Realtors® Make Too Much Money says the Antitrust Division of the Department of Justice

Real Estate Agent with Sherman Smith & Associates 00682119

Excerpt From CAR 

The Antitrust Division of the U.S. Dept. of Justice launched a new Web site this week aimed at educating consumers about the benefits of competition within the real estate brokerage sector. The site, which is drawing heavy criticism from the real estate industry, offers user tools, such as a calculator to help consumers assess potential savings, maps of states with laws in place that the DOJ says inhibit competition within the industry, and links to government resource sites.

NAR characterized the site as a "flagrant disregard" for free competition, saying the Web site is being used as a promotional tool by the DOJ to push for a single, discounted brokerage services model, threatening to cut agent commissions in the process.

"The real estate market is very competitive," said NAR officials. "NAR encourages innovation and fair competition in real estate brokerage, and favors no business model." In addition, NAR added that real estate commissions remain negotiable across all sectors, driven by market forces to "attract clients and retain the best agents."

Here is the U.S. Dept. of Justice Release.


(202) 514-2007
TDD (202) 514-1888



WASHINGTON -- The Antitrust Division of the Department of Justice launched a new Web site today to educate consumers and policymakers about the potential benefits that competition can bring to consumers of real estate brokerage services and the barriers that inhibit that competition. Among its features, the Web site includes maps identifying states with real estate laws that can inhibit competition, a calculator to help consumers tally their potential savings when brokers pursuing new business models compete for their business, and links to additional government resources. The address is:

"Buying or selling a home is the largest financial transaction most Americans will ever undertake," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division. "This Web site will help consumers and policymakers understand the benefits of increased competition among real estate agents."

The estimated median commission paid by home sellers in 2006 was $11,672, according to the Antitrust Division. New real estate brokerage models have the potential to reduce that amount by thousands of dollars. For example, in states that allow open competition, some buyer's brokers rebate up to two-thirds of their commission to the customer, and some seller's brokers offer limited-service packages that let sellers list their homes on the local multiple listing service (MLS) for as little as a few hundred dollars.

Excerpt from their website

Home Prices and Commissions over Time

Brokers typically charge a commission based on a percentage of the home's sale price. Over the past decade the average commission rate has remained relatively steady between 5.0 and 5.5 percent. As a result, the actual median commission paid by consumers rose sharply along with the run-up in home prices.

Unless broker costs were also rising sharply during this period of time, competition among brokers should have held commissions in check even as home prices were rising.


Realtors® income rose 22% over the last 10 years.

Chart Non-supervisory Workers ( The Average Joe on The Street)


Non-supervisory workers income rose 33 to38% over the last 10 years

Our goverment is saying that it is ok for the average Joe to get a 33 to 38% raise over 10 years but if you are a Realtor® a 22% raise over 10 years is gouging the public and there needs to be more competition. I bet you the Antitrust Division of the Department of Justice received a raise larger than 22% over 10 years! What do you think?

Sherman Smith

Sherman Smith & Associates

(714) 544-5445 or






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Lynda Eisenmann
Preferred Home Brokers - Brea, CA
Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co

Hey Sherman,

Interesting info, thanks for the heads up. And you're right I would presume the folks at the DOJ would have a different opinion if it were their paychecks!

Oct 18, 2007 02:59 PM #1
Eric Bouler
Gardner Realtors, Licensed in La. - New Orleans, LA
Listening to your Needs
Lets see graphs on the retirement income of federal workers, Do they know what self-employed do for a living.  
Oct 18, 2007 03:31 PM #2
Carolyn Galant
Coldwell Banker Residential - Madison, NJ
MBA - Coldwell Banker - New Jersey Real Estate

Maybe they should look at the Foxtons Model-- discourage co brokeing deals sure worked for them!

They are in bankrupcty now.

Someone should educate DOJ. it is like those two guys from U of Chicago ( do I have the school correct)

who wrote a study that concluded consumers netted less with agents than selling themselves. How about not selling it all--that is what selling FSBO is. Homesellers commissions have to subsidize free looking by buyers, and buyers don't just buy houses, it is an interactive process.


How about we just work 10-4 and not try too hard, not email in the evening or the morning, no OPEN HOUSES, no previewing, just work from a list. You want the house, fine, you don't want it that is o.k. too. Oops, we are out of time. Here is the sheet of reale estate questions and answers, if you have any others, go on real estate I can't go back to the office now, it is 8 miles away. My work day is over. Let's set something up for tomorow I have a half hour  for you.  Here is the website for filling out the contract, bring it back tomorrow and I will submit it for you. Got the idea?

Oct 18, 2007 03:34 PM #3
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate

Sherman - Thanks so much for this post.  It's always interesting to note that when we point a finger at someone else, there are three pointing back at us.  The last paragraph of the article sure tells it like it is.  There are many hard-working government employees.  But, it would be nice to have some of the DOJ employees shadow a few REALTORS for a couple of days and at the end of the week get to enjoy a paycheck or no pay check depending on the week.  It would be fun to see them pay their bills, Social Security (which many do not contribute to) health insurance, life insurance, taxes, overhead...oh my, this is making me hostile.  I'd better quit here. 

Thanks for the research and the update on what the DOJ info.

Oct 19, 2007 02:58 AM #4
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