Sign ban benefits big-time Realtors
The Aspen Board of Realtors has voted to eliminate “for sale” signs. The board asserts that the removal of signs will “improve the character of the town’s neighborhoods.”
Do not believe a word of the claim. Removal of for-sale signs is a blatant attempt by the largest Realtors in Aspen to monopolize the market so that they can boost their commissions. The losers will be those who sell their homes through the Realtors unless they are selling homes or condos costing more than $7 million or $8 million, and the smaller Realtors.
Bluntly, it is an attempt by the biggest firms, identified in the article, to compensate for the decline in real estate values by introducing measures that will allow them to boost commission.
Before I go on, let me note that I am not against real estate agents. In our 45-year marriage, my wife and I have purchased 11 homes and sold 10. We have always used a licensed real estate broker and always paid the commissions ourselves. Neither Margaret nor I have anything against agents or their profession.
I do, however, oppose blatantly anti-competitive acts. Adam Smith once famously wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The meeting last week held to ban the use of for-sale signs was held precisely for such purposes, although I am sure no one at the meeting motioned the word “commission.”
The removal of for-sale signs would have two anti-competitive effects.
First, it would make it more difficult for anyone interested in selling his or her own home to do so.
Second, it would make it far more difficult for smaller, single individual Realtors to compete against the large firms. This later impact is important.
Many Realtors have chosen to go out on their own in the four years since housing prices collapsed. These agents join the Realtors groups, pay to list in the multiple listing service and offer homes for sale. Many no doubt offer lower commissions than those demanded by the large, monopolistic brokers. The signs put out by these small brokers inform buyers of opportunities, opportunities they might not learn about if they depended only on a large broker to advise them on availability.
Those intending to sell their homes also lose if Realtors will not put out for-sale signs. Removal of the signs makes the computer listing more valuable and will allow Realtors to raise prices in what Smith refers to as a “conspiracy.”
Hopefully those seeking to sell their homes will demand the right to put signs in their yards advising the public of the availability. The proposal to ban signs will benefit only the large firms at the expense of everyone else.
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