Blanket Referral Fees in Online Real Estate

Blanket Referral Agreements in Real Estate

A copy of the request filed with the US DOJ, the US FTC, and the US CFPB asking to review blanket referral fee agreements and related practices in residential real estate.

A copy of the author’s request that officially asks the United States Federal Trade Commission (US-FTC), the United States Department of Justice (US-DOJ), and the United States Consumer Financial Protection Bureau (US-CFPB) to investigate Zillow Premier Broker "Flex" Program, Realtor-dot-com Opcity, Redfin Partner Agent Program, Opendoor Partner Agent Program, Rocket Homes, mellohome, HomeLight, Open Listings, UpNest, Clever Real Estate, Sold-dot-com, Landed, LemonBrew, OJO Labs, Xome, Better Real Estate, Tomo, Blend Realty, Radius Agent, ReferralExchange, and similarly situated Referral Fee Networks on the grounds of alleged violation of the Federal Trade Commission Act of 1914, alleged violation of the Sherman Antitrust Act of 1890, alleged violation of RESPA (12 U.S.C. 2607) Section 8, as well as any other possible violations of antitrust and consumer protection laws currently ratified and enforced in connection with possible market allocation, consumer allocation, and price-fixing practices.

Attn: Antitrust Division Office of Operations
Department of Justice
950 Pennsylvania Ave., NW Room 3322
Washington, DC 20530
Attn: Office of Policy and Coordination
Bureau of Competition
Federal Trade Commission
600 Pennsylvania Ave., NW Room CC-5422
Washington, DC 20580
Attn: CFPB Regulatory Implementation
Consumer Financial Protection Bureau
1700 G St., NW
Washington, DC 20552

What companies or organizations are engaging in conduct you believe violates the antitrust laws?

The following list includes "Alpha" VC-backed hub-and-spoke collusion schemes that receive hundreds of millions USD in payments annually from licensed brokers through sham arrangements (or shell entities) registered as "paper" brokerages in various states.

Zillow Flex
(dba Zillow Group, Inc.)
1301 2nd Avenue, Floor 31
Seattle, WA 98101
Phone: (206) 470-7000
California DRE License: 01980367 Opcity (dba Opcity, Inc.)
6800 Burleson Road, Bldg. 312, Suite 125
Austin, TX 78744
Phone: (833) 507-7101
Texas TREC License 9005100
Redfin Partner Agent Program (dba Redfin Corporation)
1099 Stewart Street, Suite 600
Seattle, WA 98101
Phone: (877) 973-3346
Washington DOL License 9081
Opendoor Partner Agent Program (dba Opendoor Brokerage LLC)
5307 E Mockingbird Lane, Suite 220
Dallas, TX 75206
Phone: (214) 378-3667
Texas TREC License 9008105 (dba Rocket Homes Real Estate LLC)
701 Griswold Street
Detroit, MI 48226
Phone: (833) 297-9378
Michigan LARA License 6505346028 (dba mello Home Services, LLC)
5465 Legacy Drive, Suite 450
Plano, TX 75024
Phone: (888) 946-3556
Texas TREC License 9006745 (dba HomeLight, Inc.)
100 1st Street, Suite 2600
San Francisco, CA 94105
Phone: (855) 999-7971
California DRE License 01900940 (dba Open Listings Co.)
2000 Hyperion Avenue
Los Angeles, CA 90027
Phone: (800) 501-2077
California DRE License 01966242 (dba UpNest, Inc.)
856 Mitten Road, Suite 106
Burlingame, CA 94010
Phone: (800) 692-5010
California DRE License 01928572
Clever Real Estate ( (dba Clever Real Estate Inc.)
6358 Delmar Blvd, Suite 300
University City, MO 63130
Phone: (833) 225-3837
Missouri MDPR License 2017042277 (dba Ten-X Finance, Inc.)
7700 Irvine Center Drive, Suite 760
Irvine, CA 92618 US
Phone: (844) 355-7653
California DRE License 01937601 (dba Landed, Inc.)
148 Townsend Street
San Francisco, CA 94107
Phone: (415) 200-0050
California DRE License 01988003 (dba LemonBrew Realty NJ LLC)
720 Monroe Street, Suite C502
Hoboken, NJ 07030
Phone: (833) 536-6627
New Jersey REC License 1863793 ( (dba OJO Home LLC)
1007 S Congress, Building 9, Suite 400
Austin, TX 78704
Phone: (512) 456-8292
Texas Real Estate Commission (TREC) License 9007689 Concierge (Mr. Cooper subsidiary) (dba Xome, Inc.)
750 Highway 121 BYP, Suite 100
Lewisville, Texas 75067
Phone: (214) 687-4508
Texas Real Estate Commission (TREC) License 9002330
Better Real Estate ( (dba: BRE, Better Home Services, BRE Services, LLC, Better Real Estate, Real Estate)
3 World Trade Center
175 Greenwich Street, 59th Floor
New York, NY 10007
NY Firm License 10991232130
Tomo ( (dba Tomo Brokerage, Inc.)
801 Barton Springs Rd, 9th Floor
Austin, TX 78704
Phone: (833) 505-1705
Texas Real Estate Commission (TREC) License 9010749
Blend Realty ( (dba Blend Brokerage, Inc.)
415 Kearny Street
San Francisco, CA 94108
Phone: (650) 550-4810
California DRE license 02101769
Radius Agent (formerly Agentdesks Incorporated)
315 Montgomery Street, 8th Floor
San Francisco, CA 94104
Phone: (415) 829-4200
California DRE License 02051216
ReferralExchange (DBA ReferralExchange, Inc.)
588 Sutter Street, #350
San Francisco, CA 94102
Phone: (415) 653-5590
California DRE License 01426453

