Where Real Estate Gets Its Dirt

Industry Relations Episode 062: The DOJ Reneged on Its Settlement with NAR—What Happens Next?

Early this month, in an unprecedented move, the Department of Justice pulled out of its proposed settlement with NAR. And soon thereafter, President Biden issued an Executive Order on Promoting Competition in the American Economy

An executive order with a specific clause concerning ‘exclusionary practices in the brokerage or listing of real estate.’ So, what’s going to happen next?

On this episode of Industry Relations, Rob and Greg discuss what Biden’s executive order means for real estate, describing the kind of regulations the FTC might impose on the industry in 2022.

They address the influx of institutional capital in real estate in the last two years, exploring what that could mean for buyer’s agent commissions and why it actually might be good for NAR’s renegotiation with the DOJ. 

Listen in for insight on the need for price discrepancy between a good and bad buyer’s agent and get Rob and Greg’s opposing predictions on how the government might change the rules around cooperation and compensation—or not.

What’s Discussed:  

How the DOJ reneged on its settlement with NAR and why it’s a big deal

What Biden’s executive order on competition means for real estate

The ideas re: concentration of power behind the Bradeis movement

Why Rob thinks the real estate lobby is at its weakest right now

Greg’s prediction that mortgage banks will step in to keep buyer’s agent commissions the same

The influx of institutional capital in real estate in the last two years (and why that might be good for NAR’s renegotiation)

The number of new business models designed to help consumers buy, sell and finance homes 

Rob’s view that institutional investors will support the elimination of buyer’s agent commissions

The lack of price discrepancy between a good and bad buyer’s agent in real estate

Rob’s thought experiment re: whether the rich need buyer’s agents

Rob’s prediction that the FTC will issue proposed regulations for real estate

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

Resources:

Blockchain and Real Estate on Notorious POD EP022

Propy

Justice Department Withdraws from Settlement with the National Association of Realtors

Rob’s Post on the DOJ Pulling Out of Its Settlement with NAR, Part 1

Rob’s Post on the DOB Pulling Out of Its Settlement with NAR, Part 2

Biden’s Executive Order on Promoting Competition in the American Economy

‘Amazon’s Antitrust Paradox’ by Lina M. Khan

‘BlackRock Is Not Ruining the US Housing Market’ in The Atlantic

Rob’s Response to The Atlantic Article

Knock Home Swap

Orchard

Tomo

Rob’s Post: Do the Rich Need Buyer’s Agents?

Our Sponsors: 

Cloud Agent Suite

Notorious VIP

  1. Great discussion as always, guys. What makes you two great together is that on a scale of 1-10 if Rob saying everything is armaggedon is a 1, and Greg says everything is status quo is a 10, we can be pretty sure that you’re both wrong and it ends up somewhere around a 5. 😛

    Something to chew on – Rob keeps bringing up the fact that US commissions are the highest in the world. And for the last few decades, all anti-trust policy has been written towards the idea that anything that makes it cheaper for the consumer is a good thing. But, if you look at the Executive Order as a whole, and you look at the paper written by Lina Khan, I think you could make the argument that sentiment is shifting. Google and Facebook are both completely free to consumers. Amazon is extremely cheap for consumers. If cheaper = better, why are they being targeted?

    I think the focus on the big tech companies in this political rotation actually helps real estate, because we can use them to difuse the “COMMISSIONS ARE TOO DAMN HIGH!” argument. You can point to all the innovation that the MLS has driven in the last two decades. You can point to international real estate groups getting involved with RESO and wanting to emulate us. You can point to the plethora of business models and tech companies popping up.

    Then you point at Facebook, Google, and Amazon – what innovation have they driven outside of their own company? What competition have they enabled? There’s nothing cheaper than free, but are Facebook and Google’s policies truly good for the consumer?

    I feel like now is a good time to say, “Yeah, we’re the highest, but it’s for a reason. At least we aren’t *those* guys.”

    I just don’t feel like the high commissions are the target, even if that is the calling card of MLS opponents with political influence. I feel like transparency and removing obstacles to competition is the target. If the DOJ and the FTC can regulate that, then the high commissions will either stay where they are because they are worth it, or they will fall because the consumer doesn’t see the value. Take off the blinders, remove the obstacles, and let the free market decide.

Sponsored By REcore