Price-fixing warning for real estate network

The Commerce Commission has warned Christchurch real estate co-operative the Real Estate Network Ltd (REN) that its members risk breaching the Commerce Act for price fixing.

REN, which represented the majority of licensed residential real estate agents in and around Christchurch, offered a network listings service allowing member agents to share the details of sole agency properties with other members.

REN passed a bylaw last June introducing a minimum commission provision, under which vendors could only use the network listings service if the fee to the selling agent was 40 per cent of the commission originally negotiated with the listing agent.

A minimum fee of $3000 would apply if the negotiated fee came to less than $3000.

REN suspended the bylaw when told of the Commerce Commission investigation.

The commission considered that the by-law was an agreement between competitors that fixed, controlled or maintained a price, that was the fee payable by a listing agent to a selling agent on the sale of a property.

"As some vendors' commissions are less than $3000 in total, setting a minimum commission may lead to agents increasing the commissions charged to vendors," said commission director of competition Deborah Battell.

The commission considered a warning appropriate as the bylaw was only in place for a matter of weeks, and REN co-operated.

"The Commission will continue to monitor behaviour in the real estate industry and will recommence investigations if any further concerns are raised about possible price fixing," Ms Battell said.

- NZPA