Further, numerous similarly situated "Beta" consumer-facing online hub-and-spoke broker collusion schemes, registered as "paper" sham arrangements (or shell entities) in various states that currently operate under the following Internet domains: (dba (dba
and others.

Further, an unknown number of licensed Partner Agents who choose to execute blanket referral agreements in participation with any Referral Fee Networks registered as licensed brokers in any State.

How do you believe they have violated the federal antitrust laws?

The United States is a free-market economy with solid antitrust laws and regulatory agencies established to protect competition and consumers alike. Real estate transactions in housing industry are particularly vulnerable to antitrust violations and kickbacks due to high-value, rare-event, and high risk-avoidance behavior when consumers are buying and selling homes. These risks have been now further exaggerated with recent use of the blanket referral agreements in the real estate industry promoted over the Internet.

In 2019, consumers in the United States spent between $72 Billion and $100 Billion in real estate broker commissions.. Based on information aggregated by HomeOpenly, an estimated $15 Billion in these fees are lost as unearned kickbacks due to blanket broker-to-broker referral fee agreements.

Brokers often possess a “mentality” of referring other brokers to consumers in exchange for value to be paid and received – a referral fee. RESPA (12 U.S.C. 2607) Section 8 and the U.S. Code of Federal Regulations 12 CFR Part 1024.14(g)(v) narrowly allows payments pursuant to cooperative brokerage and referral arrangements between real estate agents and real estate brokers. This limited exemption on kickbacks only applies to fee divisions within real estate brokerage arrangements when all parties are acting in a real estate brokerage capacity.

The hub-and-spoke schemes described in this report are NOT bona fide providers of any settlement services. These are 100% sham entities designed to facilitate payments of illegal fees. Sham real estate settlement entities are not entitled to the benefits of a limited exemption on kickbacks within real estate brokerage arrangements. The purpose of these entities include all of the following: (1) to organize competing brokers into a network (2) to allocate consumers within the network of brokers and away from the open market (3) to collect massive kickbacks from the sale or purchase of residential real estate (4) in some cases, to price-fix services of brokers within the network to entice consumers with fake appearance of savings (5) to scale conspiracy with the use of the Internet technology across state borders.

