Window to the Law: Antitrust for Real Estate Professionals
Window to the Law: Antitrust for Real Estate Professionals
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Competition in today’s real estate market is vibrant, and not only because of record sales and property appreciation. Today’s consumers have extraordinary choice regarding the level of service and price consumers pay for real estate services. And, as the underpinning of competition in the United States, the antitrust laws aim to ensure that consumers continue to have optimum choices at optimum prices.
This Window to the Law addresses how the antitrust laws apply to real estate and will help you avoid the perils of anticompetitive behavior, which can lead to federal and state enforcement, criminal fines and imprisonment, and private plaintiffs seeking huge sums of money in damages.
First and foremost, real estate professionals should always make business decisions unilaterally and independently. The antitrust laws prohibit agreements between competitors that unreasonably restrain trade, including price-fixing and group boycotts. In fact, this type of competition-limiting activity is considered so egregious that courts won’t consider any justification or defense for the behavior.
Any agreement to fix prices is prohibited, and real estate professionals should never agree, expressly or implicitly, with their competitors about matters such as the commission rate charged to consumers or the cooperative compensation they will offer to MLS participants. Real estate professionals should avoid discussing pricing all together and should always make these decisions unilaterally and independently. And remember, commissions are always negotiable.
Similarly, brokers should never agree with other competitors to refuse to deal– or to only deal on certain terms – with another competitor or business. Not only could this violate the ethical obligations under Articles 1 and 3 of the REALTOR® Code of Ethics, group boycotts are prohibited by the antitrust laws.
To avoid antitrust liability keep these best practices in mind:
REALTORS® play a pivotal role in facilitating one of the most important transactions in a consumer’s lifetime, and thanks to REALTORS® participating in the MLS, these local broker marketplaces help ensure buyers and sellers have the greatest access, transparency and choice when it comes to real estate services.
For more information about competition in real estate and related resources, check out competition.realtor.
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