Where Real Estate Gets Its Dirt

The Consumer Won’t Fix This. The Lawyers Might.

The “Enshittification” of Home Buying

Brian Boero wrote a good one about how home search keeps getting worse and how nobody’s coming to save the buyer. He’s right that the buyer won’t save themselves. I just think he’s looking at the wrong rescuers.

“The Consumer is an abstraction; the empowered real estate consumer is largely a fiction.”

True. No consumer uprising is coming. People will put up with a worse home search the same way they put up with worse airlines and smaller candy bars.

Boero says “in time, the regulators may do something about it.” They already are. Washington passed a law that says listings have to be marketed to everybody. Connecticut and New York wrote the warning into the paperwork sellers sign. More states are lined up for January.

But regulators are the slow lane. The fast lane is the lawyers.

Last week the president of the NAACP, Derrick Johnson, wrote in Time that private listing networks are “more than an industry dispute. This is a civil rights issue.” His piece comes with numbers: sellers in majority-minority zip codes lose more when a home stays off the MLS, and MLS listings sell for around 17.5% more than off-MLS ones.

Read that again as a plaintiff’s attorney. You’ve got a protected class, a measurable harm, and a price gap you can put in front of a jury. And you don’t have to prove anybody meant to discriminate. A Texas broker laid the theory out back in March: under the Fair Housing Act, “You don’t have to prove anyone intended to discriminate.” Disparate impact does the work.

If that sounds familiar, it should. That’s Sitzer/Burnett. A theory, a damages number, and a sympathetic class. The commission lawsuits started as a fringe argument too, right up until they cost the industry billions and rewrote the rulebook.

So no, the consumer won’t fix online search. But three other parties are lining up to take a swing at it. The statehouses. A U.S. senator (Elizabeth Warren just sent Compass and MRED 23 questions about fair housing risk). And the trial bar, which just got its opening argument handed to it by the NAACP.

Boero says all this is “only good for lawyers and reporters.” Speaking as one of the “reporters”, I’d keep an eye on the lawyers.

CRMLS starts 2025 with new vision

California Regional MLS Redefines Its Value and Helps Agents Best Articulate Theirs in New Campaign

“Following the commission lawsuits of 2024, the industry has been in a state of upheaval, leading to anxiety and uncertainty among many real estate professionals. CRMLS has recognized the need to help those unsure of how to articulate their value better express what they can offer their clients. With the philosophy that the situation for real estate professionals is “different, not difficult,” CRMLS has outlined its major tenets and how they each assist CRMLS users with their day-to-day and long-term business goals.”

There is a vacuum out there. With organized real estate under scrutiny in the press and on social media, organizations like CRMLS must let their customers know they understand the challenges ahead. As an industry, our leaders need to communicate that while one chapter has closed, a new one is beginning.

If you’re not doing that, you need to start. We must rise above the funk these lawsuits have left us in and take control of the narrative. The question is: who will fill that vacuum?

DOJ files eleventh hour statement of interest in Sitzer/Burnett Case

Tanya Monestier from her LinkedIn post:

“Well, I didn’t see this coming . . .

The DOJ has filed a statement of interest in Burnett. It’s not as detailed as the one in Nosalek, but two key points it makes:

1. Compliance with the NAR settlement does not insulate any defendant from DOJ antitrust action.

2. The requirement that an agreement be signed prior to touring a property may itself raise antitrust concerns.

Talk about a last-minute twist . . “

I actually think this is somewhat good news. What the DOJ takes issue with is the requirement for the buyer’s agreement to be executed before a home showing. They feel this could unnecessarily tie buyers to a single agent, limiting their opportunity to work with other agents and therefore reducing competition. I’ve always thought the timing of the buyer’s agreement signing was problematic. I’m hoping the judge makes a change here to move it closer to the offer stage.

The second matter relates to another antitrust issue. From my perspective, I don’t think anyone expected NAR or all the defendants to be completely off the hook for future antitrust claims. I believe the settlement even acknowledged that possibility. It seems the DOJ just wants to ensure that this point is absolutely clear.

The Economist interviews Rob Hahn on Money Talks podcast

Will America’s realtors change their ways?

“Agent commissions are a key part of how the US housing market operates. Realtors representing the seller and the buyer have typically taken a large cut of the sale price – usually 5% or 6%. Now the National Association of Realtors has lost a class action lawsuit brought by homesellers, claiming these high commissions are the result of anti-competitive practices. So will new rules, agreed in the settlement of this suit, bring down the cost of buying and selling a home?”

