Biden admin going after realtors!

[Anonymous]

As an agent we have to take training on anticompetitive practices.

The training just underscores how the industry has and continues to oppose price-reducing competition.

Why is this training in place? DOJ/FTC mandated consent decrees and settlements. That's why. Not because the industry embraces competition. The training is predicated on - is evidence of - the industry's opposition to competition.

When the law forces an industry to do the right thing, something the industry otherwise would not do, the industry does not get credit. In fact the industry looks worse, which is the case with the disgraced real estate industry.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:GOOD. Realtors are over paid for doing almost nothing in this market. Most never even went to college and just studied and took the state test.

Only 8% of realtors never went to college.
https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics

It’s not even about education. It’s about earning a years salary for most people in a weekend. Absurd.

This is a moronic comment. Become an agent already if you are so envious.

I’m not envious. They are a step above MLM. I have no desire to do and produce nothing only to skim off the top someone else’s money.

Now that everyone has access to basically a public MLS, houses sell themselves. Why are people making tens of thousands of dollars off it? And for about 10 hours of work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:GOOD. Realtors are over paid for doing almost nothing in this market. Most never even went to college and just studied and took the state test.

Only 8% of realtors never went to college.
https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics

It’s not even about education. It’s about earning a years salary for most people in a weekend. Absurd.

This is a moronic comment. Become an agent already if you are so envious.

I’m not envious. They are a step above MLM. I have no desire to do and produce nothing only to skim off the top someone else’s money.

Now that everyone has access to basically a public MLS, houses sell themselves. Why are people making tens of thousands of dollars off it? And for about 10 hours of work.

+1

Human traffickers make good money, I presume.

Responding to criticism of the practice with "become one if you are so envious" is deeply stupid.

[Anonymous]

Anonymous wrote:

Anonymous wrote:This is how realtors compete: know what you are doing, work very hard, get a good reputation, and make people realize your value.

I'd say 90% of the agents with whom I deal are more worried about getting to a spin class or taking a nap than actually working.

They should compete on price, too. Maybe you'll take a less experienced realtor in exchange for a different pay structure. And maybe that competition would cause a lot of more experienced ones to lower their rates or figure out other ways of getting paid to compete.

So far this year, I have taken over 7 listings from less experienced realtors who took lower commissions, including one from my own company. I never lower my commission and sold every house -- including one that had been on the market for nearly six months -- in 7 to 19 days. These were not Redfin agents (who I find to be very good as buyer agents) but big company agents who are cannon fodder for the real estate industry. Two of them had the gall to ask me for referral fees when I sold the houses. I wade through the swill of real estate every day and can compete with anyone.

I would be delighted if there were fewer agents. They just create problems.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is how realtors compete: know what you are doing, work very hard, get a good reputation, and make people realize your value.

I'd say 90% of the agents with whom I deal are more worried about getting to a spin class or taking a nap than actually working.

They should compete on price, too. Maybe you'll take a less experienced realtor in exchange for a different pay structure. And maybe that competition would cause a lot of more experienced ones to lower their rates or figure out other ways of getting paid to compete.

They already do this. You think that Redfin agent has the experience and network of the high grossing agents? Also many new agents cut fees to get business and many experienced agents do as well.

As an agent we have to take training on anticompetitive practices. I never say “the typical commission is”. I say “my fee is…” and many times I’m asked lower it, and sometimes I do.

The issue (from an antitrust perspective) is an agreement among realtors who should be competing to a standard commission that is the starting point of any negotiations. Whether non-NAR agents operate differently, and whether NAR agents bargain occasionally, is not really a defense. My guess is that when you say "my fee", you are giving the 6% figure that is standard, and that any negotiations lower proceed from there. That's the issue.

Hey anti-trust genius, you just violated the law by declaring "you are giving the 6% figure that is standard." There is no standard fee.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is how realtors compete: know what you are doing, work very hard, get a good reputation, and make people realize your value.

I'd say 90% of the agents with whom I deal are more worried about getting to a spin class or taking a nap than actually working.

They should compete on price, too. Maybe you'll take a less experienced realtor in exchange for a different pay structure. And maybe that competition would cause a lot of more experienced ones to lower their rates or figure out other ways of getting paid to compete.

They already do this. You think that Redfin agent has the experience and network of the high grossing agents? Also many new agents cut fees to get business and many experienced agents do as well.

