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Practice Of Real EstateAntitrustMEDIUM

Which of the following activities by competing brokers would constitute an antitrust violation?

Correct Answer

C) Agreeing with competing brokers to charge the same commission rate

Price-fixing — where competing brokers agree to charge the same commission rate — is a per se violation of the Sherman Antitrust Act. Such agreements eliminate price competition and are illegal regardless of the rates agreed upon. By contrast, MLS participation, offering discounts, and competing for listings are all lawful competitive activities. Antitrust violations in real estate can result in criminal prosecution, substantial fines, and civil liability.

Answer Options
A
Cooperating through a Multiple Listing Service (MLS)
B
Offering discounted commission rates to attract clients
C
Agreeing with competing brokers to charge the same commission rate
D
Competing for listings in the same geographic market

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Related Topics & Key Terms

Related Topics:

Sherman Antitrust Actprice-fixingper se violationsMLS cooperationcommission negotiability

Key Terms:

price-fixingSherman Antitrust Actper se violationcommission ratesantitrust

Related Concepts

License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.

Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.

Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.

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