Class Action Lawsuit brought agains the NAR

[Billy Knox]

Wanted to solicit feedback on the class-action lawsuits brought against the NAR pertaining to anticompetitive compensation mechanics.

Thoughts on the way this changes the fundamental landscape? What would happen if buyers had to pay the agents they utilized directly? Does requiring sellers to pay buying agent commissions foster anticompetitive behavior and artificially inflate commissions (they will only show or favor listings with the highest commissions)?

What do you guys think the fallout will be, if any?

[David M.]

@Billy Knox

this has been going on for years, if not decades...

real estate attorney's don't do the job of an agent...  For one, they aren't getting out there to open a door...  Also, in some areas / States, they normally don't use attorneys.  So, you are only proposing to transfer functions / costs to attorneys and creating a business area for them.

Its a "sticky" argument.  If the buyers are to pay their own agents, that just means they have less cash to bring to closing --- or need more.  I think the stat is the avg money down is way less than 10%.  So, with the buyers needing more cash to pay their agent...

Then, what about the agents?  If they go to a fee for service model, how will the buyers afford that??  $xx for every showing?  $$ for each phone call?  Now you are doing billable hours like an attorney normally does.  Real estate agents are in a sales type business.  Many try to compare it to an hourly /wage job and thats just silly -- in general.

Don't forget, many times an agent works with a client but never gets the deal...  you do realize with at least 2 splits, agents actually don't make as much as many people think per deal?

Some people need an agent's help.  Yeah... many on BP piss on them because real estate investors are really "in the business" so of course they may not find agents helpful.  But, most buyers and sellers are not in the business and only do at most a few of transactions in their entire lives.

Yeah, its a tough problem.  Everybody wants to "save" money...

Its a tough subject.