June 13, 2007

The Restraints on Real Estate Competition

Many obstacles remain to achieving more "robust competition" in the real estate market, the Federal Trade Commission and the Justice Department have concluded.

"Competition provides American consumers lower prices, better quality services, and greater choice. In the residential real estate industry, competition is vitally important because buying or selling a home is one of the most important financial transactions a consumer will ever undertake," the agencies wrote in a report issued last month.

Washington Pos

Full Commissions Make a Comeback

The tough market for home sales may be spurring a surprise side effect on real estate commissions: For the first time in years, the average commission rate on closed sales nationwide rose slightly last year.

According to a review of revenue and cost data from hundreds of brokerages by the industry publication Real Trends, the average commission rose by nearly one-fifth of a percentage point last year, to just under 5.2 percent. That turnaround came despite the growing number of real estate firms that offer discounted standard commissions or limited-service options in which consumers pay lower fees but perform some of the tasks traditionally handled by full-service real estate agents.

Washington Post

A Slap On The Hand For Upstart Redfin

The Northwest Multiple Listing Service has fined Redfin $50,000 and asked the company to stop publishing a popular blog in which the online real estate brokerage posted reviews of Seattle and San Francisco-area homes.

Redfin is appealing the fine, although it has shut down the reviews on its Sweet Digs blog.

The blog, which has about 3,000 e-mail and online subscribers, is written by 15 freelance writers who over the past five months posted reviews on about 1,000 homes in Seattle and San Francisco. The company says it plans to maintain the blog as a source of information on pricing trends and recently sold homes.

Redfin chief executive Glenn Kelman said he had no choice but to comply, noting that the listing service had threatened to shut off its daily feed of for-sale listings.

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