Window to the Law: Antitrust for Real Estate Professionals

Window to the Law: Antitrust for Real Estate Professionals

Mar 10, 2022
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The antitrust laws ensure that competition remains vibrant for the benefit of consumers and competitors alike. Real estate professionals should understand how to avoid anticompetitive behavior in order to avoid antitrust scrutiny and best serve consumers in their quest for homeownership.

Window to the Law: Antitrust for Real Estate Professionals - Transcript

Competition in today’s real estate market is vibrant, and not only because of record sales and property appreciation.  Today’s consumers have extraordinary choice regarding the level of service and price consumers pay for real estate services.  And, as the underpinning of competition in the United States, the antitrust laws aim to ensure that consumers continue to have optimum choices at optimum prices.

This Window to the Law addresses how the antitrust laws apply to real estate and will help you avoid the perils of anticompetitive behavior, which can lead to federal and state enforcement, criminal fines and imprisonment, and private plaintiffs seeking huge sums of money in damages.

First and foremost, real estate professionals should always make business decisions unilaterally and independently.  The antitrust laws prohibit agreements between competitors that unreasonably restrain trade, including price-fixing and group boycotts.  In fact, this type of competition-limiting activity is considered so egregious that courts won’t consider any justification or defense for the behavior.

Any agreement to fix prices is prohibited, and real estate professionals should never agree, expressly or implicitly, with their competitors about matters such as the commission rate charged to consumers or the cooperative compensation they will offer to MLS participants.  Real estate professionals should avoid discussing pricing all together and should always make these decisions unilaterally and independently.  And remember, commissions are always negotiable.

Similarly, brokers should never agree with other competitors to refuse to deal– or to only deal on certain terms – with another competitor or business.  Not only could this violate the ethical obligations under Articles 1 and 3 of the REALTOR® Code of Ethics, group boycotts are prohibited by the antitrust laws. 

To avoid antitrust liability keep these best practices in mind:

  • Do not agree to fix pricing with competitors.
  • Do not agree with competitors to boycott or refuse to deal with another broker or business.
  • Do not agree with competitors to divide up markets, customers or practice areas.  Market allocation agreements, such as “you take listings on the east side of town and I’ll take listings on the west side” are generally illegal.
  • Brokers may be held liable for the anticompetitive behavior of their salespeople and staff.  Implement a written antitrust compliance program and regularly educate salespeople and staff about the antitrust laws.
  • Never contribute to anticompetitive discussions - whether in-person or online.  If you find yourself in a meeting or conversation where anticompetitive behavior occurs, make your objection clear by leaving the meeting and ask that your objection be recorded in the minutes or document it in a follow-up email.

REALTORS® play a pivotal role in facilitating one of the most important transactions in a consumer’s lifetime, and thanks to REALTORS® participating in the MLS, these local broker marketplaces help ensure buyers and sellers have the greatest access, transparency and choice when it comes to real estate services.

For more information about competition in real estate and related resources, check out competition.realtor.

Additional Resources

Consumer Infographics

Share these infographics with clients to help educate them about the value that you bring to the transaction. 

Economics of Buying a Home 
The Essential Real Estate
3 Ways to Maximize the Value of your Real Estate Agent
More

Publications

These publications, and more, are available from the REALTOR® Store.

Antitrust Pocket Guide for REALTORS®

This 40-page brochure designed specifically for real estate licensees offers information and examples on specifically how antitrust impacts current real estate practices.

Download the brochure

Antitrust 101 Video

This video serves as an educational tool that both brokers and associations can use to educate other real estate professionals about antitrust laws, including the severe penalties for violating antitrust law.

Download the video

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