The online real estate market is heavily raked as a result, driven by collusion between licensed brokers, rather than competition.

The Sherman Act prohibits any agreement or contract combination in any form that restrains free trade. The antitrust laws prohibit for two or more real estate brokers to agree on the commission rate that each will charge. Real estate brokers should establish their fees unilaterally, where no two brokers should discuss rates with one another as a business proposition, especially with an exchange of referral fees.

The amount of a commission, a rebate, or a referral fee is always negotiable and must be negotiated with respect to an individual transaction. It is a per se violation of the Sherman Act for real estate brokers to agree on a “standard” referral fee that will be paid for producing a client. Real estate brokers may discuss or negotiate the referral fees compensation only with respect to an individual transaction. Real estate professionals are not allowed to enter into “standard” referral agreements because such agreements always restrict free trade.

In order to comply in good faith with RESPA (12 U.S.C. 2607) Section 8 exception for cooperative brokerage and referral arrangements, real estate agents must render referral agreements in a particular instance for a particular transaction. Two brokers, acting in a real estate brokerage capacity, may discuss a commission split or referral fee only for a specific transaction at hand. Blanket referral agreements between brokers are a per se violation of the Sherman Act.

An online Referral Fee Network never acts in a brokerage capacity, instead, it simply uses real estate license to collect referral fees. Referral Fee Networks that orchestrate blanket referral agreements with use of Internet technology are impossible to reconcile with antitrust regulations.

“Real estate referral programs often use the power of Google AdWords and Facebook to run ads and collect leads, based on location, buying behavior, and interests. From there, interested prospects often land on a webpage where they fill out a contact form to receive more information from you. Referral programs can target buyers or sellers in a specific zip code, and good programs only work with one agent per zip code. This approach cuts down the competition in your local market and makes your ads unique for better conversion in your local area.” Source: Clever Real Estate
“Referral fees in the real estate business are fees charged by one agent or broker to another for a client referred, based on the eventual commission when the sale closes. Real estate referral fees range from 20% to 35%, but the standard fee is about 25% of the earned commission. This fee is a percentage of the final commission received by the agent.” Source: Clever Real Estate
“Want to get more real estate leads and referrals? Join the Clever Partner Network to get quality leads to help grow your book of business. As an agent, you only pay a referral fee after you close, paying no upfront costs. We bring you pre-screened, ready-to-list buyers and sellers, so you don't waste time chasing leads who won't convert.” Source: Clever Real Estate

Division of Markets

All real estate brokers must compete with one another; there is no exception. In the event brokers begin to organize their operations into referral networks, this basic rule of free competition fails – a broker who organizes the scheme, in one way or another, refuses to compete with participants of the scheme.

For example, Redfin Corporation, operating under Washington DOL License # 9081, currently operates the Redfin Partner Agent program at 30% referral fees from the commission earned. Over 40% of all Redfin transactions are processed by the Redfin Partner Program’s 3,100 Partner Agents.

Once Redfin refers a customer to a Partner Agent, that agent, not Redfin, represents the customer from the initial meeting through closing. Redfin utilizes blanket referral agreements to establish a presence in areas it has no interest or unable to represent consumers.

In this scheme, Redfin effectively agrees in some form to refrain from selling in specified territories and instead enters into a blanket agreement to receive a fee from a local broker. Such agreements restrict competition because Redfin has no further need to expand its services into new areas.

Redfin utilizes the Internet as a vehicle to transmit market allocation agreements in scale. Brokers must independently determine the market area for their services, without any blanket agreements with competing firms.

Open Listings, operating under California DRE License # 01966242 and fully owned by Opendoor, works on a similar principle by referring clients to Partner Agents who are employed by or work with their brokerages.

