A leading consumer rights group, the Consumer Federation of America (CFA), on Monday issued a report charging that real estate industry members act as a cartel to stifle competition, resulting in higher prices and poorer service for homebuyers.
It's the latest episode in the long-running soap opera that pits consumer groups and the government against the real estate industry. The dispute has become increasingly heated in recent years as soaring home prices have resulted in huge commissions for the industry. At the same time, the technology advances that have dramatically lowered costs in investment, travel and other industries have not had a great impact on real estate.
"Many traditional real estate brokerage firms, and their organizations, function as a cartel that tries to set prices and restrict service options," said Stephen Brobeck, CFA's executive director at a press conference in Washington D.C.
The CFA charges that consumers are harmed in three main ways:
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Home-builder sentiment sank to its lowest in more than a decade in June as rising interest rates made homes less affordable and inhibited speculation, according to an industry survey released Monday.
Sentiment among home builders fell 4 points to 42 in June from an upwardly revised 46 in May, the National Association of Home Builders said. The median expectation from a Reuters survey of analysts was for the index to hit 45.
Any number over 50 indicates that more builders view sales conditions as good than poor.
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73F CLEAR
16 Jun 2006 at 11:00pm
73F CLEAR
Forecast for Today
17 Jun 2006 at 12:48am
Mostly sunny. Highs in the upper 80s. Except 80 to 85 at
the beaches. East winds 5 to 10 mph this morning. Becoming southeast 10
to 20 mph this afternoon.
Forecast for Tonight
17 Jun 2006 at 12:48am
Mostly clear. Lows in the mid 60s. Southeast winds 10 to
15 mph in the evening. Becoming south around 5 mph after midnight.
Forecast for Sunday
17 Jun 2006 at 12:48am
Mostly sunny. Highs near 90. Except mid 80s at the
beaches. Southwest winds around 5 mph in the morning. Increasing
to south 10 to 20 mph in the afternoon.
Forecast for Sunday Night
17 Jun 2006 at 12:48am
Mostly clear. Lows in the upper 60s. South winds
10 to 15 mph in the evening. Decreasing to around 5 mph after
midnight.
Hurricane season has begun. And financial experts say many U.S. homeowners are woefully unprepared for the threat that wind, storms and floods pose to their home and its contents.
Close to 60% of U.S. homes are undervalued — with the average home undervalued by 22%, according to Marshall & Swift/Boeckh, which provides building-cost information. That means homeowners often don't have enough insurance to rebuild their home if disaster struck.
In hurricane season, which runs through November, 13 to 16 tropical storms are likely to form in the Atlantic Ocean, says the National Oceanic and Atmospheric Administration. It takes just one to wreak havoc on your home.
That's why it's important to make sure you have enough insurance on your home and to know exactly what your policy covers. In coastal areas, where the risk of storm damage is highest, you may need more than one insurance policy to cover wind and water damage to your home. Even if you don't live near a coastal area, you still need homeowners insurance and possibly some supplemental insurance.
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