By Steve Bailey, Globe Columnist, 2/12/2003

Imagine the outcry if McDonald's and Burger King were to merge? It would put an end to the burger wars that are shrinking their once healthy profits. But what is good for corporate profits would not be nearly so good for those of us who consume way too many of those burgers and fries. How long do you think those fatty but cheap 99 cent specials would last?

Last summer, the McDonald's and Burger King of Eastern Massachusetts residential real estate - Coldwell Banker Hunneman and the DeWolfe Cos. - announced they were combining, in a deal that will give the new giant a market share of as much as 65 percent in some suburban Boston towns. As the new Coldwell Banker Residential Brokerage goes to work rationalizing its sprawling system of 108 offices and 3,100 agents in Eastern Massachusetts, it is worth asking: Is all this consolidation as good for us little guys as it is for the big guys?

The fragmented real estate industry has been rapidly consolidating, led by NRT Inc., the New Jersey unit of Cendant Corp. that has acquired more than 250 companies in the past few years. The trend is being fueled by the continuing real estate boom that is making brokerages more valuable, consumer interest in one-stop shopping, and the rising technology costs for things like the websites where we all begin our real estate hunts these days.

NRT's $149 million acquisition of DeWolfe put together the number one and two companies in the region. Together, Coldwell Banker has more offices and agents than the next two largest companies - Conway & Co. and Carlson GMAC Real Estate - combined. At what point does one real estate company become so dominant that it compromises the best interests of consumers?

''The public will have to make that decision,'' says Coldwell Banker executive Rick Loughlin. ''I believe we will provide the service that will make people want to do business with us.''

Among the issues ahead: the trend toward what the industry likes to call ''in house'' sales, the dicey proposition of one agency trying to serve two masters, the buyer and the seller. With one dominant company like Coldwell Banker, the practice is likely to accelerate. Real estate firms tend to favor in-house sales because it keeps both sides of the commission in the firm. But it also raises a clear conflict-of-interest question: Can one agency fairly represent both sides of a deal? Can one law firm handle both sides of a divorce?

The issue is about to move to the front burner. Yesterday, a task force from the Massachusetts Association of Realtors spent the day working on a proposal that would make it easier for firms to represent both parties. Under the plan, an agency would designate one agent to represent the seller, and another to represent the buyer. The problem with this so-called dual agency is that rarely does the consumer get adequate disclosure about the risks in such arrangements. The industry proposed similar legislation six years ago, but it went nowhere. The only thing that has changed since then is there are fewer, bigger agencies looking to hang on to a bigger piece of the pie.

Speaking of real estate, the fabulously rich Roy family is headed back to Cohasset. Family matriarch Mary Louise Roy has her in-town place at 211 Commonwealth Ave. on the market. Asking price for the 12-room town house: $25 million, which could surpass the most expensive deal on record in Greater Boston, the $18.5 million sale of philanthropist Barbara Lee's Brookline home in 2001. Roy's son, Peter, has put his town house at 128 Commonwealth on the market, for $10 million. A second son, Stephen, is hanging on to his huge place at 355 Commonwealth (26,360 square feet), but there is commercial space available below. The state's new secretary of environmental affairs, Ellen Roy Herzfelder, is staying put in Cohasset.

Steve Bailey is a Globe columnist. He can be reached at 617-929-2902 or at bailey@globe.com.

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