Billy Joel once sang "I am an innocent man." That was before the crazy driving, but still ... 

Yesterday the assertion was made that we as real-estate professionals are forbidden from discussing what commissions we charge with each other. The concern was by making this information public, we are planting the seed for a price-fixing scheme as others in our local area can see what we charge and match that number.

As I watched the comments roll in, I was amazed by the sideways turn the discussion took and also by the amount of information, both right and wrong, being posted as the gospel truth. There even was a link to Realtor magazine's online quiz, where many of the answers are given - and contrary comments continued on. And so here I'm responding in true gangsta rap fashion, with a response blog post of my own. (Westside!! - that was for Michelle and Jay and my East Valley homies.)

I'll add the disclaimer that I'm not an attorney so don't construe this as legal advice. But I do have the ability to think logically and step outside the argument to see the larger picture.

1) Any discussions between brokers and salespersons of competing firms, planned, agreed upon, explicit, or implicit, regarding pricing or production can result in an investigation and serious penalties.

That part is correct. Price-fixing - bad. On this we all agree.

2) On your AR blog: Do not discuss agree or imply anything regarding commissions, rates, fees charged or paid, formally or informally

I'm not seeing this as black and white. If you post to "Members Only" or to the "Real Estate Professionals" category, then this practice can be construed as problematic. But if you're posting to the general blogosphere, where the general public (and prospective clients) can see the information, I would view this as advertising.

And contrary to the comments claiming you can't advertise your commission rates, you absolutely can. Check the Realtor magazine online quiz. If you want to take the quiz yourself, skip past this spoiler, but here's the exact text about advertising: The prohibition on price fixing forbids agreements among competitors on prices, such as real estate listing commission rates, including commission splits. The law does not preclude a competitor who establishes its commission rate unilaterally and without agreement with other companies from advertising that commission rate. The law also allows that competitor to engage in competitive advertising, in which the company explicitly compares its stated commission rate to the rates publicly promoted or advertised by other firms, provided that the advertising was truthful and not misleading. In fact, the policy underlying antitrust laws — promotion of vigorous and healthy competition — would tend to favor and encourage such comparative advertising since it helps consumers easily compare and contrast prices offered by various companies (emphasis added).

They stole my argument, but I'll take the time to paraphrase and reiterate. Advertising a commission rate does not violate anti-trust laws. It does not restrict trade. It encourages - encourages - competition.

Two real estate agents who charge the same amount and who arrive at that amount of their own accord are not fixing prices. If one agent advertises a 4% commission and three others reduce their rates to match, that isn't price fixing. It's basic market mechanics. It's four people trying to remain competitive. The first agent didn't set his rate with the thought of dragging down commissions across town; he or she made a business decision and probably doesn't want to see a lot of competitors match that rate.

Also, a broker is allowed to set a commission structure within which they expect their independent contractors to work. As was pointed out on the original post, my company has a structure in which the commission splits change if a deeply, deeply discounted commission is offered (in comparison to my company's standard rates.) I'm not here to defend my broker - he doesn't need my defense. But when all of us signed our agreements to work for this company as independent contractors, we were made aware of this policy. Needless to say, if an agent had a business plan calling for commission rates below this stated level, this might not have been a good fit.

The good news is there are hundreds of other brokers for whom they can work - they may not receive the same level of training, administrative support, technology support or the vast pool of knowledge I enjoy where I am - but there are other places they can go.

And there's nothing wrong with that either ...