Open Listings keeps referral fee amount hidden and does not disclose the amount it receives from Partner Agents – this practice is highly deceptive and is designed to deceive consumers into thinking that Open Listings is the brokerage they are working with.

Open Listings dictates that Partner Agent rebates 50% of their commission in order to work with a referral. This practice is a combination of a plain price-fixing agreement and market allocation.

Open Listings claims that Partner Agents will provide consumers “Open Listings quality of service.” Not only Open Listings establishes the rebate amounts for independent agents, it further dictates the level of service they must provide to consumers.

“Through the Services, you can make requests for home tours, real estate agent contact, help to sell or buy a home or other requests. By making those requests, you authorize OL to share your personal information including your home search history, favorites and saved searches, with a real estate professional (an OL Agent or staff member, or a Partner Agent, as defined below). When you make such a request to OL you are extending an express invitation for OL, or another appropriate entity or person, to contact you. A Partner Agent is employed by or works with another brokerage, but has teamed up with us to provide OL-quality service to a wider range of customers. We'll refer you to a Partner Agent in our discretion.” Source: Open Listings

Division of Customers

It is per se violation for brokers to allocate customers to whom they will sell. Brokers should never agree with each other to abstain from servicing consumers. Refusing to sell direct representation services to consumers is exactly what every Referral Fee Network does as a primary method of operations.

For example, HomeLight is a real estate broker that operates under California DRE License # 01900940 and does not represent consumers when buying or selling real estate in any State. When consumers submit information to HomeLight, this information is exchanged with random brokers for a 25% share of their commission.

HomeLight states that "our service is 100% free, with no catch. Agents don't pay us to be listed, so you get the best match." Instead of representing consumers to help buy and sell homes, the company actively disengages from its licensed activities so that every broker knows that HomeLight will not compete with them.

HomeLight owes absolutely no duty of care to consumers and takes no responsibility for the transaction, despite receiving a direct financial benefit from the home sale or purchase completed by a referred brokerage.

In a recent article published by Crunchbase, HomeLight alone claims to have “driven well over $17 billion of real estate business nationwide” since inception. A standard 25% referral fees paid on this volume of originated commissions yields a mind-blowing estimate of $4.25 Billion in commission kickbacks paid to HomeLight from participating brokers across the United States.

Almost all of the fees paid to HomeLight is profit since HomeLight doesn’t perform any services typically offered by real estate brokers. HomeLight doesn't do any actual work, it only earns a referral fee.

HomeLight referral fee scheme is of utmost effective due to the use of paid Internet advertising channels such as Google Ads. A simple ad, worth a few dollars to HomeLight, is easily converted into tens of thousands in referral fees. HomeLight claims to make such conversion every two minutes.

The exact number of HomeLight Partner Agents who choose to participate in the standard referral agreement scheme with the company is unknown, but the number is likely around 30,000 agents in the United States.

Payment of referral fees to HomeLight is not negotiated in a setting for a particular transaction - this is a blanket agreement. Brokers who participate with HomeLight do not pay any upfront costs, making this scheme highly attractive.

HomeLight Partner Agents are further promoted as "the best" who “sell homes faster.” These are highly questionable statements because HomeLight operates in a “black box” setting. HomeLight only promotes brokers who agree to a blanket referral fee and may be steering consumers toward brokers who consistently underprice homes to sell them quicker. HomeLight has a direct financial incentive to steer consumers toward agents who charge higher commissions.

HomeLight is able to re-invest Billions in referral fees revenue back into paid Internet channels as a consistent mechanism to expand their scale. HomeLight is able to promote a number of real estate brokers at any given time as a collective, making each dollar spent on ads more effective. HomeLight proposition leaves all licensed brokers with a choice to either join the collusion scheme or lose “free” business.

Realtor-Opcity is a similar Referral Fee Network designed to collect fees by matching consumers with local real estate agents willing to participate. Opcity operates as a licensed real estate brokerage in Texas under TREC License # 9005100, but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State. Opcity has been described by one consumer as a "referral system that uses third world boiler rooms to contact potential customers."

