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a tie-in agreement is when a seller
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refuses to sell unless a purchaser
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purchases another product or service
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tied into the transaction time
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Agreements are illegal and real estate
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professionals must avoid them at all
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costs hello everybody it's Zach here
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from real estatelicensewizard.com and
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today we're talking about tie-in
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agreements let's get started so let's
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start like always by taking a look at
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our definitions what is a tie-in
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agreement we tie in agreement or tying
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Arrangement is when a seller requires
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the purchase of another product or
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service to sell the first this means
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that if a buyer does not agree to the
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terms of the tie in sale they cannot buy
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the item or service they wanted in the
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first place a tying Arrangement
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typically requires three of the
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following aspects one two separate
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products or services to a conditional
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sale and then three Market power in the
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tying product so let's do an example
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what exactly does this look like in the
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world of real estate well one example of
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Italian Arrangement includes if a real
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estate agent agrees to sell a property
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on the condition that the buyer lists
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the property with their firm that would
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be considered a Time agreement another
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example would be if a broker is selling
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a house but tells customers they must
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also buy an additional property to
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complete the sale why is this important
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and why is this bad well obviously this
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is a monopolistic business practice and
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it's against the law and real estate
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professionals can get in tons of trouble
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for it why are they illegal well a tying
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Arrangement gives consumers no choice
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but to pay an additional price if they
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want to buy the home lease an apartment
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Etc this compromises a free market and
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fair housing because only consumers who
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can afford the tide product can take
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Brokers up on the deal so at what point
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is something considered a tie-in
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agreement well remember those three
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things I listed earlier again if any one
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of those things come up if a deal
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matches any of those conditions it is
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considered a violation of federal
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antitrust laws so what are the penalties
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then for these tie-in agreements in real
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estate well individual violators of
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antitrust laws may have to pay as much
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as one million dollars or spend up to 10
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years in prison if an entire real estate
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company is guilty of offering illegal
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tying Arrangements it may owe as much as
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a hundred million dollars according to
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the FTC the laws around tying Agreements
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are changing the Supreme Court seems to
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take this antitrust law violation even
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more seriously than before so punishing
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offenders is becoming more and more
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common but lower courts are more
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flexible when it comes to tying
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Arrangements but either way you know
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manipulating customers into buying tide
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product or Services is always going to
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be a bad idea and a violation of
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antitrust laws that being said not every
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tying Arrangement is against the law if
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a seller offers a tied product but has
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no Market power over the product then
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you know they might not have considered
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a federal Anti-Trust law it's also
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important to note that bundle link
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products is a typically perfectly legal
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business practice bundling is when a
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broker offers the sale of two products
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together but again this is the biggest
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part but they allow consumers the option
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to purchase them separately and that's
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the biggest difference is if you combine
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them separately it's totally fine if you
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are forced to buy them together then
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that is considered an Anti-Trust law
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violation so what do you need to know
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for the real estate exam well come exam
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day you need to be familiar with these
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Anti-Trust law violations remember a
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tie-in Arrangement or tying agreement is
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when a seller requires the purchase of
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another product or service to sell the
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first it's a clear Anti-Trust law
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violation not only will learning this
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information be vital come exam day but
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also be incredibly important for your
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real estate career I want more
3:51
information on Anti-Trust law violations
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click the video here and click here to
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subscribe thank you guys so much for
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watching until next time bye-bye
