In the News

The rate of homeownership in the Black community hovers around 45%, a stark contrast to nearly 75% for White households. There are lawsuits, including a current federal case, that could make this gulf even greater. Strong, dynamic local real estate marketplaces are a cornerstone of community development and economic growth. Local broker marketplaces – in which real estate agents share all listings openly and transparently with all other agents – help foster healthy competition.

Meanwhile, compensation rules that allow a home buyer’s real estate agent to be paid out of the proceeds from the home sale – instead of out of the buyer’s pocket upfront – help expand access to homeownership and increase the pool of buyers for sellers’ homes.

However, the pending lawsuits could upend these vital local marketplaces. The suits seek to require buyers to pay for the services of their real estate agent directly, rather than having the buyer’s agent fee paid by the seller’s agent at the time of closing. If successful, such a verdict would significantly increase the transaction costs of buying a home – with major repercussions for local economies…

FULL TEXT: Implications of Local Lawsuit Could Exacerbate Racial Homeownership Gap - Chicago Defender

…Some say the MLS enables U.S. real estate agents to have higher commission rates than in other countries. There is some truth to this position. What it leaves out is the value that MLSs bring to the participants in the market, both real estate professionals and consumers. Those who point to this conclusion fail to mention the role the MLS plays in the U.S. (and Canadian market) in assuring a high level of accuracy in data about the homes that are for sale, the sales prices of homes that are sold, and the comparable data for price comparisons. Among other benefits are regulations and processes to make the market efficient and fair that are promulgated and enforced by the MLS.

Take the MLS out of the picture and you have the portals, none of which are geared to police the accuracy of the data provided by sellers. None of which are geared to police agent conduct in the market. Without the MLS, real estate professionals and consumers would be at the mercy of three to four large, national portals whose business models aren’t geared to do any of the messy oversight of the market — nor would they want the liability to do so…

FULL TEXT: Opinion: All the ways the class-action commission lawsuits are misguided—Housing Wire

Ending the practice of the seller paying the buyer's real estate broker commission would result in harm to consumers already facing affordability challenges, commentators on the financing side of the transaction said.

"It's the type of thing that is going to have a lot of unintended consequences that are going to be difficult to predict from the outset," said Brendan McKay, the president for advocacy at the Association of Independent Mortgage Experts…

…It will result in a lot more buyers not getting the services that a Realtor would provide to help them with the transaction, she said. And for buyers, the costs are likely to rise because of the items involved in the transaction that are no longer covered by the seller.

FULL TEXT: Unintended consequences abound with real estate commission change—National Mortgage News

Having seen how markets work both with the local broker marketplace model and without, I can tell you that local broker marketplaces are much more beneficial for consumers, agents and the economy at large. My experience has proven to me that local broker marketplaces promote equitable access to homeownership for consumers and for real estate businesses of all sizes by ensuring that all available homes for sale are obtainable by everyone…Ninety-eight percent of homes in Romania are For Sale by Owner, meaning two parties are making one of the biggest financial transactions of their lives without any experience or professional representation. While consumers in Romania often think they’re saving money on commissions by going at it alone, the reality is both buyers and sellers are losing money.

FULL TEXT: Local Broker Marketplaces: Insights from a Romanian REALTOR®--Inman

 …For the real estate industry, the open marketplace provided by the MLS helps make home happen for MILLIONS of Americans every single year—many of whom would not be able to participate in the housing market without the MLS. This is because MLSs operate local listing marketplaces that gather property information—on an impartial basis—from all brokers and then disseminate that information—on an impartial basis—to every other area broker.

This point is critically important.

Without the MLS, information about properties available for sale and rent would be fragmented, and available primarily based on who you are and who you know…

FULL TEXT: Opinion: The Real Value of MLS: Fair and Equitable Access to Housing for All--RISMedia

… The majority of homes in the U.S. are listed on local broker marketplaces, which offer the widest pool of buyers for sellers and a comprehensive database of available properties for buyers. Alternatively, in Israel, we don’t have centralized databases, and listings are often shared between brokers via WhatsApp groups, which opens the door to various issues regarding transparency, accuracy, reliability and access…

…Local broker marketplaces in the U.S. make the buying and selling processes more efficient due to the centralized nature of listings, which helps result in quicker closing times. There isn’t as much information available in Israel, meaning consumers have to spend extra time searching far and wide to find the right property.

