Your Real Estate Wildest Dream Is Not Wild Enough

Your Real Estate Wildest Dream Is Not Wild Enough

Here’s a short cllp from a recent episode in the twice-monthly series on THE UPDATE YouTube channel (featuring Saul Klein, Tristan Ahumada, and John Reilly) covering “WHY/WHEN/HOW is the DOJ (and private lawsuits) coming after NAR and WHAT will be the impact of this fundamental change (a paradigm shift) in the way real estate is practiced over the next few years?”

Saul ended with a grim projection that there are some outside big players who are looking at entering the real estate high-stakes market using technology and huge capital funding. You’ll find Saul talking about disruption and the opportunities open to the big players at the start of minute 21 in the complete episode link found below.

Saul asked the audience to consider what tasks the real estate professional does today that can be replaced by automation and, more importantly, what role you perform now that can never be replaced by an artifical bot. It is time to define your future role, Saul said. What’s your compelling argument that a buyer or seller should hire you? Why would you hire you…what skill sets do you bring to the table?

The complete episode from The Update can be found here

Audience Questions

There were a number of questions concerning the different issues surrounding the use/timing of “buyer agreements” and the use/timing of “buyer agency agreements” – the DOJ is clearly in favor of the buyer and buyer broker signing a well-negotiated buyer agency agreement, something that is mandated by a number of states, although there is a variety of approaches to the timing and use in connection with any state agency disclosure rules. We can see more states adopting the mandatory written requirement, as with the NAR Settlement for Practice Changes. There are unresolved questions of who will enforce the mandatory rules – the MLS, the DOJ, the state licensing agency?

You can find relevant articles at https://thedataadvocate.com/is-there-a-difference-between-tour-and-open-house/    and at https://thedataadvocate.com/the-doj-is-sending-signals-that-they-will-intervene-in-the-proposed-nar-settlement/

The most difficult questions focused on why the DOJ took the position that the written buyer agreements required to show a property were possibly an antitrust violation. For example, one broker stated: “Am I hearing you correctly, that the DOJ has actually stated that the mandate for Realtors to enter into written agreements prior to touring property, may be deemed an anti-trust violation from their point of view in the near future?” to which another responded: “..pure speculation and remember we have a changing of the guard at the DOJ in January…transparency and compliance is the best medicine to cure a DOJ attack…why profess paranoia about the DOJ? Just act responsibly, compliant and truthful.”

The DOJ position is that a premature setting of commissions would stifle a healthy competition amongst buyer brokers to create new alternatives for buyer broker fees that would end up lowering  housing costs plus avoid “steering.” Remember, the stated DOJ’s job is to protect competition.

You’ll find that the DOJ explains its position in their Statement of Interest filed in the Nosalek MSPIN case at https://thedataadvocate.com/breaking-news-doj-files-statement-of-interest-in-nar-settlement-lawsuit/

Here are some highlights:

• • The proposed settlement includes a provision requiring buyers and their brokers to enter a “written agreement before the buyer tours any home.” This provision itself raises independent concerns under the antitrust laws, which could be addressed in multiple ways. The parties could (i) eliminate the provision or (ii) disclaim that the settlement creates any immunity or defense under the antitrust laws. Alternatively, the Court could clarify that approval of the settlement affords no immunity or defense for the buyer-agreement provision.
  • This practice does not benefit buyers, who must foot the bill through higher home purchase prices, regardless of the extent or quality of their brokers’ services or whether they would have otherwise been willing to pay for those services at all.
  • Listing brokers, who represent sellers, effectively decide the total commission and, as a general matter, split it with buyer brokers, insulating buyer brokers from meaningful competition,  foreclosing meaningful negotiations between buyer brokers and their clients, and decreasing the incentive for brokers to offer improved or lower-cost services.
  • Under the proposed settlement, NAR would prohibit brokers from making these offers on the MLS itself. The proposed settlement, however, expressly allows offers of compensation to continue and for them to be posted publicly (so-called Off-MLS); it simply prohibits making these offers on an MLS. The proposed settlement also introduces a new NAR rule that requires buyers and brokers to enter a “written agreement before the buyer tours any home.”
  • In addition, the new provision that requires buyers and brokers to make written agreements before home tours may harm buyers and limit how brokers compete for clients. It bears a close resemblance to prior restrictions among competitors that courts have found to violate the antitrust laws in other proceedings and could limit — rather than enhance — competition for buyers among buyer brokers.
  • Regardless, buyer brokers under the proposed rule may not show a house, even a no-obligation showing, without first obtaining a written agreement. Thus, the concerns remain that the broker agreement rule may limit how brokers compete.

Final thought: Will artificial beings ever replace humans ? Check out the 2002 movie of SIMONE