Wednesday, June 20, 2007

Realtors and antitrust Realtors and antitrust

Probably some 20+ years from when I first acquired a real estate license, I formally was sworn in as a "Realtor" yesterday, after a day long training session. This meant that I formally joined the National, Colorado, and local Board of Realtors. While in some states, joining is mandatory, in Colorado it is not, and only about 2/3 of the brokers are members.

Much of that training was in ethics, and in particular, the ethics standards of the National Board of Realtors (NAR). For the most part, nothing that unexpected. Interestingly, the NAR standards are not that different from the Colorado state standards for RE brokers, except that in several places Colorado has gone further, and indeed, overrides the NAR standards. So, there are apparently several places in the NAR standards that apply to 49 states (plus presumably D.C.), but not here. These mostly have to do with Realtor relationships with each other.

As noted, there was little surprising throughout most of the presentation. But the end of it involved a section on antitrust and price fixing. This was brought home by an example of two single mothers who got a little drunk, compared commission rates charged customers, and were ultimately sentenced to prison when their kids are old enough - in apparently another three years. And, esp. troubling to me, the attorney who accidentally overheard them and didn't turn them in, was suspended from the practice of law for six months.

Colorado has been somewhere in the front as far as negotiable commission schedules. I talk to people in other states who are surprised that our state RE commission doesn't set commissions. It doesn't, and those utilizing the services of RE professionals benefit. Indeed, this is becoming the Wild West here, with some brokers charging separately for different services, most often on a flat fee basis.

Maybe we, as RE brokers here in CO, might be safer if we were back with state mandated commission rates. But that is the point here - the customers wouldn't be better off. Fixed fees benefit the members of the guild. Negotiable fees benefit the customers.

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