it again.  That would be collusion.  

Colluding is teaming up to set a price.  That is illegal.  Talking about how we charge and even what we charge is okay, as long as it's not in an effort to fix a price.  That's not to say that it might not be better to error to the conservative and simply not talk about commissions at all.

 

Bob Mitchell

ValueList Real Estate Services, Inc.   

Posted by R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham, Bob Mitchell (NMLS#1046286) (Bank of England (NMLS#418481)) about 13 years ago

The Active Rain folks are on top of this matter.

http://activerain.com/blogsview/101899/Talking-About-Prices

I was acquainted with one of the brokers who was prosecuted by FTC back in the 1980s.  It was in Prince George's County, MD.  They attempted to fix commissions among themselves. 

I unsubscribed from RealTalk and ePROTalk some weeks ago because of discussion among agents about specific commissions. 

Too risky and the forum moderators ignored it. 

Active Rain management did NOT ignore the matter and warned everyone. 

I don't believe you have to "collude" to fix prices to violate anti-trust laws.  The mere "discussion" of fees, commissions among agents and/or brokers is dangerous. 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 13 years ago

pk,

caleb is the man to speak to here..

Posted by Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission. (Florida List For Less Realty, Inc. Broker/Owner. ) about 13 years ago
I think an honest, open forum is the best servant for the entire community and the consumer as well.  I don't believe in talks about "I won't if you won't" but I do believe that a little more transparancy is needed in this arena!
Posted by Chris Tesch, College Station, Texas Real Estate (RE/MAX Bryan-College Station) about 13 years ago

Let me first say that I believe the Feds are too over reaching in their approach to anti trust and the real estate industry in general.  I believe that the best way to resolve the issues of some of the new business models is in face to face discussions within the industry other than in the courts or at congressional hearings.

That said, the government does not feel that way, and I am no Don Quixote.

Beyond that Active Rain has been very gracious in providing a free, no cost, we don't have to pay for it, forum for our industry, and as a guest at the party, my place is to exercise good manners, and respect the host and other attendees at the party.  Simple good manners.  Of course reading some of the other posts I gather that poor behavior and bad manners among agents is a big problem.

You are so right, even if we can't be professional here we should at least exercise respect and good manners for the careers of those of us who are professionals.

 Great point, thanks for posting this reminder.

Posted by Dan Homan (Coldwell Banker Ellison Realty, Inc) about 13 years ago
Don, I don't think this question is about manners.  During the late 1980's, I was a manager for one of the firms involved, so I am probably a whole lot more aware of this stuff than most people - I worked under a court order that said I had to conduct 4 sales meetings a year about anti trust no-no's.  I also practice in Washington, DC and some of my favorite clients have been anti trust lawyers.  In most parts of the country, agents are understandably less informed than I am because it's something they don't run into in a typical day, or even a typical career.  

Having said that, I hope I'm doing my part to raise an issue that will keep the feds out of our hair!
Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) about 13 years ago
Patricia:  I have wondered about this issue also so I am glad you brought it up. 
Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) about 13 years ago

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