Fear and antitrust in real estate

Your mother was right. If you don't have anything nice to say...

by Louise E. Hull  FEAR. False Evidence Appearing Real. That’s what I always heard it meant.

For several months now TAR CEO Benny McMahan and I have been traveling the state for TAR regional meetings. We generally meet with board leadership for a couple of hours and then with the general membership of the local associations for a couple of hours. Often, TAR Director of Legal Affairs Ron Walker will wrap up the day with a legal topic.

In the general-membership portion of these meetings, without fail, the topic that generates the most interest is the discussion of the emergence of new business models in real estate. A couple of months ago, we addressed some of those models in this column. But I am beginning to see a new issue within that topic that is causing me concern. We call it antitrust.

Remember that one? We studied it in Real Estate Principles. It’s a law that prohibits unfair business practices such as price-fixing, boycotting, etc. Just like fair-housing laws prevent practices that discriminate against someone who looks or talks differently from us, antitrust laws prevent practices that discriminate against someone who might do business in a different way from us. We all must be very careful to avoid any appearance of antitrust practices.

Some of these new business models may go away due to lack of profitability. Some may become the model for the way we all do business in the future. Only time will tell. In the meantime, as long as they abide by the rules we all must follow, businesses using new and different practices have every right to operate the way they choose.

And, beyond the law, what about the Code of Ethics of the National Association of REALTORS^®? Article 15 states that "REALTORS^® shall not make false or misleading statements about competitors, their businesses, or their business practices." We must be very careful as we talk about these REALTORS^® (yes, they are REALTORS^®, too!) with each other and the public. We are not prohibited from discussing the services we offer in contrast to any other brokerage, but we should always avoid any disparaging remarks about our competition.

The fear of change, the fear of the unknown, the fear of disintermediation (us being removed from the transaction)–these are the fears that tempt us to criticize and discriminate. No negativity is required to either learn from our competitors or to differentiate ourselves from them. Either approach can make us better at what we do. Ultimately, consumers will decide how and by whom they want to be served. It always comes down to the customer, as it should.

A few months ago, I was privileged to attend a conference of the Asociación Mexicana de Profesionales Inmobiliarios (AMPI), the professional real estate organization of Mexico. One of their speakers, Luis Manuel Galindo, when describing the tremendous changes taking place in the business climate in Mexico, said the following: "Don’t be afraid of competition, but your incompetence." Wow! Now that’s pretty strong! Perhaps we real estate professionals in Texas can learn from our neighbors to the south. Rather than worry about how someone else is selling real estate, we can become even better at what we do. Then, and only then, will we truly have nothing to fear from our competitors.

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