Commissions are ALWAYS negotiable — never say 'standard rate' (Sherman Act penalties are criminal)
Before you read
Test yourself first: 5 questions
Question 1 of 5
Two competing brokerages agree to charge the same commission rate. This is illegal:
Answer: A. Agreeing on commission rates is price fixing — a serious antitrust violation. Commissions are always negotiable between a broker and client.
Question 2 of 5
Competing brokerages dividing neighborhoods so they don't compete is the illegal antitrust practice of:
Answer: A. Market allocation (and group boycotts and price fixing) are antitrust violations that restrain competition.
Question 3 of 5
Two competing brokerages secretly agree to charge sellers the same commission rate in their market. This conduct is an example of which antitrust violation?
Answer: B. Price fixing occurs when competitors conspire to set, control, or maintain prices (such as commission rates) rather than letting each firm set them independently; it is a per se violation of antitrust law.
Question 4 of 5
At a board meeting, brokers agree they will not show or cooperate with listings of a new discount brokerage. This agreement is best described as a:
Answer: B. A group boycott is an agreement among competitors to exclude or refuse to deal with another competitor or vendor; it is an illegal antitrust practice that harms competition.
Question 5 of 5
Two brokerages agree that one will work only the north side of town and the other only the south side, so they never compete for the same clients. This is which antitrust violation?
Answer: B. Market allocation (or division) is an agreement among competitors to divide markets by territory, customer type, or product, which illegally restrains competition.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Price fixing: brokers agreeing on commission rates — even casually over coffee
- Market allocation: 'you take the north side, I'll take the south'
- Group boycott: agreeing to shun a discount broker
- Tie-in arrangements: forcing one service to get another
- Commissions are ALWAYS negotiable — never say 'standard rate' (Sherman Act penalties are criminal)
Antitrust — The Four Felonies: FAQs
Is Antitrust — The Four Felonies on the real estate exam?
Yes. Brokerage & Practice is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