As an agent we have to take training on anticompetitive practices. I never say “the typical commission is”. I say “my fee is…” and many times I’m asked lower it, and sometimes I do.

DP. How does your network help me when I can put together my own list of potential houses from Redfin and Zillow?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is how realtors compete: know what you are doing, work very hard, get a good reputation, and make people realize your value.

I'd say 90% of the agents with whom I deal are more worried about getting to a spin class or taking a nap than actually working.

They should compete on price, too. Maybe you'll take a less experienced realtor in exchange for a different pay structure. And maybe that competition would cause a lot of more experienced ones to lower their rates or figure out other ways of getting paid to compete.

They already do this. You think that Redfin agent has the experience and network of the high grossing agents? Also many new agents cut fees to get business and many experienced agents do as well.

As an agent we have to take training on anticompetitive practices. I never say “the typical commission is”. I say “my fee is…” and many times I’m asked lower it, and sometimes I do.

The issue (from an antitrust perspective) is an agreement among realtors who should be competing to a standard commission that is the starting point of any negotiations. Whether non-NAR agents operate differently, and whether NAR agents bargain occasionally, is not really a defense. My guess is that when you say "my fee", you are giving the 6% figure that is standard, and that any negotiations lower proceed from there. That's the issue.

Hey anti-trust genius, you just violated the law by declaring "you are giving the 6% figure that is standard." There is no standard fee.

This is hilariously dumb.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The only thing that will happen if you untie the two fees is that buyers will lose free representation, and sellers will keep 2-3 percent more profit.

Sellers could take a lower price because their net would be higher. A lot of deals fall apart because the buyer and seller can't agree to price. Changing the realtor fees to 2% would get them 2-3% closer than the current 4-5% commissions.

I don't know why this is not discussed more. What is more likely to sell a home quickly? A top notch realtor or a price that is 5% under the market of the realtor-represented ones?

Also that for some reason realtors commission is on the gross and not the net. That makes no sense, nothing else I can think of is comped that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This is how realtors compete: know what you are doing, work very hard, get a good reputation, and make people realize your value.

I'd say 90% of the agents with whom I deal are more worried about getting to a spin class or taking a nap than actually working.

They should compete on price, too. Maybe you'll take a less experienced realtor in exchange for a different pay structure. And maybe that competition would cause a lot of more experienced ones to lower their rates or figure out other ways of getting paid to compete.

They already do this. You think that Redfin agent has the experience and network of the high grossing agents? Also many new agents cut fees to get business and many experienced agents do as well.

As an agent we have to take training on anticompetitive practices. I never say “the typical commission is”. I say “my fee is…” and many times I’m asked lower it, and sometimes I do.

DP. How does your network help me when I can put together my own list of potential houses from Redfin and Zillow?

+1 The "network" thing is bogus with today's technology. One realtor told us she found the perfect pocket listing. I spent an hour researching it and discussing with DH. Then they never found a time they wanted to show it after a week of back and forth. It was never really on the market. Another desperate attempt to create "value" that ended up wasting our time. Serious sellers put their homes on the market or sell off market without a realtor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only thing that will happen if you untie the two fees is that buyers will lose free representation, and sellers will keep 2-3 percent more profit.

Sellers could take a lower price because their net would be higher. A lot of deals fall apart because the buyer and seller can't agree to price. Changing the realtor fees to 2% would get them 2-3% closer than the current 4-5% commissions.

I don't know why this is not discussed more. What is more likely to sell a home quickly? A top notch realtor or a price that is 5% under the market of the realtor-represented ones?

Also that for some reason realtors commission is on the gross and not the net. That makes no sense, nothing else I can think of is comped that way.

This. The lower price is much more likely to sell the home quickly. No seller's realtor can squeeze more money from a buyer. The most they can do is avoid hampering the deal, which unfortunately seems to happen a lot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only thing that will happen if you untie the two fees is that buyers will lose free representation, and sellers will keep 2-3 percent more profit.

Sellers could take a lower price because their net would be higher. A lot of deals fall apart because the buyer and seller can't agree to price. Changing the realtor fees to 2% would get them 2-3% closer than the current 4-5% commissions.

I don't know why this is not discussed more. What is more likely to sell a home quickly? A top notch realtor or a price that is 5% under the market of the realtor-represented ones?

