The DOJ and National Association of REALTORS® Lawsuit & Settlement EXPLAINED
Air Date: November 25th, 2020
If you want the scoop on the Department of Justice lawsuit and settlement with the National Association of REALTORS®—and how it affects YOU—let me fill you in. The DOJ’s concern is that consumers are unclear about commission structures and how agents get paid, so it’s about to become publicly available information. Professional REALTORS® are already transparent about these things, so we’re happy to provide consumers more options and better transparency. Listen in as I share a big change in the settlement that will require a new critical step in your process when it comes to lockboxes and seller safety —and hear what you can do as a REALTOR® to share your value, spread the word, and support your clients.
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Time Stamped Show Notes:
- 00:25 - Leigh is the Vice President of Advocacy for the Association and is connected to Katies Johnson, the Chief Counsel of the NAR
- 00:50 - The DOJ (Department of Justice) & NAR Lawsuit and Settlement
- 01:45 - The DOJ said that people don’t know what’s going on in terms of commissions and buyers don’t know how agents are paid
- 02:05 - Your state may have different agency rules for buyer and sellers agents, some states even have transaction agents
- 03:00 - The settlement says that commission payments need to be evident; NAR doesn’t acknowledge wrongdoing but agreed to publish compensation
- 03:35 - If you are a REALTOR® and you have compensated another agent in the MLS, it’s going to publish all over the place on websites
- 03:50 - The MLS is an agreement to data and listing share amongst professional colleagues
- 04:20 - If one REALTOR® works with a seller, they can publish the listing into the MLS for buyers agents with information on how they’d be paid, too
- 04:30 - That amount was determined between the seller’s agent and the seller prior to publishing on the MLS; this is so agents can work together
- 05:00 - This compensation number used to be published publicly, then it wasn’t, and now it will be again; it’s no big secret
- 05:30 - Part of the conversation
- 05:35 - That it will cause negotiations of commission rates - this has always happened
- 05:50 - Agents won’t be able to choose houses based on commission dollars - we’re in a low-inventory market so you shouldn’t be doing this anyway
- 06:20 - The consumer will be able to see the full breadth of what’s available within their budget - that’s how it should be
- 06:30 - The giant change in the settlement
- 06:30 - You’ll have to have a conversation with your seller clients
- 06:35 - In the MLS, when you agree to work together, you work through showing instructions and services for convenience and safety
- 06:55 - The DOJ settlement says that any real estate licensee can access a lockbox, REALTOR®, member of the association, or MLS with seller permission
- 07:15 - Have a conversation with sellers about how it works; find out if they’re comfortable having licensees in their house and be sure to check licenses
- 07:45 - This may just mean that you have to make an extra phone call; the priority is seller safety so make sure their license is valid
- 08:25 - We need to have better conversations with the public about what we do as REALTORS®
- 08:35 - REALTORS® tend to keep all the work they do behind-the-scenes, so the public doesn’t know all they do and all the hours it takes
- 09:00 - Let people know how hard you work; look at your advertising and let consumer sellers know what a professional REALTOR® means to them
- 10:20 - The best REALTORS® do things that websites and AI and AR just can’t do; they troubleshoot, find solutions, and make the transaction smooth
- 10:53 - If you have opinions, concerns or questions as a REALTOR® member, contact the members of the NAR Board of Directors in your state/region
- 11:11 - The NAR Board of Directors (your voice in the room) will need to have a meeting to discuss how they’re going to approach and vote on this
- 12:00 - While we work through the process
- 12:10 - Do what you were doing; make sure every consumer is educated, they know what you do, and know the journey from consumer to client
- 12:40 - Spread the word; fill other agents in on the conversation and encourage them to engage
3 Key Points
1.) Safety is the #1 priority.
2.) Communicate all that you do as a REALTOR®.
3.) Real estate is the cornerstone of the American Dream.