Compass-Anywhere brokerage deal would hurt homebuyers, US Senators say

(.) Senators concerned deal would contribute to high broker fees Worries that private listings hurt buyers and small brokers Other transactions have increased industry consolidation By Jody Godoy Dec 18 (Reuters) - U.S. antitrust enforcers should consider blocking a bid by Compass (COMP.N) , the nation’s largest residential real estate broker, to acquire rival Anywhere Real Estate (HOUS.N) , amid a housing shortage, two Democratic U.S. Senators said. Senators Elizabeth Warren of Massachusetts and Ron Wyden of Oregon said in a letter to antitrust officials at the Department of Justice and Federal Trade Commission on Wednesday that the deal could contribute to high broker fees and limit access to home listings, hurting homebuyers who already face high costs. Warren, the top Democrat on the Senate Banking Committee, and Wyden, the ranking Democrat on the Finance Committee, sent the letter as President Donald Trump faces pressure to address concerns about affordability, an issue he has repeatedly referred to as a Democratic hoax. Spokespeople for the companies did not immediately respond to requests for comment. Compass Chief Executive Officer Robert Reffkin said last month the company believed the deal was pro-competitive and was confident it would secure regulatory approval. The $4.2 billion deal would combine Compass with Anywhere, which owns brokerages including Century 21 and Coldwell Banker. Afterwards, Compass would have 1,000 offices and 86,000 real estate agents in the U.S., and be a global player with 340,000 agents in 120 countries. Less competition means less pressure to lower broker fees, Warren and Wyden said. Average real estate commission rates in the U.S. are around 5%-6%, which is nearly double the global average, according to the letter. CONCERNS OVER PRIVATE LISTINGS Compass’ exclusive listing service, where homes are available through agents before being listed publicly, would also put smaller brokerages and consumers at a disadvantage, the senators said. “By keeping listings inside their own networks, large brokerages - like the one that would result from a merger of Compass and Anywhere - block rivals from this necessary input, weakening smaller firms and making it harder for new entrants to compete on equal footing,” the senators wrote in their letter. More homes have been privately listed in recent years, while fair housing advocates and Zillow have criticised the practice as opening the door to discrimination. The Compass merger is one of several recent deals among real estate services providers. The DOJ cleared Mortgage lender Rocket Companies’ (RKT.N) acquisition of listing platform Redfin (RDFN.O) and mortgage servicer Mr. Cooper (COOP.O) this year. The FTC sued Zillow (ZG.O) and Redfin over a partnership it said would decrease competition. Buyers on Redfin who use Rocket for their mortgages have since gone up from 27% to nearly 40%, Rocket Chief Executive Officer Varun Krishna told investors in October. “We are not just one part of the process, we are all of them. We are a homeownership company, bringing end-to-end integration to housing at a scale the industry has never seen,” he said.