In a new report titled "How The Real Estate Cartel Harms Consumers and How Consumers Can Protect Themselves," the Consumer Federation of America (CFA), Executive Director Stephen Brobeck and co-author Patrick Woodall attack the real estate industry and attempt to inform consumers how to knock off commission points.

While admitting that traditional real estate brokers "perform a useful service" and have established a system that is very convenient for buyers and sellers (otherwise known as cooperation, which no law on earth requires them to do) the report goes on to say that traditional brokers act as a price-setting cartel that "maximizes the opportunities to charge a fixed commission of either 6 percent or 7 percent depending on the local real estate market."

Huh? Talk about no good deed going unpunished. You set up a system for cooperation and now you're a cartel.

Complaining about the continued prevalence of "across-the-board" 6 percent or 7 percent commissions, the CFA supposes that:

• Novice brokers should not be paid the same as experienced brokers

• Facilitators should not receive the same compensation as agents who agree to represent the interests of either party

• Brokerage services on an $800,000 house should not be four times what they are on a $200,000 house

• "Double-dipping" brokers don't deserve $24,000 compensation on the sale of a $400,000 house.

• Other countries brokerage services are far less

Conflicting reports from Real Trends in 2003 and the National Association of Realtors in 2006 say that commissions are averaging much lower, 5.1 percent respectively and between 4.3 and 5.3 percent respectively, but the report only hints at these changes, preferring to complain that a decade ago, "all traditional brokers offered their services for either 6 percent or 7 percent commission, depending on the prevailing "target rate" in their local real estate market. The report grudgingly admits that average commission prices are closer to 5 percent, but only because "home sellers are beginning to negotiate price with traditional brokers."

Then what's the problem?

Preoccupation with the double-dip, says the CFA, even obsession. Traditional brokers maintain their hold on the real estate industry through such nefarious means as:

• Promoting their own listings

• Pocketing listings to try to sell them before putting them into the MLS

• Getting sellers to pay the listing agent's commission who then offers to split it with the buyer's agent

• Discriminating against nontraditional brokers

• Monopolizing listings online with such services as Realtor.com

• Consumers shop for homes infrequently and may be ignorant that they can negotiate commissions

As a solution, the CFA proposes that consumers should ask if a broker represents their financial interests, or the other party's.

The CFA also says that consumers never hesitate to negotiate lower fees.

Found on the Realtor.com blog was this anonymous reply:

Cut and Paste Job

With apologies to Yogi Berra, it was deja vu all over again June 19 when the Consumer Federation of America called a news conference to release a little report called "The Brokerage Cartel."

The title rang a bell.

The real estate business is "the last functioning cartel in America" the head of the CFA said in a report released in …1991. Fifteen years ago CFA's Steve Brobeck had five recommendations that would"dramatically increase competition."

First, he recommended that agents should be required to disclose that they represent the interest of the seller. Agency disclosure is now the law in virtually every state.

Second, "buyers, for a reasonable fee, should be allowed direct access to multiple-listing services so they could contact sellers' agents directly." Third was to eliminate the display of commissions on the MLS because Brobeck contended they influenced whether or not buyers' agents would show their clients certain listings.

The industry's investment in Internet has made both those recommendations obsolete. Consumers can see almost all the properties for sale in America from their desktops for free as a result of the massive investment the industry has made in the Internet, including NAR's policies making listings available for display on competing brokers' websites. And buyers can ask their agents to show them any house they want to see. Whether or not commissions are displayed on the MLS no longer has no bearing on whether a buyer can find a property on the Internet. Three out of four homebuyers use the Internet today.

Brobeck also wanted to require buyers and sellers to contract separately for the services of an agent. In the past fifteen years, buyer brokerage has become the fastest growing specialty in real estate. Eighty-six percent of all buyers of existing homes now use an agent. Problem solved.

Number five? "Home buyers and sellers must increase their understanding of the value of these services, the necessity of comparison shopping and their ability to negotiate with agents or to act as their own agents. Only then will residential real estate markets become truly competitive."

No argument that there is work to be done. Seventy-four percent of sellers and 64 percent of buyers still talk to only one professional before making a decision.

Few industries can boast such dramatic change in fifteen years. It's hard to understand why Brobeck would again use the word "cartel" to describe an industry that's done everything he advocated. Either Brobeck's recommendations were way off base in the first place or perhaps it's easier to cut and paste old rhetoric to dress up a whole new set of recommendations in hopes that no one will hold him accountable for acknowledging the tremendous progress that has been achieved.

What is the National Association of Realtors' official response?

"America's real estate industry is one of the most competitive business environments in the world, characterized by low barriers to entry, intense personal client service and a results-based compensation structure. Real estate consumers can choose from nearly 80,000 real estate brokerages and more than 2 million real estate licensees, more than 1.3 million of whom are Realtors. Competition is fierce. In fact, discount brokerages and many innovative business models are doing very well today and the average real estate commission, as computed by Real Trends, has fallen from 5.5 percent in 1998 to 5.1 percent in 2003.

"The real estate industry has been effectively harnessing the Internet for years, to the benefit of sellers and buyers alike. About three out of four buyers today use the Internet to search for homes, and those using the Internet are more likely to work with a professional than those who do not. No other industry in the world has virtually its entire inventory on line at one site, but you can find more than 2.2 million homes for sale at Realtor.com, which has seven million unique visitors each month. The industry has made a multi-million dollar investment to create the infrastructure and provide the security to protect homeowners' data.

"Real estate is a local business and it has always been regulated at the state level. Adding another level of regulation at the federal level could add cost and stifle innovation. Consumers are better served by effective state regulation closer to local real estate markets than they would by Washington regulators."

No new information, no sources. This report begs the question, if as the NAR says it's made many strides of change in 15 years, why did you send this report out now, CFA?