Good Ole' Boys Club
By Jim Palmer Jr.

Anti-Trust Laws are meant to preserve and protect competition in the marketplace in order to promote consumer benefits. Competition is beneficial because it saves consumers money and encourages businesses to provide better services. Violations are considered a type of white collar crime because they hurt competition, increase consumer prices and damage the economy.

This idea in the context of real estate commissions has been a contentious topic for years, especially in some isolated markets where the “Good Ole’ Boy’s Club” dominates and the unwritten rule subscribed to by the unofficial membership is to control and regulate a certain level of commission rate in an area.  Whenever an innovative marketing strategy comes to town, especially one that affects commission rates or even commission splits among brokers, it can disrupt the status quo, causing a ruckus among the Good Ole’ Boys. These verbal murmurings, even behind closed doors, can constitute a violation of Anti-Trust Laws.

While individual brokerages may dictate a minimum commission rate for their own in-house brokers, any collusion, subtle or overt, among competing brokers to have a set rate is a violation and punishable by law. Federal and State Anti-Trust laws prohibit brokers from conspiring to fix prices, engage in boycotts, or to allocate customers or markets. When such a free market is working at its best, each broker should be free and unencumbered by unrighteous peer pressure from “the club”, to be competitive in the market, while at the same time expecting a fair compensation for services rendered.

In the spirit of the Anti-Trust Laws, no broker should ever suggest to a competing company that if they agree to set commission minimums at a certain rate, then they would agree to do likewise, nor should any broker ever suggest to a company that if they perform or refuse to perform a certain service that the brokerages in the area will boycott them.

Some brokers still wish to allocate markets, which is a flagrant violation of Anti-Trust Laws. The basic premise is that certain companies agree to stay inside certain market areas and then expect competing brokers to do the same and stay out of each other’s allotted area.  This short-sighted mentality is not only illegal, but is not healthy for the public.

Our free market system, including the free exchange of listing data generated from the Multiple Listing Service, works best for the benefit of consumers when competition is fierce and all of the Good Ole’ Boys Clubs are extinct.