Alternative real-estate brokers face bias, poll finds

July 28, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

WASHINGTON -- A survey of alternative real-estate brokers in the Baltimore area and 16 other cities has found that traditional brokers discriminate against brokers who offer discount commissions or who work directly for buyers, a consumer group said yesterday.

"Although discrimination has lessened over the last decade, it is still significant," said Stephen Brobeck, executive director of the Consumer Federation of America, a nonprofit association of 25 consumer groups, which conducted the survey this month.

The result, he said, is higher costs for consumers because they are less likely to use a discount broker or a buyer's broker, who might negotiate a better price for a homebuyer.

Most real estate agents work for the seller and usually charge a commission of about 6 percent to 7 percent of the sale price of a home. Buyer's brokers are advocates for buyers; discount brokers are similar to traditional agents but typically charge commissions of 1 to 2 percentage points less.

The survey of 85 alternative brokers in 17 metropolitan areas found that they had been harassed by traditional brokers in these ways:

* About 60 percent reported "disparagement" of their businesses, and 45 percent said they suffered "angry criticism or personal threats" from traditional brokers.

* About a third said they had had clients "pirated" by traditional brokers, or had brokers refuse to show homes listed by their businesses.

* About 35 percent said they had faced problems with advertisers.

In the Baltimore area, four alternative-brokerage firms were surveyed, and several said "their problems had subsided," Mr. Brobeck said. The names of the Baltimore-area brokers were not released.

In an interview, Fletcher Hall, executive vice president of the Greater Baltimore Board of Realtors, asserted that such practices do not occur in the Baltimore-area market.

"I can assure you that at the Greater Baltimore Board of Realtors, I have never heard any disparaging remarks about alternative brokers," Mr. Hall said, noting that several such brokers belong to the association and make full use of the group's Multiple Listing Service, which lists houses for sale by member brokers.

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