Real Estate Protectionism
Another gem from the pile of magazines and professional journals I've been trying to catch up on around year's end: From the June 2006 issue of Governing, a long and detailed account of the political power of the realtors lobby in various states. It notes that given ongoing improvements in the ability of people to spread information and make deals about houses for sale, that the pro realtor might be in as much danger as the professional old-style travel agent has been in these days of Expedia and priceline.com. Author Alan Greenblatt then notes that realtors (a registered brand name, by the way, that the real estate agents themselves would like to see always capitalized) are doing their level, and influential, best to stop that from happening:
It might be too soon to bet on that scenario, and the reasons are
the involvement of Realtors in the political process and the
protections they have already crafted to stave off the threat. The
many state rules governing their profession, including the newly
created ones such as minimum-service requirements, serve as serious
barriers to entry, helping Realtors preserve their control over the
market.In the opinion of critics, the rules mean both higher fees for
Realtors and higher prices for houses. For Robert Lande, a professor
at the University of Baltimore School of Law who is associated with
the American Antitrust Institute, the new minimum-service laws are
merely the latest phase in a permanent campaign by Realtors to keep a
stranglehold on property transactions. "They've got a sweet deal,"
Lande says. "You fix the rules of the game to insulate each member
from hard competition."