Selling Home | Flat Fee MLS, For Sale By Owner, Home Buyer Rebates

Minimum Service Laws Called into Question

Mark Tuesday October 25, 2005 in your calendars. The Federal Trade Commission and the Department of Justice are holding an Open to the Public workshop to discuss the effect on Limited Service laws on competition in real estate.

At stake are the rights of consumers to choose the real estate services they want when selling their homes. Backed by the powerful National Association of Realtors (NAR) trade group, lawmakers around the country have been cajoled into passing laws affecting the way real estate brokers may offer "a la carte" or limited services to consumers.

What the DOJ and FTC believe, along with many familiar with the industry, is that the affect of these so called "Consumer Protections" is to limit competition in the marketplace by restricting the types and levels of services brokers are able to offer. For example, the proposed law in Michigan would require real estate brokers to assist sellers in "developing, communicating, negotiating and presenting offers" in real estate transactions. While this may sound like a perfectly normal thing for a real estate broker to do, what it means is that if a seller wants to hire a broker to, say, just list their home in the MLS, the broker would be REQUIRED BY LAW to also provide additional services. Of course this will cost the consumer more money.

What the proponents of these measures are attempting to do is force certain business models to adjust the way they do business, or stop doing business altogether. This is what is called anti-competitive legislation and it’s just what the Department of Justices Anti-Trust division was designed to deter.