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81 Comments on Talking About Prices
I'm sure I'll be told if I'm wrong here, but my understanding of the "price fixing" type of laws is that if we all got together and said something like we all would charge the same price, that would be price fixing.
If I say I charge X and you say "I charge X+1" and someone else says "I charge X-1" that's just a discussion of business models and practice. People in this business advertise price every day in print, on the web and in mailers. Usually these are in the context of some kind of "discount brokerage model". But since there is no such think as a fixed commission rate, there is no benchmark from which to discount .
I'm sure the FTC guy looked at this in the manner of risk reduction for brokers. I clearly would walk away from any discussion that morphed into talk about all charging the same fee. That clearly would violate the law. But a discussion of business models and services provided should not be a problem.
Why don't they look at Redfin which continually states that 6% is a standard commission. They even use a 3% co-broke as their benchmark in the advertising. Anyone who has been in this business longer than a week knows that there is no "standard commission" in real estate.
I turned on the new comments notification and am awaiting the barrage.
Hey, Fred,
How about sending me "X+2" of those great Hershey bars! They really are awesome, especially when you buy them right from the factory!
Lucky :)
Caleb...You are so right and I appreciate your taking the time to check into this issue and then posting it. The consequences are enormous!
Regards...Jay
It's even harder in that association as most newcomers don't have any idea what to charge, there is no perceived 'standard' in that industry.
UNLESS I AM WAY OFF BASE HERE, THERE IS NO PERCEIVED "STANDARD" IN THE REAL ESTATE INDUSTRY.
I think for my own safety, I will just avoid the issue all together. It's better to be safe than sorry!
Caleb, I know there are many different opinions here, but I for one am glad that you've taken the time to put the word out there again. You're just trying to keep us all from getting.in trouble, and I appreciate your effort.
> Jonathan D. You can't say what you charge to competitors, only to customers. I did not say that advertising prices is a violation of antitrust. I said talking about it with competitors opens you up to the possibility of criminal investigation.
Ummmm ... if you're one of my competitors, kindly close your eyes. My advertising is directed at the public at large. I apologize for the inconvenience.
I see the point if it's a members only post as there's little doubt who the intended party is. But on a general post or (shudder) a post or a website not connected to AR ... I can't stop competitors from looking at my sites. I look at theirs all the time - part of being, well, competitive.
I'm not condoning discussions that border on collusion, Caleb. Never have. But I disagreed with you before and I disagree now with the notion that if I say I charge X, a competitor sees it and they also decide to charge X, then we're price fixing. There's no agreement. There's no intent.
'Thanks for the reminder Caleb.
Seen some pretty astounding statements around AR.
The Q & A has seen a few responses that precisely identify standard commission rates.
Keep working at warning us about ourselves.
Caleb--
It is sad that this is a reminder that is all too necessary. As Realtors, we are held to a higher standard than the general public. There are rules: ability to negotiate on a commission is a private discussion between broker/agent and client.
While some discussions on AR will feel like sitting on your back porch over a beer, they often can be viewed publicly. Other than when our broker has a meeting to set our office rules, I don't discuss what I charge with anyone in my office other than client and manager...The end.
Beyond full service and discount as terms in general, the discussion should end on AR. No percentages should be discussed or eluded to as every market, every neighborhood and every client is different.
Ana. Thank you. But remember this stuff affects all industries, it's not that it's being directed at real estate agents.
Mike, Thanks for the update.
Jonathan, I never said there was intent. I do say that if one engages in a discussion with a competitor on these issues, then they are opening themselves up to the possibility of investigation.
Of course there's nothing wrong with a competitor seeing your advertisement. To insinuate that companies don't shop their competition is ridiculous. What a business wishing to be compliant will not do however, is engage in a discussion of prices, or what they ought to be with a competitor. That is illegal.
A post discussing pricing shouldn't be members only you are right, it should also not be checked "for professionals," and lastly members shouldn't engage.
Mott, There's no big hush, everyone else can talk about it all they want.
Thanks Jay, Jim, Diane, Marc, Lucky, Jason, Sally, Mariana, Joan W, Joan M, Marlene,
Thanks for the extra perspective Christina.
Laurie, I know what you mean about "competitor" and I wonder about that myself. I do know however that it's just as likely that one of the comentors is the competitor next door.
Fred I don't think you've got it and I would encourage you to look further into this. Your assumptions aren't correct as far as I know. I've written the FTC asking about that very question on a company advertising a standard commission rate. Everything I know tells me it's a violation.
Patrick I wish i could get into a philosophical discussion on this. :)
Cynthia, that's what I hope everyone gets from this.
Randy thank you for sharing your experience.
Michelle, they have jurisdiction where laws are being broken in the U.S. I of course don't know about Canadian law and what it says about this.
If anyone has an issue with the law then please take it up with the Justice department this isn't Caleb's law here. :)
Caleb,
Right ON!
But Caleb's Law does have a nice ring to it.
Lucky :)
Suzi,
Thanks for the question. I do think it has more to do with advertising. The thing is "saving" can ultimately end up being pretty subjective. It would really depend upon the specific claims of a specific ad. I know that when I've worked with people, my claims of "saving" them money were about what I could offer them in terms of time, preparation, and negotiations. So regardless of my fee, I knew I was, "saving" them quite a bit.