Feds Call Out the Realtor Cartel

“Realtors” have long colluded with state legislatures and regulators to maintain their cartel at the expense of consumers.  The U.S. Department of Justice together with the Federal Trade Commission issued a report, “Competition in the Real Estate Brokerage Industry.”  As summarized in their press release:

The review by the Department and the FTC suggests that, although the real estate industry has undergone a number of substantial changes in recent years — particularly as a result of technological advances such as the Internet — competition in the industry has been hindered as a result of actions taken by some real estate brokers acting through multiple listing services and the National Association of Realtors, state legislatures, and state real estate commissions.

The report is particularly critical of “three types of restraints imposed by state laws and regulations that are likely to reduce competition and consumer choice in the real estate brokerage industry: anti-rebate laws and regulations; minimum-service requirements; and overly broad licensing requirements.”

3 thoughts on “Feds Call Out the Realtor Cartel

  1. Feds just cracked another pillar of the realtor cartel:

    A federal judge in Kentucky last week ruled that state’s “turf law” unconstitutional, saying it makes it difficult for real-estate brokers from outside the state to do business in Kentucky, violating the commerce clause.

    The decision could affect laws in nine other states, including Texas and Pennsylvania, which have similar rules, says Harvey Green, chief executive of Marcus & Millichap Real Estate Investment Services, a plaintiff in the lawsuit against the Kentucky Real Estate Commission.

    The Kentucky turf law says brokers must be licensed in Kentucky to do any business there. That has meant that a broker in a national firm such as Marcus & Millichap, Encino, Calif., couldn’t share information with others outside the state even if they were members of the same firm.

    KREC, which enforces the law, had said requiring Kentucky licenses helps prevent real-estate fraud. In a brief, the Kentucky Association of Realtors warned that if brokers without Kentucky licenses were allowed in, “all of the evils that man can muster will be unleashed upon the people of Kentucky.”

  2. This sure is a dirty business. WSJ reports title insurers are finally being busted for collusion.

    For some reason the closing quote to that article didn’t make it online:

    In an interview, Douglas Miller, co-owner of an independent title-insurance agency in Minneapolis, agreed. “Reverse competition, referrals and kickbacks are driving up closing costs, and homeowners are paying for it,” he said. “Consumers need to know that they can shop around.”

    Caveat emptor.

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