The Notorious ROB hits the big time! The podcast also includes Michael Ketchmark as a panelist. Super interesting to hear from the host’s non-American perspective of our real estate system.

Ben Thompson interviews new Zillow CEO Jeremy Wacksman

An Interview with Zillow CEO Jeremy Wacksman About Evolving Strategy

“This week’s Stratechery Interview is with new Zillow CEO Jeremy Wacksman. Wacksman is a long-time Zillow employee, having joined the company in 2009, three years after its founding. We also have a lot in common, including working at Microsoft after an MBA at Kellogg (we went in rather different directions since then!). Wacksman was previously COO of Zillow, and before that was CMO.”

Ben Thompson is the founder of Stratechery, which is one of my favorite technology blogs. Ben had previously interviewed Zillow co-founder and former CEO, Rich Barton. Barton has cited Ben’s writing about Opendoor as one of the reasons Zillow went in to iBuying. I would recommend listening to the interview via the Stratechery podcast. Access might require a subscription, which I highly recommend.

This is a great interview and really covers a lot of subjects including Jeremy’s background, Zillow’s early history, its business model evolution, its launch and then quick exit out of iBuying. But these three sections caught my attention. First is his thoughts his “pitch” on their upcoming “Super App”

“Well, give the Super App pitch. What is the overarching strategy, the shift away being an ads business to what you’re doing today?

JW: Yeah, the Super App pitch is that if I could give you a remote control on your phone so that the same way you can order an Uber or book an Airbnb, you could do all of your real estate transaction inside of the Zillow app. You could talk to your loan officer and your agent 24/7 via group chat. You could understand via a pizza tracker where your loan is and are you missing any documents and it could all be in one place.”

I have some thoughts on this I’ll save for a later post.

The other is about the impact of the NAR Settlement.

Give us the overview, you’re the expert.

“JW: The two high level changes are both about buyer and seller choice and education.
…..So in both cases, on the seller side, on the buyer side, it’s a more empowered customer, and it’s a more educated customer and we can come back to what we’re doing, we’re leaning into that education. On the buy side, we are innovating a touring agreement, like a dating form because we want to help educate customers before they get married to an agent. Well, what are you going to get into? What should you expect? What should a contract look like? And help them be informed about their choice before they make it, so that’s what changing.”

I like the analogy of a “dating form”.

And lastly on the fate of the MLS.

“JW: Our argument is again, we’re here for the customer and there is some real good in this marketplace and you can build a lot of good and we can grow our company really big in a world where there is listing sharing and there are all these benefits and all these things we are doing to grow our company to — you’d move back to a classified business model which isn’t really good for the buyer and the seller. So that’s the big part of why we’re like — but it was this weird argument where we’re talking to investors about like, “Well, yeah, the margin profile of that business might look better, Zillow would probably win more, but we don’t actually think that’s good”, it’s not really good for anyone. It’s definitely not even good for the suppliers who would in theory, enact it.”

Bravo.

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Industry Relations Podcast: Bravery and Impact of the MLS

Have you been keeping up with the latest updates in MLS policies? Rob and Greg break down the key details of Bright MLS’s clear cooperation policy and NWMLS’s decision not to remove compensation data from their system. But it doesn’t stop there. They also dive into the potential legal consequences for fair housing violations and federal antitrust claims.

They also touch on the Department of Justice’s involvement, implications for the industry, and potential risks for Northwest MLS and other players in the market.

Watch us on YouTube!

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

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This podcast is produced by Two Brothers Creative 2024.

CRMLS first out of the gate with new “concessions in price” fields

California Regional MLS Provides New “Concessions in Price” Fields for Greater Agent and Broker Communication

“In 2023, nearly 40% of CRMLS’s Closed listings included concessions, i.e., monetary payments that a seller agrees to contribute towards the buyer’s expenses and other costs a buyer is responsible for in the transaction. Historically, concessions were only included in Closed listings. The new CiP fields will provide concession information at the listing level and be directly available in the MLS, so seller agents can fill them out when adding a listing. CiP fields will benefit all parties as those on the selling side can more easily market listings while those on the buying side receive a clearer idea of financial options.”

CRMLS

CRMLS has taken the leadership position on these “CiP” fields. Very smart of them to launch prior to the deadline. This will give them some real world experience on implementation and make necessary adjustments if need be.

Sponsored By MLS Reset