Also that for some reason realtors commission is on the gross and not the net. That makes no sense, nothing else I can think of is comped that way.

This. The lower price is much more likely to sell the home quickly. No seller's realtor can squeeze more money from a buyer. The most they can do is avoid hampering the deal, which unfortunately seems to happen a lot.

It is because the seller and buyer agent make more when the price is higher, and of course, the industry as a whole (where commissions are based on percentage of sales price) benefits more with higher overall prices.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

I think a good test case is the new construction industry. Because it is an industry where many buyers are already unrepresented. And speaking firsthand, you should see some of the horrible stuff builders get away with with unrepresented buyers or buyers represented by agents who are not knowledgeable about new construction.

In a new construction transaction in the DC area, if a buyer brings an agent to the transaction, the builder pays the commission for the Agent. Many times the agent is even able to offer a rebate to the buyer. Meanwhile, the builders around here, do not generally offer concessions to this buyers were not represented by agents.

I’m sure builders would absolutely love to do away with the model where the seller pays the buyers agent. So basically, the only buyers, who will bring real estate agents to the table are those buyers who can afford to bring real estate agents to the table. And unfortunately, those are the people who probably least need a real estate agent.

Do you really think that a builder is going to cut their sale price by two or 3%? They will not. They will price at the absolute highest at the market can bear. So, same sales price for them, higher profit because they are not paying agents. And buyer sees no benefit and has no representation unless they are willing to pay for it as they go.

I think the problem is the overall analysis assumes that it is due to agent fees that home sales prices are inflated. But really, all the commission does is take money out of the sellers net profits. There is not a one for one correlation between agent fees and Home prices. You can see it in the industry today. For sale by owners always insist on the comparable price. Are you really going to list your home as a for sale by owner and price at 3% less because you don’t have an agent? No, you’re obviously not. You’re going to list it at the highest comparable price and probably still insist that you are not going to pay the buyers agent.

This whole thing would be great for sellers, not good for homebuyers though

What is meant by “overall analysis”, “this whole thing”? The pending NAR lawsuits and anti-trust action by the DOJ/FTC, I assume. Your post does not specify exactly.

[E]specially homebuyers who are first timers, and do not know much about the process and don’t have cash on hand to hire an agent.

Your overall concern seems to be the outcome that anti-trust litigation – prohibiting realtor fee “tying”, “steering” regulation, etc.. - will have on builders of homes and some buyers of new construction, buyers who require agents but cannot afford their services.

But if the current real estate practices violate anti-trust law, is the remedy to ignore regulations designed to promote competition and drive down consumer prices because the prosperity of the building industry depends on them being ignored? ( No if you are pro-consumer and pro-rule-of-law; Yes if you are pro-building industry )

The subset of buyers who require buying agents but cannot afford them will choose more affordable living alternatives. That mat not be ideal for the building industry, but that is a them problem; I’m confident the US construction industry would adjust to equilibrium and substitution effects.


Many countries do not have the real estate arrangements presently under scrutiny in the United States. As I understand, they build homes. They buy and sell homes, often at roughly half the commission cost. Those who cannot afford to purchase a home have the option to lease.

I don't think the outcome of the litigation is necessarily that buyer's agents will no longer be paid from seller's agents.

It's not inevitable, but it is clearly the relief sought. An(other) out of course settlement could keep it in place.

It could be that the structure of the arrangement stays the same but the percentages are lower.

The lawsuit alleges high commissions are a product of the arrangement. Doubtful that will be the outcome of this particular action is decided.

My guess is that realtors will come up with more ways to compete if they aren't allowed to prevent competition as they've been doing.

The hope is that impediments to competition will be removed subjecting realtors to price compete in a downward price pressure context like every other industry.


[10] If NAR’s Adversary Commission Rule were not in place, then the cost of buyer broker commissions would be paid by their clients (home buyers). Buyer brokers would thus have to compete with one another by offering a lower commission rate. The Adversary Commission Rule thereby restrains price competition among buyer brokers because the person who actually retains the buyer broker — the home buyer — does not negotiate or pay the commission for his or her broker.

