Entry by Lester Langdon

From the Dept of Justice - Competition and Real Estate


Competition and Real Estate


The Importance of Competition in Real Estate to Consumers

Buying or selling a home is the largest financial transaction most Americans will ever undertake. The median priced home cost $184,334* in 2009, and the median commission paid to real estate brokers came to $9,733**. Overall, Americans paid nearly $60 billion for brokerage services.

Home prices and commissions over time


More Competition Could Reduce Commissions

New business models are emerging that allow consumers to save thousands of dollars when they buy or sell a home. Where these practices are allowed, some buyers’ brokers are offering refunds on commissions, and some sellers’ brokers are charging only for services actually used.

Barriers to a More Competitive Brokerage Market

Ten states forbid buyers’ brokers from rebating a portion of the sales commission to the consumer. Eight states require consumers to buy more services from sellers’ brokers than they may want, with no option to waive the extra items. HUD recently clarified its rule that rebates are permissible under RESPA as long as they are reported on the HUD-1 form.

Other Problems Consumers Face

Some states require real estate closings to be done by lawyers, reducing competition and raising costs. Competition also suffers when brokers exclude low-cost rivals from the multiple listing service (MLS), which limits price competition.

Additional Resources

Government hearings and reports on competition in the brokerage industry

Competition in real estate: Questions and answers

Department of Justice enforcement actions to protect competition

How to Contact the Antitrust Division

If you have questions or comments about competition in the real estate industry or if you have information concerning anticompetitive conduct, e-mail the Antitrust Division.



Thanks for posting this link and the article. It answered a lot of questions for me.

Great Article Lester.

great find lester  thanks

Does anyone else think there is a mistake in the commission savings chart?  A buyer agent rebate does not result in a savings to a seller on commission.  The seller is still paying the same amount to the buyer's agent and the buyer's agent is rebating their fee to the buyer.  The chart seems to indicate that the rebate is a savings to the seller. 

How does a consumer save $6200 when three different scenarios are presented in one chart? 

Just wondering if I'm reading the chart wrong or the DOJ has mixed apples and oranges in one chart?

This page contains a single entry by Lester Langdon published on July 31, 2011 11:15 AM.

Alternative Compensation Models: Quick Math was the previous entry in this blog.

Strategic Alliance with property management companies ? is the next entry in this blog.

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