Rob provides insight on the recent NAR settlement and industry changes for buyers, sellers and the National Association of Realtors.
Video Transcript:
There’s been a lot of misinformation in the media about the National Association of Realtors lawsuit and settlement. In fact, there were headlines in articles which the headlines themselves had misinformation so I'm going to see if I can give some clarity especially to the clients of Rob Brooks Realty on what's going on with that lawsuit and settlement. So, the lawsuit was where attorneys claimed that sellers were treated unfairly in how they paid the buyers, real estate companies commissions, and so the settlement has to do with four main things.
Number One: The National Association of Realtors said that they had no wrongdoing in anything. In fact, they said that what system there was for paying real estate companies working with Buyers indirectly by the sellers was helpful to the entire real estate industry and it fostered competition. So, there was more competition because of what they did.
Number Two: In the settlement, the National Association of Realtors agreed to pay $418 million over a period of 4 years. Members of the National Association of Realtors will likely participate in that through indirect means over the years.
Number Three: The National Association of Realtors said that there would no longer be any allowance for listing companies working with sellers to make offers of compensation through the multiple listing service, or MLS, to real estate brokerages that are working with Buyers. Now, quick historical tutorial on that, is that one of the main reasons that the multiple listing service was established by realtor organizations was so that communication of compensation could be made. Well now that is no longer allowed. It can be done by the way of an agreement of compensation between listing company and buyer broker companies, can be done through means outside of the MLS.
Fourth part of the settlement is that Realtor companies that are working with buyers must have a form signed from the buyers that shows that they will be working with this company and that it outlines the services and compensation made from the buyer to that real estate company. So, those are the four main things that are a part of the settlement.
Are there going to be winners or losers in this change? Absolutely. So is the public going to be a winner or a loser as a result of the settlement? I could see it going either way. I've done some research on it and I can see where some would argue that the consumer will be a winner as a result of the way that monetary is paid a little bit differently, and then I can see where the public will be a loser because it might be that there is more complications and certain buyers may not be able to purchase where they could purchase now under the current system.
Are there winners and losers within the real estate industry? Absolutely. So, there are some real estate companies that have been caught unawares and real estate agents that have been caught without being prepared and then they will lose market share. There are companies that have been well prepared and like an athlete at the starting blocks, ready for the gun to go off. They're ready to serve clients very well and that's frankly where Rob Brooks Realty has been. We saw this coming eight months ago and we've been preparing for this moment.
So, this is not going to be a major change in the way that Rob Brooks Realty serves our customers, from the customer's point of view. So if you have further questions on this, don't hesitate to give me or any agent of Rob Brooks Realty a call. We'll be happy to assist. I'm Rob of Rob Brooks Realty.