One of the items covered in real estate prelicense courses is the Sherman Antitrust Act.
While mention of the Sherman Antitrust Act might (or more probably does not) bring memories of Rockefeller and Carnegie and others who developed monoplies and trusts in order to eliminate competetion, this and other antitrust laws today are used to fight anti-competitive activites wherever they may arise, including in your local real estate marketplace. Most licensees understand that these laws prohibit brokers from talking about commissions charged clients with brokers in other firms, and prhibit licensees from suggesting to prospective clients that there is a standard commission or that those brokers who charge less than the standard commission cannot offer adequate service.
This does not stop all brokers or their affiliates from attempting to deter other brokers from discounting their fees, by threatening to concentrate their efforts or steer buyers toward transactions for which higher commissions are available. The term “steering”, in this context, refers to action taken by a broker or agent to avoid cooperating with a particular competitor; for example, when a broker purposely fails to show his client a home listed by a discount broker even though the home matches the buyer’s stated preferences. Because listing brokers depend on cooperation from rivals, brokers may deter discounting by steering buyers away from discounters’ listings and reducing the probability that homes listed by discounting brokers will sell.
Legal? Moral? Ethical? Fattening?
The Federal Trade Commission (FTC) and Department of Justice (DOJ) have responded to allegations of steering in two distinct ways, depending on whether the steering was unilateral or involved an agreement among brokers.
They have taken antitrust actions against collective activity of brokers to reduce the availability of information about properties listed by discounters.
The FTC has sued to prevent MLSs from discriminating as to the listings that are made available on the Internet.
The DOJ has sued to prevent the National Association of Realtors from establishing rules against VOWs that limit the ability of a broker’s client to see via the Internet all the listing information formerly screened by the broker. They will continue to monitor the cooperative conduct of private associations of real estate brokers and bring enforcement actions where appropriate. They have not pursued enforcement action where steering behavior appeared to be merely the result of a single firm’s or licensee’s unilateral decision not to cooperate with a particular competitor. Therefore, despite antitrust restrictions, a licensee is free to be as cooperative or uncooperative as he wishes.
However, if he does choose to be uncooperative, he will have to deal with issues relating to his fiduciary duty to a client, any duty imposed upon him by state statute or regulation to a non-client, contractual obligations arising from an employment or agency agreement, the Realtor Code of Ethics, if he is a member, and his conscience.