On The Market

135: New Agent Lawsuits Could Have Profound Effects for Buying and Selling Homes w/James Rodriguez

Aug 28, 2023

James Rodriguez, Senior Real Estate Reporter at Business Insider, discusses the potential implications of new lawsuits against the National Association of REALTORS (NAR) that could lead to changes in how agents are paid. The lawsuits could result in a decoupling of commissions, affecting both buyers and sellers. The episode explores the value of using an agent and the potential threats to real estate agents.

48:17

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Episode guests

James Rodriguez

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Quick takeaways

Two major lawsuits are challenging the way real estate agents are compensated, arguing for decoupling commissions for more transparency and negotiation.

The potential change in how buyer's agents are paid could lead to fewer buyers using agents or seeking alternative payment structures, but the existing industry structure and lobbying power of the NAR may maintain the status quo.

Deep dives

The Lawsuits Challenging Real Estate Agent Commissions

Two major lawsuits, Sitzer v. NIR and Murl v. NIR, are challenging the way real estate agents are compensated. The lawsuits argue that the cooperative compensation rule enforced by the Multiple Listing Service (MLS) forces sellers to pay unfairly high commissions to buyer's agents. They contend that decoupling the commissions would create more transparency and incentivize negotiation. If successful, the lawsuits could lead to changes in how agents are paid, potentially impacting the number of buyer's agents and the overall commissions in the industry.

Introduction

2min

Challenging the Commission Structure in Real Estate: Lawsuits and Potential Implications

2min

Understanding Real Estate Commissions and Potential Implications

2min

Fundrise's Private Credit: A Solution to Bridge Financing Challenges

5min

Understanding Real Estate Commissions and Potential Lawsuits

17min

The Potential Effects of New Agent Laws on Home Buyers

10min

The Impact of New Agent Lawsuits

11min

Hope for Standardization and Bootcamp Invitation

3min

New real estate commission lawsuits could change home buying and selling as we know it. Long gone may be the days of buyers walking away paying zero commission and sellers having to bear the entire burden of a real estate transaction. Two new class action lawsuits against the National Association of REALTORS (NAR) could change how agents are paid and deals are done, but should investors even care?

We brought in James Rodriguez, Senior Real Estate Reporter at Business Insider, to explain exactly what could happen to commissions, what this means for the future of buying and selling real estate, and whether or not the next agent extinction is on our hands. With over $40 billion in damages from these combined lawsuits, real estate agents may wake up to an entirely new housing market where their services are rarely needed.

But who’s forging this fight against real estate agents, and why are they pushing for a “decoupling” of commissions? And, if you’re a full-time agent, should you be concerned about where your next paycheck could come from, or is this merely a hollow case with no REAL threat to hard-working agents and realtors? Stick around; we’ll get into who should (and shouldn’t) be worried.

In This Episode We Cover:

The multi-billion dollar NAR lawsuits explained and why commissions could be “decoupled”

A BIG threat to buyer’s agents and what happens when their services are no longer needed

Whether or not using an agent is worth it, and why most investors will STILL rely on realtors and agents

The potential of an MLS (multiple listing service) overhaul and combining all local listings into one

Paying agents per hour and the future of real estate commissions

And So Much More!

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