States regulate real estate licensees. DOJ, in the name of consumer protection, is playing the bully role again, or are they just plain stupid...or is it part of a larger power grab?

If you think about it, state license law itself is anti competitive because it restricts the number of people who can sell real estate to only those who meet certain requirements as set by the state and states, by restricting the number of people who sell real estate, limit consumers choice.

But real estate license laws were set up to protect consumers, to set standards and consumer expectations, so what is wrong with license law setting minimum standards to protect consumers. In California, no one in their right mind (or no one who truly understands real estate and the liability that goes with selling it) would attempt to do it on their own. I have been a broker and real estate educator for 30 years and as I have not been actively involved in real estate sales since the mid 1990s, the last few properties of my own that I have sold, I did so with the help of a REALTOR.

We always hear from a certain group that consumers dont understand, that they need to be informed, that agents dont do a good job of informing them of their options. So the efforts by states like Texas and Oklahoma and others make sense...but not to DOJ.

Saul

Following from USA Today (June 9, 2005):

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States efforts to regulate industry raise concerns By Sue Kirchhoff and Jayne ODonnell, USA TODAY

While the real estate industry is negotiating with federal antitrust enforcers in Washington about its Internet policies, state measures that would strengthen the industrys hand are also raising antitrust concerns.

The National Association of Realtors does not set national policy on agents

fees or minimum service requirements. (Related: Discounters set sights on traditional real estate market)

But states are stepping in with laws and regulations that supporters say will ensure consumers get the expert advice they need but that detractors say limit competition.

Since late March, the Justice Department has:

• Warned the Texas Real Estate Commission not to pass a regulation that would increase service requirements for real estate agents.

Justice and the Federal Trade Commission said the rule could hurt discounters by forcing consumers to buy services they dont want or need.

 

After receiving a letter from Justice and the FTC, the commission held off on its proposed rule. But the Texas Legislature passed an amendment by Rep.

Joe Pickett, a real estate broker, to set tighter requirements for services that real estate professionals must offer.

• Cautioned the Oklahoma Legislature about a similar effort that it considers anti-competitive. The legislation passed anyway in May and was signed this week by Gov. Brad Henry. 
  
•  Sued Kentuckys Real Estate Commission for barring real estate agents from offering inducements such as rebates.
  
• With the FTC, urged the Alabama Senate and the Missouri governor to reject legislation that would restrict real estate agents ability to offer lower-cost services in those states.
  NAR general counsel Laurie Janik says Realtors efforts have consumers best interests at heart.
  The Texas measure requires real estate brokers to deliver offers to their clients and to answer questions about issues related to a transaction, such as possible counteroffers.

In a recent memo to NAR members, Janik defended their right to lobby for legislative and regulatory action they support - even if the effect of such action would be anti-competitive.

If we dont do it before the laws are passed, we cant protect consumers with an antitrust case.

Offer from Realtors
Meanwhile, Realtors have offered to drop a policy that would have let traditional brokers selectively withhold home listings from the Web sites of certain online brokers. That might be enough to end the antitrust dispute.

But the department could insist on a settlement that bars NAR from ever adopting the old policy. Justice could also sue the group if it concludes that other provisions in NARs policies would make it harder for Web-based brokers to compete.

The NARs proposed policy would bar Internet-only brokers from providing the full home-listing information thats available to consumers who meet in person with agents. Online brokers could use only data that could be contained in a classified ad.

That idea is galling to online brokers. It kind of defeats the purpose of having a virtual office, says Robert Butters, an antitrust lawyer at Arnstein & Lehr who represents online brokers.
 
Web brokers have also complained about an NAR provision that would bar Web sites that generate leads for other brokers for a fee from using multiple listing service home information to drum up leads. Realtors rely on this MLS data to sell homes.

Janik says this provision has been placed on the table with Justice.

But Janik says Realtors deserve the right to limit the benefit of the MLS to people who actually list and sell real estate.