The issue that brought the National Association of Realtors (NAR) to court was not about commission transparency but the detrimental impact of anti-competitive policies. These policies severely restricted competition among members, leading to home sellers paying higher commissions than they could have negotiated in a more open market.
If you listen to the NAR and its advocates, you’d think the association lost in court because it was the victim of an unfair scheme perpetrated by lawyers to destroy the ability of Realtors to make a living. I listened to a Wisconsin Realtors Association attorney open a discussion with that tact. The argument might sound better in the WRA echo chamber than it does in the fresh air of an open forum. For some of us who believe competition is good for consumers and consumer choice is good for everyone, the “victim of circumstances” line was painfully dull.
To avoid being bankrupted by legal costs trying to overturn the decision, the NAR negotiated a settlement they could pass off to members and struck a deal to make a minor change, which they were prepared to work around. The NAR just made a post that shows their intention. NAR Compensation Concessions
Is the NAR resisting change?
It should not go unnoticed that one aspect of the lawsuit settlement allows the NAR to continue in business without admitting any wrongdoing. Real change is unlikely when the system permits anyone to carry on without acknowledging responsibility. Here’s a quote from an August 13, 2024 NAR story in their recently published magazine:
Offers of compensation benefit both buyers and sellers. For buyers, it promotes access to representation throughout the homebuying process, which will help consumers achieve the dream of homeownership on terms that work best for them. For sellers, it helps to broaden the pool of prospective buyers by lowering the barrier to entry for those that may not be able to afford to pay buyer agent compensation out of pocket.
As a Realtor member who created a business model that gives consumers a choice to offer as little as zero commission to buyer agents BEFORE seeing the terms of all offers, I interpret that NAR statement as void of facts and an overt attempt to force commission-sharing compliance.
The Essential Real Estate business model was ahead of its time in 2020 when we first came into the market. Beginning on August 17th, we will see more agents adopt the strategy. While our position of exclusivity may be fading, we see the spread of the strategy good for consumers and good for our industry. With our five years of experience perfecting the commission negotiating strategy, and the NAR’s continuing effort to force compliance with the old ways, I don’t see most of the Realtor members catching up to us.
As I watch the NAR try to hold on to the past, I am reminded that as lightly as the NAR was let off, the lawsuit does not free the NAR from future lawsuits for denying consumers the freedom to negotiate.