Governing with Milquetoast

It’s like watching paint dry without all the drama!   

The U.S. Department of Justice is a funny thing.   Individually the DOJ is comprised of thousands of highly educated legal professionals.  But collectively they function more like their counterparts from the movie, “Idiotocracy”.    So how did so many smart people become so dumb?

The DOJ has been in legal wars with the National Association for Realtors (NAR) for years now.  We are still a couple years away from learning that nothing will ever come of any of this work.  What started out with hope and promise has become both sad and tragic    As a matter of fact, as the DOJ involvement increased, it became stunningly obvious they were in over their heads and severely outmatched.  Or, put another way, NAR has way better lawyers!

This was a simple case of commissions.  Specifically, the Buyers Agent’s commission and who pays it?  Why is the seller responsible for compensating the sales agent they are negotiating against?  Outside of the NAR monopoly world, where else does this happen?  What business school teaches its MBAs grads that it’s a good idea for sellers to cede part of the equity they have earned over the years to the sales agent their Buyers choose to fill out some forms? 

NARs case: “there’s no proof sellers would have saved money in a world where they didn’t cover the costs of the buyer’s agent”.  “Don’t blow up real estate’s compensation model because there’s no proof it isn’t working”.  This is absolute madness!

Remember the DOJ does squat unless it HAS to.  The reason the “NAR War” finally started was because DOJ’s backlog of consumer complaints had become undeniable.   Hundreds of thousands of sellers complained it wasn’t fair they were forced to pay both sales agent’s commissions.  A simple concept, you would have thought. 

NAR’s position is a slight of hand.  Its only “one” commission because one Broker shares with the other.   Both agents are getting paid, but it’s only one commission.  As if that somehow negates actual reality and all the consumer complaints. It’s total BS!   Everything with NAR is a misdirection from what you’d think to be logical.

Aside from NAR being very good at what they do, the DOJ is a cluster.  Less than useless.  What started out as an opportunity to finally makes some changes to the commission structure of the real estate industry quickly spiraled into a bloated, unmanageable mess of a class-action suit with no hope of survival. 

Not happy with simply changing policy going forward, the NAR War tried to re-coup lost money on behalf of sellers dating back nearly a decade.  Sounds great, doesn’t it?  Stupid as hell in practical terms.    NAR simply took the hand of the DOJ and walked them right into their own bureaucratic abyss.  It’s effective, but time consuming.  Remember, the DOJ isn’t aware they are the ones being led.

Good News

The line has held.  Our commission structure will stand for another generation.   I really can’t say its something to celebrate.  I have heard the complaints of too many sellers.  I feel their frustration and have experienced it in my own life.  It sucks to lose money to a, “system”. 

That said, having sellers pay the Buyer’s agent has been going on for over 50 years.  Kind of the law of the land at this point.  And, there is NO WAY the United States Government would ever turn back 50 years of precedent!  Oh, wait…

Just remember, as you read this there are sellers in Inman Park, Buckhead, and parts of east Cobb that losing money to buyer’s agents right NOW!  Search neighborhoods with DOMs of less than 35.  Count how many buyer agents collected the full 3%.  Full commissions representing people waiting to buy.  Do you think those sellers deserved that?  I don’t. 

The NAR War will drag on for a couple more years as legal teams’ scrum for money.  For most in the real estate community, the War has already been forgotten.  Almost as if it never happened.   Dare we quote the most famous Realtor of all time: I won’t, but you get the idea. 



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