Per Se Antitrust Actions in the Real Estate Brokerage Business

This is the big boy of real estate per se antitrust offenses. If two or more companies or brokerages agree to set their pricing or commission rates, they have violated the law and the penalties can be severe.

Agents and brokers in any setting, business or social, should take great care to never even discuss commission rates in any context. It's much better to be safe than sorry in this case.

With new real estate business and commission pricing models being tried all the time, most agents or brokers have experienced a competitor in their market doing some type of commission discounting, fee for service or other types of alternative pricing models for real estate services.

A couple of brokers are having lunch and discuss the new commission discounting company in town. They both agree that it's a bad thing for business and that they're not going to show that broker's discounted listings. They've probably guilty of a per se offense and couldn't even argue otherwise in court.

In many areas, the newspaper business has contracted to one major daily or weekly publication in each market area. There are real estate agents and brokers that lament the lack of competition and the high advertising costs.

If a group of the local real estate offices grouped together, even very informally, and pulled their advertising in an effort to force a change of policies and/or advertising rates on the newspaper, they would most likely be guilty of a per se offense of the antitrust statutes.

The traditional compensation model in real estate is for the seller to agree to a commission amount with the listing broker. This broker would place the property into the MLS and offer a certain split of the commission to cooperating brokers or agents that successfully bring a buyer.

Any agreements between companies that would attempt to set or control the amount or percentage of the splits offered in a market would very likely be a per se violation of antitrust statutes.

Any agreements between companies that would attempt to fix the minimum or maximum time frame for listings or just about any other contractual items in a listing agreement would likely be per se violations also.

This is a variation on the boycott idea. Let's say that the competitor is discounting commissions and several companies or brokers agree that they'll allow that competitor to show their listings, but set a different coop rate for this competitor because they don't like the limited service model they're working with. This would also very likely be deemed a per se offense.

The predominant model for doing real estate representation has been around for quite a while. There has been time for ample court case history and decisions to form pretty clear parameters for what is a per se violation of the antitrust statutes.

Remember, it's considered a per se offense when the government has deemed it definite and egregious damage to the free trade of another. A per se violator cannot even present a defense as to whether it was damaging, whether it restrained trade or not. They're only left with whether they committed the offense or not. If they did, in this instance, they're dead.

If you're in a meeting or even a social gathering, and the conversation turns toward any of these topics, you should leave the area immediately. It would probably also be wise to make it known that the possibility of violation is why you're leaving.