DON’T LOSE YOUR FAVORITE REAL ESTATE AGENT TO “TYING”
REAL ESTATE PRACTICE, TIPS FOR BUYERS, TIPS FOR SELLERS
August 23rd, 2008
From time to time, I’ve come across an agent or builder that snags one of my past clients using a tying arrangement. Antitrust laws prohibit certain practices where one agent, conditions the purchase of a listed property upon the agent taking a listing on the buyer’s property, known in the real estate business as a “list back”. Courts in California have determined these arrangements violate antitrust laws, laws designed to ensure competition in the real estate industry. This law also finds the practice of requiring a buyer of a lot or home in a subdivision use the developer’s broker, unlawful. Furthermore, developers cannot require a buyer to use an escrow company wholly-owned by the developer.
Offering a financial incentive to use additional services of the broker is less likely to trigger a possible antitrust violation as long as the broker does not mandate the purchase of the tied product. Determining when tying is unlawful involves a complex factual and economic analysis centering on whether the merchant has the market power or unique advantage to coerce the buyer to accept the tied product.
Such issues cause bad feelings among agents that see their clients lured away by tactics that crush loyal agent/client relationships. If the public is aware of the law concerning illegal tying arrangements, they may be able to retain the services of their trusted real estate professional instead of being taken advantage of by an agent or developer that is trying to squelch competition. If you are looking for expert buyer or seller representation, contact me for a free no obligation consultation:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY REAL ESTATE EXPERIENCE