[22] Moreover, in the absence of the Adversary Commission Rule, seller brokers would likely face additional competitive pressures. That is, instead of following long-time practice of setting total commissions at or near 6% and assigning roughly half of that amount to themselves and roughly the other half to the buyer broker commission (and selecting that amount at a level to remain in the good graces of buyer brokers), seller brokers would set a commission to pay themselves alone and would likely begin to engage in more vigorous competition with one another to lower their rates and/or provide additional services to justify their newly transparent rates

- Burnett et al. v. National Association of Realtors®, et al., Third Amended Class Action Complaint

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

I think a good test case is the new construction industry. Because it is an industry where many buyers are already unrepresented. And speaking firsthand, you should see some of the horrible stuff builders get away with with unrepresented buyers or buyers represented by agents who are not knowledgeable about new construction.

In a new construction transaction in the DC area, if a buyer brings an agent to the transaction, the builder pays the commission for the Agent. Many times the agent is even able to offer a rebate to the buyer. Meanwhile, the builders around here, do not generally offer concessions to this buyers were not represented by agents.

I’m sure builders would absolutely love to do away with the model where the seller pays the buyers agent. So basically, the only buyers, who will bring real estate agents to the table are those buyers who can afford to bring real estate agents to the table. And unfortunately, those are the people who probably least need a real estate agent.

Do you really think that a builder is going to cut their sale price by two or 3%? They will not. They will price at the absolute highest at the market can bear. So, same sales price for them, higher profit because they are not paying agents. And buyer sees no benefit and has no representation unless they are willing to pay for it as they go.

I think the problem is the overall analysis assumes that it is due to agent fees that home sales prices are inflated. But really, all the commission does is take money out of the sellers net profits. There is not a one for one correlation between agent fees and Home prices. You can see it in the industry today. For sale by owners always insist on the comparable price. Are you really going to list your home as a for sale by owner and price at 3% less because you don’t have an agent? No, you’re obviously not. You’re going to list it at the highest comparable price and probably still insist that you are not going to pay the buyers agent.

This whole thing would be great for sellers, not good for homebuyers though

What is meant by “overall analysis”, “this whole thing”? The pending NAR lawsuits and anti-trust action by the DOJ/FTC, I assume. Your post does not specify exactly.

[E]specially homebuyers who are first timers, and do not know much about the process and don’t have cash on hand to hire an agent.

Your overall concern seems to be the outcome that anti-trust litigation – prohibiting realtor fee “tying”, “steering” regulation, etc.. - will have on builders of homes and some buyers of new construction, buyers who require agents but cannot afford their services.

But if the current real estate practices violate anti-trust law, is the remedy to ignore regulations designed to promote competition and drive down consumer prices because the prosperity of the building industry depends on them being ignored? ( No if you are pro-consumer and pro-rule-of-law; Yes if you are pro-building industry )

The subset of buyers who require buying agents but cannot afford them will choose more affordable living alternatives. That mat not be ideal for the building industry, but that is a them problem; I’m confident the US construction industry would adjust to equilibrium and substitution effects.


Many countries do not have the real estate arrangements presently under scrutiny in the United States. As I understand, they build homes. They buy and sell homes, often at roughly half the commission cost. Those who cannot afford to purchase a home have the option to lease.

I don't think the outcome of the litigation is necessarily that buyer's agents will no longer be paid from seller's agents.

It's not inevitable, but it is clearly the relief sought. An(other) out of course settlement could keep it in place.

It could be that the structure of the arrangement stays the same but the percentages are lower.

The lawsuit alleges high commissions are a product of the arrangement. Doubtful that will be the outcome of this particular action is decided.

My guess is that realtors will come up with more ways to compete if they aren't allowed to prevent competition as they've been doing.

The hope is that impediments to competition will be removed subjecting realtors to price compete in a downward price pressure context like every other industry.


[10] If NAR’s Adversary Commission Rule were not in place, then the cost of buyer broker commissions would be paid by their clients (home buyers). Buyer brokers would thus have to compete with one another by offering a lower commission rate. The Adversary Commission Rule thereby restrains price competition among buyer brokers because the person who actually retains the buyer broker — the home buyer — does not negotiate or pay the commission for his or her broker.