Opcity engages in a consumer allocation scheme because all participating brokers effectively know that Opcity brokerage will not compete with them to represent consumers.

Recently, Opcity has further engaged itself in a price-fixing scheme called Client Rewards referrals. In this scheme, consumers receive a cash reward from Opcity when they close on a home with an independent agent participating in the network.

Opcity actively promotes this scheme to buyers in select markets when they inquire about a property on the Realtor website or mobile app. The cash reward is managed and distributed by Opcity. The participation in the Client Rewards is subject to no upfront cost to the broker, but the broker pays a referral fee on the closed transaction.

Client Rewards referrals program managed by Opcity is a violation of antitrust laws for several reasons.

First, brokers only sign up into the Opcity referral network knowing that Opcity brokerage will not directly compete for client representation.

Second, Opcity offers a refund to consumers from a blanket referral fee earned, not from a commission earned. This is a form of collusion and is effectively a kickback on to another kickback, instead of a legal buyer's rebate mechanism.

Opcity Client Rewards scheme is equivalent to a mechanism for price-fixing services of others. By setting Client Rewards amounts for brokers, Opcity mandates the refund an agent must provide to receive a referral, while the true intention of Opcity is to motivate the consumer to use the network, despite the added referral fee.

Since inception, Zillow Group has argued it users that the MLS Aggregator is a media company. Zillow claimed that it does not promote higher real estate commissions and that it merely sells advertisement to brokers. This is no longer the case. Since 2018, Zillow Premier Broker “Flex” Program is a licensed brokerage in California DRE License # 01980367. This is now a massive real estate Referral Fee Network designed to collect undisclosed referral fees from real estate brokers with blanket agreements. Within this network, Zillow Group screens and refers consumers to real estate agents with a pre-existing referral agreement.

Zillow Group plans to massively expand “Flex” program to convert failed requests from Zillow Offers Program. In 2019 and 2018, out of hundreds of thousands of requests, 98% of all Zillow Offers have been declined. Zillow Offers has processed only a handful of transactions as an iBuyer: 700 homes in 2018 and slightly more in 2019.

Zillow Premier Broker does not offer paid services to consumers directly, instead, the portal generates revenue with estimated 25%-40% referral fees from real estate brokers. Zillow Group declines to disclose the exact referral fee amount to consumers. “Flex” program is merely mentioned by Zillow in statements filed with the SEC, and there is no mention of these agreements anywhere on the Zillow web site for consumers to view.

Clearly, real estate agents only sign-up with Premier Broker program because the price of the referral fee can be easily incorporated into their client's agreement with excessive commissions.

Zillow Group further consistently argues to consumers for the existence of a “standard” commission structure. Zillow Premier Broker “Flex” Program directly benefits from higher commission rates.

“Sellers are responsible for paying the real estate commissions for both their real estate agent and the buyer’s. This is typically between 5% and 6% of the home’s sale price, and it’s paid during closing.” Source: Trulia Guides, a Zillow Group subsidiary.

Rocket Homes offers a similar statement to consumers that reads:

“Is there a fee to buy or sell a home with a Rocket Homes Partner Agent? As a home buyer, there is no charge to work with Rocket Homes or our Partner Agents. As a home seller, there is no charge for Rocket Homes services. However, if you sell a home with a Rocket Homes Partner Agent, you will likely be required to pay an industry-standard commission, which is typically 5-6% of the final sale price of the home. To learn more about possible fees and pricing in your area, give us a call at 1.888.468.4735.” Source: Rocket Homes

In actuality, all home sellers are free to offer any amount of buy-side commission they like and can freely negotiate listing rates individually with real estate agents. Consumers must never be subjected to "typical" rates of any kind.

All closing costs and commissions are eventually paid by home buyers. This is the reason why home buyers must be able to negotiate a refund with a buyer’s agent – this money comes from the home buyer’s mortgage payments.

