I just finished teaching the Broker's Core Course, and we had a discussion on Anti-Trust. When I looked back through the archives, I didn't see any previous articles on Anti-Trust, so thought I would refresh your memory on same.

There are several aspects of Anti-Trust that we, as REALTORS^®, must know about. Here's what's covered under Anti-Trust:

1. Price Fixing
2. Boycotting
3. Market Allocation
4. Tying

Let's take a look at each one of these areas of concern.

1. Price Fixing — the practice of setting prices for products or services rather than letting competition in the open market establish those prices. In real estate, price fixing occurs when competing brokers agree to set sales commissions, fees, or management rates.
2. Boycotting — occurs when two or more businesses conspire against another business or agree to withhold their patronage to reduce competition. Group boycotting of a "discount broker," as an example, is illegal!
3. Market Allocation — involves an agreement between brokers to divide their markets and refrain from competing for each other's business.
4. Tying — an arrangement is the conditioning of the sale or purchase of one product to the sale or purchase of another product. This practice is perhaps best exemplified in the real estate industry by the alarmingly common practice known as a "list back" agreement. Under such an agreement, a real estate broker will, for example, condition the sale of lots to a builder on the agreement of such builder to list with the broker the homes built on such lots. Several state and federal courts have found such agreements to be illegal under the Act.

A violation of Anti-Trust is a serious matter. People who fix prices or allocate markets may be subject to a maximum $1 million dollar fine and ten years in prison. For corporations, the penalty may be as high as $100 million dollars.

So don't talk about other company's commission schedules, don't boycott another real estate company because you don't like their commission schedule, don't try to divide markets, and seek legal advice on anything that might be considered tying.

I hope I have raised your level of awareness!

See you next week!
Ronnie REALTOR^®

Back to Ronnie REALTOR^® Archive >>