Real Estate agents must be licensed by the state after passing the licensing examination. They must work for at least 3 years at a firm under a broker before they are eligible to work independently. Sellers of residential real estate must be members of local, state, and national Realtors organizations. These organizations create and enforce ethical guidelines for their members. They have been instrumental in helping the government create fair housing laws. Laws for selling residential real estate have varied between the states. In Michigan real estate agents are required to work on commission.

 

Realtors in the past would tell buyers/sellers that their commissions were fixed and non-negotiable. If a Realtor sold a house where the seller didn't have an agent, they would make double the commission. In reality seller's agents would publish the commission they were willing to pay the buyer's agent. Buyer's agents would show the houses where they would make the highest commission.

 

Because of these practices, a class action lawsuit was filed alleging anti-trust violations, unethical behavior, and price fixing.