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End the Real Estate Racket

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The housing market is hot, hot, hot right now, and home prices continue to soar in many markets to their highest prices ever. Since it doesn't cost a real estate agent ten times as much to sell a million dollar home than a $100,000 home, one would expect that the percentage fees for real estate agents would be falling. They aren't. Why?

I started investigating the fees charged by the real estate industry some 15 years ago when I was an economics writer for the Wall Street Journal. What I discovered is that the real estate agents had created a de facto legal cartel that often rips off buyers and sellers of homes. The excess cost to home buyers and sellers from this industry cartel is typically more than $10,000 for homes with a price above $500,000.

A Brookings Institution study found that, "across the country, national average commission fees over the past couple of decades have doubled and outpaced inflation in most years." The researchers found that the increase in real estate commissions are "invariant to factors that affect the cost of housing transactions," and........

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