When Rocket Homes claims that there is “no charge to work with Rocket Homes or our Partner Agents,” it of course, fails to establish the fact that the real charge is hidden in a blanket referral fee paid by any broker that network refers to consumers.

Programs such as Zillow Premier Broker “Flex” Program and Rocket Homes operate as “paper” real estate brokerages that choose not compete to represent consumers in any real estate transaction.

Price Fixing of Services

In an environment where residential real estate commissions run at an excessive rate, some Referral Fee Networks have begun to set “lower commission” prices and rebates for independent Partner Agents as a way to collect kickbacks on service fees.

This practice had originally started with Redfin. For years Redfin website used to claim that: "When you work with a Redfin partner agent to buy your home, you’ll receive up to 15% savings on their commission, subject to a minimum commission of $2,500 and approval by the lender." No Federal agency has yet taken legal action against Redfin, as of this time.

Redfin has paved the way with this practice to battle the 6% “standard” commission, but it couldn't gain the scale needed to solve this problem without resorting to price-fixing and blanket referral fees. Redfin simply cannot employ enough agents on its own across the US, but it aims to promote its service as a nationwide solution. When working with a Redfin Partner Agent, in 40% of all transactions originated, consumers effectively receive a collusion scheme as a service.

One of the most blatant examples of a price-fixing scheme in online real estate is built by a broker referral company called Clever Real Estate, operating as Missouri MDPR License # 2017042277.

Clever Real Estate doesn't represent consumers at all, instead, it price fixes services listing fee of $3,000 for homes sold under $350,000 and 1% listing fee for homes sold over that amount; for home buyers Clever Real Estate price fixes a rebate at 1% of the commission referred agent receives.

Clever Real Estate hides the exact amount it gains in referral fees as well. Clever Real Estate engages in every single per se antitrust violation with the use of blanket referral agreements: market allocation, consumer allocation, and price-fixing.

Price-fixing propositions have a common theme: consumers seem to get the benefit of lower rates. However, such savings are fabricated. Consumers eventually suffer from lack of transparency, referral fees, and lower quality of service.

All genuine savings must come directly from service providers, negotiated competitively. Brokers must never organize themselves into price-fixing schemes as an excuse to offer lower rates. This is the premise of all antitrust law: if the agreement to fix prices exists, there is no defense to it.

UpNest is a similar price-fixing Referral Fee Network that allows participating brokers to bid on services for consumers as non-binding proposals.

UpNest operates as a licensed real estate brokerage in California DRE License # 01928572, but it does not produce any services that are typically offered by real estate agents and does not represent consumers when buying or selling real estate in any State.

UpNest claims to provide savings, but consumers are likely to overpay for their commission due to added mandatory blanket 30% referral fee.

Real estate brokers only sign-up with UpNest because the price of the referral fee can be easily incorporated into their client's agreement. There is clearly a harm delivered with broker-to-broker collusion schemes simply because collusion process bypasses competitive negotiations and allows brokers to “pool” resources with use of Referral Fee Networks instead of having to seek and compete for consumers on an individual basis.

UpNest systematically uses Google Ads, Facebook Ads, and Nextdoor Ads to advertise their blanket broker referral agreement scheme directly to consumers. UpNest ironically proclaims their slogan as: “When Agents Compete, You Win” and “Compare Agents. Save Thousands."

In reality, blanket broker referral agreements cost consumers Billions in fees each year, no matter how they are structured or the offered premise behind them.

Kickbacks and Unearned Fees

United States Code of Federal Regulations 12 CFR Part 1024.14(g)(v) cooperative brokerage exception does not allow for kickbacks between brokers as means for consumer brokering with the use of blanket referral agreements. Kickbacks in real estate industry are what RESPA aims to resolve, be that as it may, between real estate brokers and mortgage companies.

