In an op-ed on RIS Media, National Association of REALTORS® (NAR) President Charlie Oppler talks about the pro-consumer aspects of the real estate market as it relates to the DOJ’s investigation of NAR and MLSs.
For background, in November 2020, The Department of Justice (DOJ) settled an antitrust lawsuit against NAR. The lawsuit centered around these main principles:
That NAR doesn’t disclose in its multiple listing services (MLSs) that a buyer’s agent’s fee is paid for by the seller, in essence, hiding the fact that the fee is included in the purchase price; and that buyer’s agents may filter MLS listings by the fees offered. In turn, brokers may choose not to show low-fee listings to homebuyers.
In July 2021, The Department of Justice withdrew its consent to that settlement agreement reached in 2020, which had resolved issues raised by the DOJ about brokerage commissions and the MLS system. The DOJ also voluntarily dismissed its action in federal court.
According to a statement by Lesley Muchow, NAR’s Deputy General Counsel and Vice President, Legal Affairs and Antitrust Compliance, “The proposed changes to the Code of Ethics and MLS rules, which were the result of the settlement agreement, are on hold.”
RealTrends firmly sides with NAR on this issue. We’ve written about it before in an article about commission class action lawsuits.
In his op-ed, Oppler echos many of the points we described in the above article. He writes:
Commissions for real estate agents and brokers are negotiable. Always have been. Always will be. Let’s put that on the table right now.
Like most transactions in the American economy, market forces set individual commission rates to provide for competition among brokers, increase efficiency for consumers and ensure we are providing the most market-driven and best possible service to our clients.
It’s the free market at work, and the reality is that the commission structure gives everyday Americans critical advantages they otherwise wouldn’t get. That structure is what ultimately makes it possible for many people to realize the dream and benefits of homeownership.
That same free market makes it possible for small business owners to earn a living as real estate professionals. In fact, most of NAR’s 1.4 million members, including myself, are small businesses. We make a median gross income of $43,330 and are grateful for every dollar we earn.—Charlie Oppler, NAR president
He goes a step further to discuss the work real estate agents do to “navigate one of the most complex markets any of us had ever seen. Pandemic or not, day to day we’re managing untold challenges that buyers and sellers have to face. We handle the regulatory complexities unique to our own localities (each state sets its own licensing requirements for agents), we work to withstand the industry’s inevitable ebbs and flows, and we navigate the market to stay current on what our clients need to know and to stay competitive as a byproduct.”
NAR’s Charlie Oppler also believes that the Biden administration’s desire to “increase opportunities for homeownership among families of color, a fight against the MLS system would have the opposite effect. In fact, the traditional commission structure, where the listing broker offers to share his or her commission with the buyer broker, ensures the greatest possible equity for first-time to middle-income homebuyers from all walks of life who may otherwise not be able to afford a home and professional representation.”
It’s unclear exactly what the Biden administration is looking at when it comes to NAR and the MLS system. Earlier this week, Biden tapped Jonathan Kanter to serve as the Justice Department’s assistant attorney general for antitrust. According to Sen. Elizabeth Warren (D-Mass.), “He’s been a leader in the fight to check consolidated corporate power and strengthen competition in our markets.”
What that means for NAR and real estate is yet to be seen.