U.S. plans antitrust suit over real-estate listings

From the Post-Gazette:

In a widening push to promote price competition in sales of residential real estate, government antitrust enforcers are preparing to sue the National Association of Realtors, alleging that its policies will illegally restrict discounting of sales commissions and put online competitors at a disadvantage.

The move, the latest effort by the Justice Department and the Federal Trade Commission aimed at protecting buyers and sellers of homes, could help take some of the sting from high real-estate costs. It comes as a hot housing market has caused prices to surge, sharply boosting income for brokers and sales agents, whose commissions typically amount to 5 percent to 6 percent of the sale price.

Last year, sales of new and previously occupied homes totaled nearly eight million units, and commissions amounted to $61 billion, up from $42.6 billion in 2000, according to estimates by industry publication Real Trends. The median sale price for an existing home was $188,833 for the first quarter of 2005, up 41 percent from the same quarter of 2000 and 80 percent from that period in 1995, according to Thomson Datastream.

The Justice Department is expected to charge that the NAR, in a proposed 2003 bylaw, illegally adopted practices intended to stifle Internet-based rivals and discounters, according to lawyers close to the case. These competitors often charge commissions below the traditional 6 percent that is divided between buying and selling agents.

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