Recently, several prominent mortgage companies have developed a strategy to by-pass RESPA Section 8 regulations entirely. LoanDepot had acquired a Referral Fee Network called mellohome, and QuickenLoans had acquired a Referral Fee Network called In-House Realty, now re-branded as Rocket Homes.

Rocket Homes and mellohome refer consumers who have originated a mortgage to their respective Partner Agent network. Partner Agents return approximately 30% of their commission as kickbacks. Rocket Homes and mellohome mode of operations rests on the idea that brokers can share referral fees, yet breaks down entirely with an application of Sherman Act that prohibits blanket referral agreements between brokers. Neither mellohome nor Rocket Homes perform any real estate services and do not act in brokerage capacity. These schemes rest entirely on blanker referral agreements with random brokers.

Real estate brokers who organize themselves with use of blanket referral agreements inevitably destroy competitive forces in their respective markets. Free markets in the United States must be protected with application of existing antitrust regulations and RESPA.

What is the product or service affected by this conduct? Where is the product manufactured or sold, or where is the service provided?

There are approximately 2,000,000 real estate professionals in the United States that aim to provide a great service for consumers buying or selling approximately 6,000,000 homes each year. Real estate brokers must and, generally, are eager to compete with each for the service to represent consumers.

It is not an occupation of a licensed real estate broker to promote other brokers, or to allocate consumers among brokers, or to collude with other brokers on commissions. It is certainly not appropriate for a licensed real estate broker to set service levels, commissions, and rebates for other brokers.

What is your role in the situation in question?

I currently serve as a CEO HomeOpenly. HomeOpenly is an Open Real Estate Marketplace™ designed to provide home buyers, home sellers, and real estate agents with a transparent representation search experience. HomeOpenly is built as an Internet service in an effort to improve the homeownership experience in the United States.

The core feature of the platform allows home buyers and sellers to receive live and actionable savings from local competitive real estate agents, including listing rates, home buyer’s refunds, and flat fees. HomeOpenly service is absolutely free and does not tax our users with referral fees.

HomeOpenly does not lock anyone into any specific rates or rebates — competitive market forces guide the process. HomeOpenly doesn’t fix prices, instead, we maintain the fair and open competition at the core of our platform.

HomeOpenly is not a real estate broker, and we never intend to become one. HomeOpenly is always an Internet technology company.

With my request to the Department of Justice and the Federal Trade Commission, I am seeking a fair and open competitive environment to develop our service. Successful implementation of an Open Marketplace™ platform requires full enforcement of existing antitrust laws that are enacted to protect US consumers.

As long as Referral Fee Networks are able to practice market allocation, consumer allocation, and price-fix services of independent brokers with the use of blanket referral agreements advertised to consumers with heavy use of paid Internet channels, an Open Marketplace™ operates at a competitive disadvantage and suffers damages as a result.

Who is harmed by the alleged violations? How are they harmed?

Consumers are eventually harmed by real estate broker’s use of blanket referral agreements, market allocation, and price-fixing schemes.

To orchestrate a scheme, each referral company acts as a referring entity and collects a sizable referral fee. These fees and anticompetitive practices result in lower service quality or higher prices.

If price-fixing and market allocation in residential real estate are allowed to continue, this problem will grow into a single offer proposition where the service rates and service quality is set by a small subset of online referring networks.

Consumers should not be subjected to pre-negotiated buyer’s refunds, or similar incentives when buying or selling real estate. All rates and service levels in the United States must be negotiated in a competitive setting to protect an open competitive market economy from decay.

If you have a question or comment about an antitrust issue, you may submit it to the Bureau of Competition at the United States Federal Trade Commission and/or to the Antitrust Division of the United States Department of Justice

If you have a question or comment about federal consumer protection financial laws, including RESPA, you may submit it to the Office of Enforcement of the United States Consumer Financial Protection Bureau


Related to: antitrust, price fixing, market allocation, consumer allocation, Referral Fee Networks

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Last updated: December 01, 2019
First published: December 01, 2019