Title: Bringing More Competition to Real Estate Brokerage
Abstract: This paper provides an economic analysis of the residential real estate brokerage industry. We nd that the traditional model for residential real estate brokerage services may be dated, and could be improved substantially with some public policy interventions that spur innovation. We believe that there are numerous barriers to entry that are slowing the emergence of new models for serving consumers. Some of these barriers are likely to be anti-competitive. Examples include discrimination against new brokerage models and online brokers who wish to join multiple listing services; state legislation that would require minimum service requirements, e ectively preventing ‘‘a la carte’’ o erings; and prohibitions by real estate commissions on providing rebates to customers. In our opinion, none of these practices should be allowed. We o er three broad policy recommendations: First, antitrust authorities should carefully scrutinize e orts to limit competition in Robert W. Hahn and Robert E. Litan are the co-founders and directors of the AEI-Brookings Joint Center for Regulatory Studies. Jesse Gurman is a research assistant at the AEI-Brookings Joint Center. The authors would like to thank Scott Wallsten, John Weicher, Susan Woodward and Norm Miller for helpful comments. Earlier versions of this paper were presented at the American Antitrust Institute’s Symposium on Competition in the Residential Real Estate Brokerage Industry in November 2005 and at the Federal Trade Commission and Department of Justice’s Competition Policy and the Real Estate Industry Workshop in October 2005. In addition, a shorter version of the paper appeared in the Milken Institute Review in December 2005. The views expressed here are those of the authors and not necessarily those of the institutions with which they are a liated.
Publication Year: 2006
Publication Date: 2006-01-01
Language: en
Type: article
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Cited By Count: 12
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