In the U.S., this is all cut out by having a local broker marketplace that has all the available listings and data in one convenient place…

… As someone who has studied the U.S. model and found it preferable to ours, I can confidently say Americans should not take this for granted. Imagine consumers getting possibly fake home information. Imagine consumers not knowing if home information is current.

Imagine consumers getting a fraction of the details they’re looking for about a home they want to purchase. This could be your new reality. Appreciate and defend what you have because you don’t realize how good you have it.

FULL TEXT:  Opinion: Is Israel adopting the U.S. real estate model?—Real Trends

...the allegations leveled against the National Association of REALTORS® (NAR) and the multiple issues raised about the U.S. real estate industry’s structure can be seen in a different light when we consider the evidence and context provided in this discussion.

Notably, attempts to compare U.S. real estate practices with those of foreign markets, such as the claims presented in The Danger Report, fall short when considering the unique dynamics and complexities of the U.S. market. The U.S. real estate industry is more technologically advanced and has a more diversified agent base. Comparisons to foreign markets that fail to acknowledge these differences are overly simplistic and potentially misleading.

Significant proof of the pro-consumer nature of the Multiple Listing Service (MLS) systems can be seen in the staggering number of monthly visitors to affiliated websites. With an estimated 400 million unique monthly visitors, it is clear that millions of consumers rely on these platforms and the REALTORS® linked to them for property information and guidance on market trends. This considerable engagement contradicts the narrative that the current commission structure lacks consumer benefit…

…Furthermore, the deliberate misinformation to consumers by the coalition of discount brokerages, which spurred legal and regulatory responses, raises serious doubts about their integrity and authenticity. The Consumer Federation of America (CFA), given its financial gains from cy pres awards, puts its objectivity into question. The vested financial interests of the CFA seriously impinge on the credibility of its pronouncements and research findings…

FULL TEXT: In defense of REALTORS®: The Phillips Report spotlights industry realities—The American Genius

…Under current rules of a VA Home Loan, the veteran home buyer may not pay any commissions to a real estate agent. Ironic that the federal regulations for this loan contradict the federal lawsuit, but that is beside the point.

If a veteran buyer can’t pay their agent and a seller can’t pay the agent, what real estate agent will work for free? This lawsuit will negate the amazing benefit our service members have earned in their ability to buy homes…

FULL TEXT: Real estate industry contends with class action antitrust case—The News Enterprise

Without the compensation approach as it is between the selling and buying broker, local broker marketplaces wouldn’t flourish and there wouldn’t be a level playing field for small businesses to have access to the same information as larger brokerages. Instead, the only thing changing how real estate compensation works would do is increase the cost burden for American homebuyers. Especially first-time homebuyers.

FULL TEXT: Op-ed by Former HUD Deputy Secretary: Changing How Compensation Works for Real Estate Agents Would Hurt First-Time Buyers – RIS Media

Between 2019 and 2022, 83.4% of all home sales transactions took place on-MLS and sold for an average of 13.0% more than comparable homes sold off-MLS, amounting to an additional $45,741 to the seller for the typical home sold on the MLS over that period.

In 2021, on-MLS homes sold for an average of 14.8% more than off-MLS properties, a $55,779 premium.

As the market cools, the advantage of the open marketplace continues to increase with on-MLS properties selling for 19.7% more, on average, than off-MLS properties during the first quarter of 2022.

FULL TEXT: Bright’s 2022 On MLS Study — Bright MLS

It appears that plaintiff and plaintiffs counsel’s goal is to force buyers to pay buyer agents directly (out of pocket) versus the buyer absorbing fees into a mortgage…

…Suppose buyers must pay their agent directly out of pocket up front versus absorbing fees into a mortgage. This eliminates the VA Loan program and drastically increases fees for consumers seeking FHA loans, comprising ~20% of loan originations.

The impact will disproportionately harm low-income buyers…

…the collateral damage from this case could cause this event. The real estate market could crash, harming the same sellers seeking relief.

