Monday, July 25, 2005
Paying Less For Real Estate Help: What Can Make It Happen?
Answer: Send your lawmakers the new AEI-Brookings Joint Center report.
A new policy analysis by the Joint Center starts off with:
“We find that the traditional model for residential real estate brokerage services may be dated, and could be improved substantially with some public policy interventions that spur innovation.
“We believe that there are numerous barriers to entry that are slowing the emergence of new models for serving consumers. Some of these barriers are likely to be anti-competitve. Examples include discrimination against new brokerage models and online brokers who wish to join multiple listing services; state legislation that would require minimum service requirements, effectively preventing “a la carte” offerings; and prohibitions by real estate commissions on providing rebates to customers. In our opinion, none of these practices should be allowed.”
Written by academic analysts from Stanford, MIT, University of Maryland, Harvard, University of Chicago, and others, the report comes to 3 main policy recommendations:
- Federal and state antitrust authorities should carefully scrutinize efforts to limit competition in the residential real estate brokerage market.
- State governments should refrain from adopting laws or rules that inhibit competition in real estate brokerage.
- Congress should allow the Federal Reserve Board and the Treasury Department to permit banks to offer residential real estate brokerage services through separately capitalized affiliates.
I’m not so sure about #3, but the first 2 are right on.
The 24-page report delves deeper than most people would want to get, but if you’re interested you can read the entire report here.
If you, like me, are a concerned consumer, make sure your lawmakers get this report - especially if you live in a state considering new real estate policy. Because…
“We do not know which business models are likely to succeed in the marketplace for residential real estate services in the future. We do believe, however, that judicious public policy interventions could have a marked impact on improving services and lowering costs for home buyers and sellers.”
And we also believe we don’t want the National Association of Realtors (NAR) deciding which models will succeed in the marketplace.
~Robert Creek
The FSBO Blog