[22] Moreover, in the absence of the Adversary Commission Rule, seller brokers would likely face additional competitive pressures. That is, instead of following long-time practice of setting total commissions at or near 6% and assigning roughly half of that amount to themselves and roughly the other half to the buyer broker commission (and selecting that amount at a level to remain in the good graces of buyer brokers), seller brokers would set a commission to pay themselves alone and would likely begin to engage in more vigorous competition with one another to lower their rates and/or provide additional services to justify their newly transparent rates

- Burnett et al. v. National Association of Realtors®, et al., Third Amended Class Action Complaint

Not to quibble, but I think the difference is important: the relief sought (aside from damages) is an end to the anticompetitive conduct, which is the agreement to a rule that raises commission rates. Whether getting rid of that illegal agreement ultimately means the end of commission splitting between sellers and buyers and is a separate matter altogether. The complaint sets forth what they allege would happen in the "but for" world--the world that would exist but for the anticompetitive conduct--but that is different than the relief being sought.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only thing that will happen if you untie the two fees is that buyers will lose free representation, and sellers will keep 2-3 percent more profit.

Sellers could take a lower price because their net would be higher. A lot of deals fall apart because the buyer and seller can't agree to price. Changing the realtor fees to 2% would get them 2-3% closer than the current 4-5% commissions.

I don't know why this is not discussed more. What is more likely to sell a home quickly? A top notch realtor or a price that is 5% under the market of the realtor-represented ones?

Also that for some reason realtors commission is on the gross and not the net. That makes no sense, nothing else I can think of is comped that way.

This. The lower price is much more likely to sell the home quickly. No seller's realtor can squeeze more money from a buyer. The most they can do is avoid hampering the deal, which unfortunately seems to happen a lot.

It is because the seller and buyer agent make more when the price is higher, and of course, the industry as a whole (where commissions are based on percentage of sales price) benefits more with higher overall prices.

It has been shown statistically that the opposite is true, and realtors overall make MUCH more with faster sales:

When she sells her own house, an agent holds out for the best offer; when she sells yours, she encourages you to take the first decent offer that comes along. Like a stockbroker churning commissions, she wants to make deals and make them fast. Why not? Her share of a better offer—$150—is too puny an incentive to encourage her to do otherwise.

https://forum.nachi.org/t/exerpt-from-freakonomics-book-regarding-real-estate-agents/56492

https://freakonomics.com/2008/02/real-estate-agents-revisited/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only thing that will happen if you untie the two fees is that buyers will lose free representation, and sellers will keep 2-3 percent more profit.

Sellers could take a lower price because their net would be higher. A lot of deals fall apart because the buyer and seller can't agree to price. Changing the realtor fees to 2% would get them 2-3% closer than the current 4-5% commissions.

I don't know why this is not discussed more. What is more likely to sell a home quickly? A top notch realtor or a price that is 5% under the market of the realtor-represented ones?

Also that for some reason realtors commission is on the gross and not the net. That makes no sense, nothing else I can think of is comped that way.

This. The lower price is much more likely to sell the home quickly. No seller's realtor can squeeze more money from a buyer. The most they can do is avoid hampering the deal, which unfortunately seems to happen a lot.

It is because the seller and buyer agent make more when the price is higher, and of course, the industry as a whole (where commissions are based on percentage of sales price) benefits more with higher overall prices.

It has been shown statistically that the opposite is true, and realtors overall make MUCH more with faster sales:

When she sells her own house, an agent holds out for the best offer; when she sells yours, she encourages you to take the first decent offer that comes along. Like a stockbroker churning commissions, she wants to make deals and make them fast. Why not? Her share of a better offer—$150—is too puny an incentive to encourage her to do otherwise.

https://forum.nachi.org/t/exerpt-from-freakonomics-book-regarding-real-estate-agents/56492

https://freakonomics.com/2008/02/real-estate-agents-revisited/

Indeed.

The commission scheme incentivizes frequent sales.

In addition to Levitt & Syverson, an example :

For example, if an agent expected that spending 30 extra hours would increase the selling price of a home by about $10,000, the 3 percent listing agent’s commission on that increase ($300), translating to $300/30 = $10/hour, or more likely $7/hour,[13] would hardly seem likely to motivate the agent to invest the time .

[13] Actually, both buyer and seller agents usually share their commissions with their brokers, with the agents typically retaining 70% of the commission. So here, the agent would receive 70% of the $300 = $210 for 30 hours

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3571088

There is zero real monetary incentive ($7/hour) for a seller agent to maximize returns for the seller, nor any incentive for the buyer agent to minimize price for the buyer.