RE/MAX settled for $55M.  Anywhere Real Estate (formerly Realogy) settled for $85M.  This leaves HomeServices, NAR and Keller Williams as the last three standing in their fight to stop time.  The trial date is set for October 16, 2023.  Either settle or go to trial.  HomeServices and Keller Williams have yet to make public comments. 

NAR on the other hand plans to fight for their cause as long as it takes.  According to NAR the recent settlements of some of their co-defendants has “no bearing” on their case.   

The “Third-Rail” has been Breached!

Touch the 3rd rail and, as legend says, get the shock or your life!  It will hurt you!   In the real estate world, the “third-rail” has always been the Buyer’s Agent compensation.   Touch that “Buyer’s Agent” commission and the entire process of selling homes as we know it changes.  

In settling their lawsuits, Anywhere and RE/MAX have also said they will no longer require their Sellers to pay the commission of the agent they are negotiating against.  Meaning there won’t be any more formal protection for the Buyer’ agent.  This is far more than a “touch” of the 3rd-rail; it’s more of a face plant! 

The very well-paid lawyers at RE/MAX and Anywhere Real Estate saw the DOJ’s case against them.   They opted to pay out over a $100M dollars and forever change their client’s business models.  Think they do that lightly?  What did they see that Keller Williams and NAR seemingly can’t? 

In the future, all agents will have to do with less.  Period.  The public has always HATED the idea of sellers having to pay for their Buyer’s Agent.  It made no sense and it aggravated people to the brink.   They revolted and now they have won. 

Agent income will be significantly impacted by these Court rulings.  It will probably be another 6-9 months before the ramifications of the Court’s decisions are fully realized by the public.  But the upshot of all this high-powered lawyering will be a new standard in “listing fees”.  Welcome to the 3% listing world where the Buyer’s agents be damned.     

Sounds cruel.  MBA types calling it “rightsizing” doesn’t make it any better.  We all kind of knew this day would come.  What happens next?   I have NO idea.  But I can tell you what’s happening in Florida.  The 3% listing commission has already taken root.   The Listing agent does a share of either 1% or 1.5% percent depending on the situation.  What used to be 3% for the Buyer’s Agent is now a third or half of what it used to be.  The new standard in Florida.  Is Florida normal—GOD NO! But consumers will love this. 

As in all things, Florida is wildly different.   It only seems like 90% of its population has a realty license.  Whatever the number, Florida leads the world in realtors per capita.   Worse yet, most of these agents are older and are no longer into real estate for the money per se.  It’s something to do and it creates spending cash for the Casinos. 

Why mention Florida?  These rulings do nothing to abate the number of part-timers entering our industry.   As a matter of fact, the lowering of agent income will only help cement the trade of real estate as a part-time gig.   Don’t think that’s possible?  Consider our housing inventory over the next ten years.  Low inventory numbers bring in low DOM numbers.  Low DOMs mean homes are basically selling themselves.  People are waiting for houses to come on the market.  Full-time franchise agents will continually have a tougher time selling their Broker’s “value added” proposition?

Wynd Realty will forever be commission agnostic.  How an agent chooses to run their business, all legalities aside, isn’t really our concern.    Agents have their plans, and they should be allowed to execute them as they see fit. 

Our job here is not to blow smoke, misdirect, or sell pipe dreams.  Our goal is to offer an honest assessment of the situation.  That said, these lawsuits are HUGE.  It may take a little time for the public to catch up, but every agent will run into these changes in 2024. 

Challenges are ahead.  Wynd Realty with its simple, low-cost approach coupled with our large agent community offers agents a safe haven while navigating through change. 

 

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