It is well known that trade associations and related organizations have an anticompetitive effect on the market. One salient example of such consequences is American Real estate. Per Vol. 44, Issue 2 of Regulation Magazine, the rules favored trade association, National Association of Realtors (NAR), has created an implicit tying-agreement. The NAR established the networks known as Multiple Listing Services which home listing with a NAR-affiliated realty agent are posted (p.28). Frequently potential homebuyers are persuaded to avoid purchasing homes listed outside of the MLS network, referred to as For-Sale-By-Owner (FSBO), in a practice known as steering (p.28, 30). In such a system, the commission for the broker is not only predetermined but also “… the listening agent must make a blanket-unilateral offer in advance to pay the buyer’s broker’s fee… despite not having information on the services provided…” (p.30). It should be noted that tying agreements are often scrutinized by the U.S government (see the USA v. Microsoft Corp, No. 97-5343 (D.C. Cir. 1998)).
As another variant of anticompetitive market behavior, there are generally moral arguments for supporting the measure. This means that advocacy for maintaining this system is subject to Bootlegger and Baptist’s (1983) dynamics. Concurrently, while some argue that the MLS system from a consumer interest standpoint inevitably NAR realtors are the ones that benefit. Our Bootleggers realtors profit handsomely. Not only does this practice allow the buying brokers from having to negotiate fees, but American realtors are paid “… two to three times higher than in other developed nations..” (p.30). Effectively operating as a transfer of wealth from the consumer to the service provider (p.30). However, some realty companies such as Clever Real Estate assume as a Dual-Role Actor. Such a firm is a beneficiary of the current trade practices; they also argue that the MLS system is more convenient for sellers to expediently sell their homes
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