The NAR Lawsuit—Why I’m Not Worried
There’s been some big news recently in the world of real estate—in October, a jury found the National Association of Realtors (NAR) and its codefendents guilty of working together to inflate commission fees for real estate agents, specifically agents for a buyer.
It’s a complicated case, and consensus in the industry is that it will take several years to see the changes and ramifications of the lawsuit. I wanted to give you my take on it, and why I still feel very confident in the service I provide to my clients.
What is the Lawsuit About?
There are plenty of news stories and analysis on the lawsuit if you want to go in depth, but here is the basic version:
In a typical transaction, the seller pays on average a 6% commission fee that is split between the buying and listing agents. The lawsuit alleges that this standard rate sets prices higher than they would be if there were more competition.
As I said above, it will likely take several years for the impact of the lawsuit to show up as changes to the real-life experience of buying and selling a house, but many of the predictions are about how buying agents will have to adjust their commission fees to be more competitive in the market.
Here’s why I’m not as worried about that future:
Homebuying is a Process, Not Just a Transaction
People don’t come to me and say, “I’d like one house please” and then pay the tab. We talk, we get to know each other, we go on showings, and we search for that perfect house to make a home. When we get to the closing, that’s the culmination of a journey that we’ve gone on together.
I’ve Always Been Transparent About My Fees
Whether you’re a first-time homebuyer or someone with a lot of experience, I always make sure to explain what you’re getting from me when you choose to work with me, and how I get paid for that work. The process can be confusing, especially if you’re new to it, and I want my clients to have complete confidence that our goals are aligned.
What are those goals? For me, it’s to do every possible thing I can to get you that house you want. I’m on the phone all the time. I’m out there on weekends. I’m making the connections so I can stay ahead of the curve. I don’t want to put down any hard-working realtor out there, but I will say that I’ll put my work ethic and my track record up for comparison any day.
Relationships with Selling Agents Will Still Be Important
In the real estate world, I think it’s fair to say that it’s about what you know and who you know. The cooperative dance between buying agent and listing agent is actually an elegant solution to the complicated process of buying an expensive product (a house) in a market where prices change based on factors like inventory, interest rates, changes in neighborhoods, and many more variables.
Real estate agents need to know market trends and statistics, and we also need to know our colleagues in the community in order to facilitate our client’s mutual goals of buying and selling a house at a fair price for both parties. Dealing with other agents fairly and honestly creates relationships that benefit our future clients.
Some of the specific benefits of those relationships: transactions that move more quickly, a useful heads up on upcoming listings, and fewer surprises along the way.
Long story short, nobody really knows how this lawsuit will play out at this point in time. There’s a lot more to come, including the NAR’s current appeal of the verdict.
In the meantime, I will keep doing what I love to do—doing all that’s in my power to find my clients the home of their dreams and help them close the deal!
