Two weeks ago I discussed the current debate regarding state efforts to limit, or ban, commission rebates and to raise barriers for limited-service brokers, debates now raging in several states.

The column produced a large number of e-mails with an array of perspectives. Some agreed with the general thrust of my comments -- that the case for bans and restrictions in Texas, Oklahoma and Kentucky is not compelling, and that in any case the Justice Department and the Federal Trade Commission should not to be involved in state matters -- while other commentators argued in favor of federal actions and tougher state standards.

Our correspondents are an insightful group and raised a number of observations which deserve comment, airing and response. Here -- with some editing, combining and paraphrasing -- are some of the issues and inferences that have been raised:

Are brokers going to be able to offer MLS access for $500 without any further liability or fiduciary responsibility?

The matter of price is not an issue -- brokers are free to charge whatever they want. There is no law which establishes a price for real estate services.

The matter of broker obligation is different. Whatever services a broker offers, they must be provided within state regulations. In turn, real estate laws define brokerage as acting for another and for a fee in the sale, purchase, rental or management of real estate. Thus brokers typically have agency obligations regarding care, obedience, accountability and loyalty to a client which must be met regardless of what fee is charged or services are offered.

The parallel is this: A gun store cannot just hand out rifles to anyone who walks in the door. There are basic standards to be met simply because the place is licensed to sell guns.

Why should I work with a buyer client for weeks or months and then show a home with a tiny fee? I can't provide full services without getting paid for my experience and professional skills.

Absolutely right. What the seller pays a listing broker is a private matter between them, and should not reduce your ability to earn a living.

However, with a proper buyer brokerage agreement, your fee will be fully paid no matter what property you show or what the listing broker charges.

Our organization represents 750 billion homeowners just in this galaxy. We comment on everything and issue lots of statements to the media. We agree entirely with the Justice Department and FTC. So there.

I don't recall the election -- who exactly says you represent so many homeowners? How many paying members do you currently have? Does your organization have revenues of more than $25,000 a year? If yes, does it post an IRS Form 990 online, a form which details your finances? Please include your current, paid-in-full membership size and where the Form 990 can be read when next you write.

As to the Justice Department and the Federal Trade Commission, when last I looked we have a federal form of government -- that is, a system which includes both a central government and state governments. Individual states have extensive rights to establish their own rules and regulations, otherwise why have states? Moreover, if the federal government is so clever, why is the budget deficit so huge, the borders so porous or the dollar so cheap?

If owners can sell property by themselves, why shouldn't brokers be allowed to offer just a few services that appeal to such sellers? It's a choice for owners to make.

Sellers should have choices, but at the same time brokers -- by virtue of their licensure status and right to represent others for a fee -- must meet certain standards. The question should be whether or not proposed standards effectively limit public choices as well as the right of brokers to freely offer something other than a complete package of services.

Isn't it true that proper and complete disclosures must be made by limited service brokers to eliminate accidental agency?

Sure. And the same standard should apply to all brokers.

I have been involved in deals with brokers who provide minimal services, and believe me when I say that they did not represent their clients' best interest. The world is all ready rife with scam artists and fraud, why would you want to make it even easier?

The issues are different.

First, it's not an either/or matter -- whether there should be standards or there should be no standards, it's that there should be standards which do not needlessly limit marketplace competition.

Second, minimum service brokerage does not equal fraud or scams any more than Enron represents all corporations. There's room in the marketplace for both fast food and expense-account luncheons -- but there's no room for dirty kitchens.

As to those cases where you believe clients were poorly represented, we have vigilant and rapacious trial attorneys ready to extract both justice and cash from wayward brokers. They can do this because such claims, if true, violate existing real estate regulations which apply equally to all brokers.

Let me get this straight. What you're saying is that broker agency obligations to serve the public should always be in place, regardless of what is charged or whether the client is a buyer or seller?

Exactly. For decades we have had brokers who have offered something other than a full package of real estate services as well as a range of fees. There was, and is, a given level of marketplace demand for such brokers.

Despite all the hubbub regarding rebates, menus, discounts, Internet real estate portals and the availability of online forms and information, the basic fact is that local brokerage not only dominates the marketplace, its share in the Internet era has increased.

According to the 2004 Profile Of Home Buyers & Sellers by the National Association of Realtors, self-sellers represented 19 percent of the marketplace in 1991 -- and 14 percent in 2004. That's a 26 percent drop.

Why so much less for-sale-by-owner (FSBO) activity?

While a home is still a home, in recent years the transaction process has become excruciatingly complex, thus the value and need for brokerage services has increased.

It doesn't matter if forms are online when few people understand what they say. The public intuitively realizes that free forms used incorrectly can create more problems than anyone needs.

It doesn't matter if someone has a fancy website that spans the globe. Real estate is a localized commodity. The public can drive down the street and see who is active locally and who isn't.

There's plenty of room for every form of brokerage and every fee arrangement -- as long as everyone who acts as a broker first meets all agency obligations.

As to whether there's also plenty of demand for every form of brokerage and every fee arrangement, that's something the marketplace should determine.

For more articles by Peter G. Miller, please press here.

Published: May 10, 2005

Use of this article without permission is a violation of federal copyright laws.

Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .