The traditional business model of a 6% commission to realtors paid from the final sale price of a home is being challenged by a growing variety of Internet-based brokers offering customers a reduced cost alternative. At the heart of this current controversy is the ability of traditional realtors to control access to area property listings, specifically the Multiple Listing Service (MLS), by discount non-traditional Internet realtors. The MLS refers to a series of databases that compile detailed information about nearly all properties for sale through brokers in a given market area. The MLS is typically paid for and maintained by local real estate firms organized as associations or groups. Through its control of the MLS, traditional real estate brokers have allegedly been able to preserve their commission structure by excluding the access of low-cost Internet realtor services from searching and listing available area property listings. Under the newer Internet business models, realtors would generally charge reduced rates and provide fewer services, with customers searching for homes on their own using the Internet. Considering the overall costs of home ownership, the estimated savings to consumers using Internet real estate brokerage services are estimated to be substantial. The U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) have recently brought separate actions alleging that realtors throughout the nation have engaged in anticompetitive practices to the detriment of the public.
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