While most of us were sleeping, something ominous happened in the real estate industry. With today’s financial and housing crisis continuing to savage many American’s savings and home equity, an important alternative that might have helped home owner’s retain the little cash value left in their homes has been eliminated in a number of states. Led by Realtor Associations and under the guise of ‘consumer protection’, a state legislators have been lobbied into passing laws that actually restrict home seller’s choices in real estate services and INCREASE THE FEEs required for selling a home.

The following states: Alabama, Idaho, llinois, Indiana, Iowa, Kansas, Maine, Missouri, Oregon, Texas, West Virginia, Washington and the District of Columbia all now have ‘minimum service laws‘ that require home owner’s to purchase a minimum set of services from real estate brokers if they want access to the market. The real estate commission has long been the largest expense in selling a home, but with today’s high loan to value ratios, that figure has become, in some cases, more than the home owner’s equity in their home. Requiring home owner’s to purchase a minimum number of services, whether they are NEEDED OR NOT, decreases the net proceeds for sellers in these states and, in many cases now, prevents home owners from being able to receive professional real estate services at all.

The U.S. Department of Justice has been fighting for consumer rights in these states, asking state legislatures and real estate commissions not to enact or to repeal these laws. However, powerful Realtor lobbying groups have succeeded in passing into law regulations that essentially strip home owner’s of options and access to the market. During the prior decade housing prices were rising, so most sellers accepted these high commission based fees as a cost of doing business. But in today’s economic climate the minimum service laws have become particularly onerous.

In inevitable ‘reap what you sow’ fashion, Realtors are now facing the results of their actions. Realtor numbers are declining and new online, flat fee real estate companies are thriving in an economic climate that has home sellers actively seeking alternatives in real estate brokerage fees.

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