There are five major groups that are trying to put Realtors out of business, and the Department of Justice is one of them. I say Realtors because it is members of the National Association of Realtors who share data with each other through rules established by their associations and multiple listing services.

The Department of Justice, as I have written many times, would like to see multiple listings services treated like public utilities.

To that end, the Antitrust Division of the DOJ has launched a new website with the intent and purpose of seeing that Realtor commissions come down hard.

They say the site is designed 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," but make no mistake - it's about bodyslamming your commissions.

Among the site's features are "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."

"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 website will help consumers and policymakers understand the benefits of increased competition among real estate agents."

What the site does not do is help buyers and sellers understand risk. Just ask Foxton's customers, whose contracts are being sold off to the higher bidder in a bankruptcy proceeding.

The site does not help consumers understand the service issues underlying the real estate industry, that can neither be quantified or necessarily identified. How do you put a price on watering your client's yard while they're out of town so the home continues to show well?

The estimated median commission paid by home sellers in 2006 was $11,672, according to the Antitrust Division, up from $9,110 in 2001 as the industry basked in the greatest housing boom in recent history. But the DOJ also piously says, "Unless broker costs were also rising sharply during this period of time, competition among brokers should also have held commissions in check even as home prices were rising."

First, the DOJ isn't considering the increased costs of competition, largely driven by the companies that have gone whining and crying to the DOJ over competitive issues.

The average agent can't afford Google ad words, because third-parties with business models to get between real estate consumers and agents are making sure they're at the top of the list.

What's wrong with the DOJ's logic is that profits should be linked to costs, a constraint the DOJ doesn't impose on any other industry.

Otherwise, the DOJ would be investigating every company with rising prices and examining market costs.

How about looking at cable and satellite providers? There's more competition than ever, but my bill surely hasn't gone down and every channel is so crowded with advertisers there's little programming to watch. Wasn't cable originally sold to the public as "advertising-free?" What happened to that promise?

And as long as we're on hearth and home, why is milk so expensive? There are plenty of cows, aren't there? And what about clothes? The Gap should be giving away jeans by now.

In fact, the DOJ is going to unprecedented lengths to provide what amounts to free advertising to "new real estate brokerage models" with the "potential to reduce that amount by thousands of dollars." The DOJ goes on to say, "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."

Huh? Am I seeing things? Since when did selling real estate become a government sponsored enterprise?

Most of the DOJ's fury seems aimed at states that it claims have passed laws "making it illegal for brokers to offer rebates, or requiring them to offer a full package of traditional services regardless whether all consumers want them." The Antitrust Division Web site contains data showing that if these sorts of barriers to competition were eliminated, consumers could save thousands of dollars in real estate commissions when selling one home and buying another.

Real estate is regulated by the states. Each state has the right to enforce its broker licensing laws. There should be no law which forces brokers to share listings in any environment in which they aren't comfortable, including on the Website of any competitor.

MLSs are broker cooperatives, not consumer shopping centers, unless the MLS provides feeds for such sharing. But there's no environment in the world where one company will allow another company to disparage or discount its business model while using the first company's inventory.

Imagine Neiman Marcus and Saks Fifth Avenue sharing their inventories of Versace evening gowns online. When one company makes a sale, they pay a commission to the other. Because the inventory is more complete, more shoppers use the Neiman Marcus-Saks website. But let's imagine that Saks wants a bigger cut of the business, so they start to say, "Psst. If you buy from Saks, we'll knock 30 percent off the gown." Just how long do you think Neiman's would continue to cooperate with Saks after that? That's why they don't cooperate now, and never will, yet the DOJ expects different behavior from the real estate industry. Why?

This is a dangerous game for the DOJ to play. Many in the industry are grousing that they don't need to share listings to survive. Look at the traction franchises have, for example. Realogy could easily pull their listings out of every state and put them all online and attract a large share of customers without cooperating with other brokers. Then Re/Max could follow suit. Then the big independents under the Realty Alliance could do the same.

Instead of uniting the industry, the DOJ could well pull it apart with its interference. There's no other industry that shares inventory between competitors like the real estate industry.

The site says that consumers should be able to buy and sell homes with the same ease as buying an airline ticket or stocks, but that's laughable. Those are commodities that are the same. Each issue of stock is the same share as another, while homes are wildly individual.

What's missing most from the DOJ site is a fair and balanced view of full-service brokers who have every right to charge full-service fees for their work, just like anyone else in this capitalist nation.

There's an end-game here and it's not helping little discount brokers compete with big bad full-commission brokers.

This is about bringing down the National Association of Realtors, the biggest homeowner lobbyist on Capital Hill and a thorn in the Fed's side. Everyone knows that the DOJ filed suit against the NAR. What they weren't counting on was that the NAR would fight back.

With NAR out of the way, real estate can be wrested out of the states' hands and federal lawmakers would be free to install a federal real estate transfer tax, eliminate the mortgage interest rate deduction, and modify other homeowner benefits.

In other words, this so-called competition would give us the same great service we have on airplanes and in health care -- none. Thanks to beating down profits for airlines, they've hovered near bankruptcy for years and cut service to the bone. HMOs have strong-armed doctors to the floor, while enriching their CEOs with giant salaries and houses. The DOJ says doctors can't form organizations to negotiate with the HMOs -- that would be anti-trust. Isn't that absurd? Meanwhile, the average Joe has worse health care today than ever.

So if the DOJ gets its way, consumers won't know what hit them. They'll applaud the DOJ, and use the cheaper service providers and they'll never figure out that it was all just a land grab. They don't know it, but the costs are only beginning for consumers.

Frankly, I'd rather pay 6 percent in commission than lose the biggest homeowner advocate in the world.

Published: October 11, 2007

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.