Practice of real estate
Fair housing, advertising, antitrust, Do Not Call, social media and handling other people's money.
Practice of real estate in one paragraph
Four antitrust concepts
| What it is | Example | |
|---|---|---|
| Price fixing | Competitors agreeing on prices or commission rates | Two firms agree neither will list for less than 5% |
| Group boycott | Competitors agreeing not to deal with someone | Brokers agree not to show a discount firm's listings |
| Market allocation | Competitors dividing territories or customers | One firm takes the north side, the other the south |
| Tie-in arrangement | Requiring a second purchase as a condition of the first | "I'll list your home only if you buy your next one through me" |
Practice of real estate: 4 rules to memorize
Seven federal protected classes.
Race, color, religion, national origin, sex, disability, familial status.
No price fixing.
Competitors never agree on commission rates.
Scrub against Do Not Call.
Before any cold call.
Describe the property, not the buyer.
The safest fair housing advertising rule.
Practice of real estate, explained
Telemarketing rules require checking the Do Not Call Registry. Social media posts are advertising. The ADA covers public spaces like offices. Handling others' money comes back to trust accounts and recordkeeping.
Study four antitrust concepts: price fixing, group boycotts, market allocation and tie-in arrangements. A tie-in is not automatically unlawful; market power and effects on competition matter. Agreements among competitors on prices or dividing markets are illegal per se, meaning no excuse is accepted. Criminal penalties under the Sherman Act reach $100 million for a corporation, $1 million for an individual and up to 10 years in prison. Each brokerage sets its own rates independently, and New Jersey rules also ban collusion on commission rates and splits.
Do Not Call rules apply to prospecting calls. Scrub your list against the National Do Not Call Registry at least every 31 days. You may call someone on the registry if you have an established business relationship, which lasts up to 18 months after their last transaction with you. If a person asks you not to call again, honor it even if you have that relationship.
Fair housing on the national side means the 7 federal classes. New Jersey's Law Against Discrimination adds many more, such as marital status and source of lawful income. If a question asks about federal law, use the 7. If it asks about New Jersey, use the LAD.
NJ vs national: New Jersey's LAD protects more classes than federal law. See the NJ Law Against Discrimination topic.
How the exam tries to trip you up
- A casual chat with a competitor about "the going rate" can be evidence of price fixing. The safe answer is always to set your rates on your own and never discuss them with competitors.
- Group boycott and market allocation both involve competitors. Ask what the agreement does: refuse to deal with someone is a boycott, divide up areas or customers is allocation.
- Marital status and source of income are not federal protected classes. They are protected under New Jersey's LAD. Check which law the question asks about.
- An established business relationship lets you call a number on the registry, but a person's own request not to be called still wins.
Practice of real estate practice questions
Two competing brokers agree to charge the same commission rate. This violates:
Practice of real estate flashcards
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All 7 terms at a glanceShowHide
- Price fixing
- Competitors agreeing on commission rates. An antitrust violation.
- Familial status
- Households with children under 18, or pregnant people.
- Group boycott
- Competitors agreeing not to work with a third party.
- Market allocation
- Competitors dividing territories or customers among themselves. An antitrust violation.
- Tie-in arrangement
- Requiring a customer to buy a second product or service to get the first.
- Sherman Act
- Federal antitrust law. Criminal penalties reach $100 million for corporations, $1 million for individuals and 10 years in prison.
- Established business relationship
- Do Not Call exception allowing calls for up to 18 months after a consumer's last transaction.
Practice of real estate: common questions
Sources and further reading
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