updated: 7/20/2006 9:58:26 AM

Angie's List Seeks to Change State's Minimum Services Law

InsideIndianaBusiness.com Report

Indianapolis-based Angie's List is asking the Indiana General Assembly to repeal or modify the state's new minimum services law.

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The company says the law requires real estate agents engaged in exclusive listings to be available to answer questions, accept and present offers and help with the closing process. Angie's List says the law is anti-competitive and limits the choices consumers have for selling their home.

Angie's List is an online service where consumers rate contractors and other business services.

Source: Inside INdiana Business

Press Release

Calling Indiana's new minimum services law anti-competitive and a blow to consumer choice, Angie's List is asking the Indiana General Assembly to take action to repeal - or at least modify - the statute, which took effect July 1.

The new law requires real estate agents engaged in exclusive listings to be available to answer questions, accept and present offers and help with the closing process. As a result of this requirement, limited-service or discount brokers are no longer able to offer some of their lower cost or "a la carte" options to consumers.

"The minimum service law is anti-competitive and limits the choices consumers have for selling their home," says Angie Hicks, founder of Angie's List. "Homeowners with experience in the selling process should have the freedom to decide what they can handle, and in turn have the option to save potentially thousands of dollars in commission fees."

The push for tougher minimum service standards across the U.S. has also caught the attention of the U.S. Department of Justice, which has sent letters encouraging governors and legislators considering such requirements to reject them on the grounds they harm competition and, hence, consumers.

That being said, Angie's List does believe that traditional agents provide a valuable service and have an important place in the industry. In fact, 85 percent of respondents to a recent Angie's List member poll used a traditional agent the last time they sold a home, and 72 percent plan to use one next time. However, 67.5 percent of respondents believe traditional commissions are too high.

Indiana is not the only state grappling with minimum service legislation. The momentum started in 2002 when Illinois became the first to impose the strict standards and in the last four years, eight more states have followed suit.

At the federal level, the Department of Justice and the Federal Trade Commission are investigating anti-competitive actions in several states and recently sued the Austin (Texas) Board of Realtors for failing to provide an even playing field. On July 25, the U.S. House Finance Committee will hold a hearing on the current real estate environment.

If not an outright repeal by state legislators, Angie's List wants the law transitioned to a version that strikes a more fair balance, similar to a law passed in Virginia and one currently being considered in Ohio. These versions mandate that agents disclose the services they are required to offer, but allow homeowners to opt out of any services they do not need, thereby keeping operating costs down and allowing discount brokers to continue offering lower-priced services.

"We hope that legislators here in Indiana will step up on behalf of consumers and make this issue a priority when the session begins in January," Hicks says.

In June, Angie's List, which is headquartered in Indianapolis, reported in its member magazine on efforts that stifle consumer choice in the real estate market, including minimum service laws and rebate bans in several states.

Angie's List is where thousands of consumers share their ratings and reviews on local contractors and companies in more than 250 different categories. Currently, nearly 500,000 consumers across the U.S. rely on Angie's List to help them find the right contractor or company for the job they need done. Members have unlimited access to the list via Internet or phone; receive the Angie's List magazine, which includes articles on home improvement and maintenance, consumer trends and scam alerts; and they can utilize the Angie's List complaint resolution service. Get more information and consumer tips at www.angieslist.com.

Source: Angie's List

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