Real Estate Blog

  The Department of Justice issued a letter Friday, April 8, 2005,  urging the Oklahoma state legislature to reject proposed legislation that would change current state law to eliminate the ability of Oklahoma real estate professionals to offer a selection of real estate services, sometimes called fee-for-service or menu pricing. The DOJ expressed concern that the proposed legislation would cause Oklahoma consumers to pay more for real estate services and would limit consumer choice by eliminating an entire class of real estate service provider:.

"In the past, real estate brokers have bundled their services into a single package and consumers have been charged a single price, usually a commission based on a percentage of the sales price of the property. To meet evolving needs of consumers and changing market forces, some real estate professionals offer consumers a menu of real estate services, and clients can choose to purchase only those services that meet their needs. The bill would likely harm competition in two ways. First, consumers who do not want or need all of the services traditionally provided in a package nevertheless would have to pay for all of them, which may cost them thousands more to buy or sell a home. Second, without competition from fee-for-service options, the prices for traditional, full-service packages are likely to increase.

“Competition in marketplaces across the country has demonstrated that many consumers save money by using only selected services from their real estate brokers. The proposed legislation would deprive Oklahoma citizens of the benefits of competition, such as lower prices and customized service levels, provided by fee-for-service brokers,” said R. Hewitt Pate, Assistant Attorney General for the DOJ’s Antitrust Division. The letter points to the lack of any evidence that providing a greater selection of real estate services has caused any consumer harm, much less harm that could justify such a broad prohibition on competition."

Bankruptcy bill proponents are putting their champagne on ice as they wait for this week’s vote by the U.S. House of Representatives. Passage seems imminent. After passage, credit card companies and other "Tony Soprano" genre lenders can turn to federal courts empowered to act as "enforcers" for unpaid debt.  Broken lives will follow.

While The U.S. Department of Housing and Urban Development engages groups nationwide in events marking Fair Housing Month, the White House is working to purge numerous economic development projects, derail a rural housing program, and move significant anti-poverty initiatives into the Labor and Commerce Departments. Housing Budget Facts:

"Cuts on domestic spending come at a time when city budgets are severely challenged and cities have major community and economic development needs. The U.S. Conference of Mayors issued a statement that they are strongly concerned the consolidation is being used as a way to cut needed resources.

" Cities have become dependent on HUD’s development programs, especially the Community Development Block Grant, and use these grants for clinics, recreation centers, day-care facilities, literacy programs, job creation, stimulation for private investment, and revitalization of distressed communities. With housing and property values skyrocketing, the need for such programs for low-income families has never been greater.

" The budget would eliminate $260 million in economic development projects earmarked for this year by lawmakers and HUD could ultimately lose a quarter of its $31 billion budget. Some 817 HUD community planning and development employees, along with those employed because of financial resources HUD provides to stimulate business, could be in jeopardy of losing their jobs.

" The administration proposes to consolidate 18 community development programs from various agencies into a new $3.7 billion economic development program for distressed communities to be overseen by the Commerce Department4, generally see to be more receptive to business needs than the needs of the poor.

" Don Plusquellic, the mayor of Akron, Ohio, who is president of the United States Conference of Mayors, said: ‘The new proposal in unconscionable. It will cut programs that help the poorest and the neediest’."

The Department of Justice’s Antitrust Division  filed a lawsuit against the Kentucky Real Estate Commission for limiting competition among real estate brokers. DOJ said that the Commission’s regulations restrict competition and cause consumers to pay higher prices for certain real estate services:

...the Kentucky Real Estate Commission regulations prohibit real estate brokers from competing by, for example, offering cash rebates or refunds, or a free home inspection, the DOJ said in its court filing. Nor can they compete by taking a customer out to dinner or donating money to a charity of the customer’s choice. The Department’s suit seeks to restore this beneficial competition. As aptly put by another broker quoted in the complaint, striking down these regulations and permitting "rebates and inducements will increase competition and give consumers more choices in service."