In this blog post, we're diving into the recent developments surrounding the National Association of Realtors (NAR) and the impact they might have on the real estate industry, specifically on buyer-broker commissions. We'll also explore whether Redfin has a role in this unfolding saga and what potential changes we can expect.
THE NAR BATTLE UNFOLDS
Last Tuesday, a Missouri jury delivered a significant verdict, finding NAR, along with Keller Williams and HomeServices of America, guilty of conspiring to inflate buyer-broker commissions, resulting in a $1.8 billion penalty. This outcome came after the Sitzer/Burnett trial, which lasted 11 days and involved numerous witnesses. The reactions from industry professionals have been mixed, given that RE/MAX and Anywhere Real Estate had already settled earlier this month. These settlements amounted to $138.5 million and allowed franchisees to choose NAR membership or opt out.
It's essential to note that the awarded penalty could potentially triple if the judge decides to apply anti-trust rules. NAR's VP of Communications, Mantill Williams, responded to this development by emphasizing their commitment to consumers and their intention to appeal the jury's verdict. This legal battle is far from over, and it might take several years before a final resolution is reached.
THE LONG ROAD AHEAD
As Williams pointed out, both sides were prepared for appeals throughout this complex legal battle. So, what can brokers and practitioners do? The answer is to stay informed and keep calm. NAR has established an online resource, competition.realtor, to help members prepare for a protracted legal defense.
THE COMMISSIONS DILEMMA
One critical point often missed in the conversation is that this lawsuit is part of a broader war. The core issue is that homeowners signed agreements to pay specific commissions for specific services, received those services, and initially agreed with them. However, they now believe they shouldn't have had to pay those commissions. This underlying conflict is why we find ourselves in this situation.
BUT THERE'S MORE TO THE STORY
But here's the twist. While copycat lawsuits are emerging, and NAR's appeals are underway, there might be more to the story. We're following the money, and there's a possibility that the recent decision could be vacated. In a blog post following the verdict, Redfin CEO Glenn Kelman stated that traditional brokers might start advising sellers to set buyer agent fees as they see fit. This could lead to a shift in how commissions are structured and negotiated.
REDFIN'S STRATEGIC MOVE
Redfin appears to be positioning itself to thrive in this evolving landscape. If buyer agents become less common, Redfin can leverage its vast online presence and technology to market properties directly to consumers. This could lead to market share gains for Redfin. The platform might even be opened to other listing agents who collaborate with Redfin as partners.
As the real estate industry navigates this legal battle and potential changes in commission structures, it's crucial to stay informed and keep an eye on the evolving landscape. The impact of these developments on buyer agents and the market as a whole remains to be seen.
What are your thoughts on this situation? Who do you think stands to benefit the most from these changes? Please share your thoughts in the comment section below, and let's continue the discussion.