FULL TEXT: Real Estate Agents Brace for the Potential Demise of FHA & VA Loans

In one sense, technology has made real estate more accessible for both buyers and sellers. And yet, while everyone can see detailed property records on their phones or computer within seconds, not everyone can be a negotiator, price setter or resource. Home buyers and sellers can have difficulty navigating the expanse of information available, leaving many unsure how best to use this data to their respective advantage…

… Bringing in an expert with a deep knowledge of the home buying process and marketplace is the most effective way for a homebuyer to ensure, for example, they can win a bidding war without overpaying for a home….

Technology today has provided consumers with access to more information than ever before, and for real estate agents, access to technology products and services enable a higher level of customer service. And in the process, consumers get the best of both worlds: Technology at their fingertips to get them started and real estate agents making sense of all that information and other technology to help people make the right choice about where to start a family, raise their children and build lifelong community.

FULL TEXT: Growth of technology makes it even more important to use a REALTOR® – Houston Chronicle

First-time buyer tax credit

…The proposed first-time buyer tax credit of up to $15,000 is both advanceable and refundable, which means that home buyers would receive the tax credit when they make the purchase rather than when they file their federal income taxes the following year.

The biggest challenge for many would-be home buyers is saving for a down payment and closing costs, said Bryan Greene, vice president of policy advocacy for the National Association of REALTORS®.

“Once they get past this hurdle, paying the mortgage often costs about the same or less as paying rent,” Greene said. “Steep student loan payments, sky-high child-care costs and other factors, however, have made it increasingly difficult for most to accumulate the savings needed to cover initial closing costs.”

FULL TEXT: Biden administration brings a new focus on housing policies - The Washington Post

The editorial “REALTORS® must embrace fair rules of competition, lest their hands get forced” is replete with inaccuracies and mischaracterizations about local broker organizations, REALTORS® and the American real estate industry. In fact, local broker organizations ensure equity, superior customer service and greater options for buyers and sellers. REALTORS® are working Americans championing homeownership and property rights for the communities they serve. And the National Association of REALTORS®, or NAR, backs both up by regularly reviewing guidelines to maintain practices that increase transparency and improve the consumer experience.

In the latest example of advancing positive change, an NAR committee recently passed motions that more explicitly state the spirit and intent of NAR’s code of ethics and multiple listing service (MLS) guidelines in some key areas. The guidelines reinforce greater transparency and disclosure of compensation offered to buyer agents, they ensure that listings aren’t excluded from search results based on the amount of compensation offered to buyer agents and they reinforce that local MLS market participants do not represent brokerage services as free.

FULL TEXT: Real estate practices and REALTORS® in the US put consumers first - Chicago Tribune

Those attempting to attack the real estate agent commission structure are cloaking their true intentions in misleading claims of consumerism. These class action attorneys and those illegitimately trying to position themselves in the real estate market are looking for a payout if they can confuse enough people with misinformation and glaring omissions.

The reality is that the commission structure gives everyday Americans and small businesses critical advantages they otherwise wouldn’t get. Here’s what these self-serving parties are attacking.

They’re attacking a structure that makes it possible for more people to realize the American dream of homeownership.

The traditional commission structure where the listing broker offers to share his or her commission with the buyer broker ensures greater equity and equality for first-time, low-income and many other homebuyers who otherwise couldn’t afford a home and professional representation.

FULL TEXT: How The Agent Commission Structure Benefits Everyday Americans - Inman

As more than 31 million small businesses across the country were recognized during National Small Business Week, it’s a good time to look at how small, local operations drive so much of the economy and search for ways to continue to level the playing field for them and for consumers. When it comes to “buying local,” small businesses could not be more front and center than when it comes to purchasing a home. In fact, of the 1.5 million REALTORS® across the country, more than 1.3 million are small businesses like me who are focused on our local communities.

Of course, the local economic impact of housing is about more than just real estate agents. Preparing a home for the market often involves photographers, cleaners, landscapers, decorators and more, many of whom are small business owners themselves. Taken in total, small business has a significant impact on real estate—in fact, every home sale generates roughly $88,000 in local economic activity, and every two home sales supports one American job. Overall, real estate accounts for nearly 18% of the nation’s GDP.

FULL TEXT: Small Businesses, Cooperation Bolster Real Estate Market by Maintaining Affordability, Equity - RISMedia

…I generally agree with Hanna that change is good, as he noted. It’s critical for the National Association of REALTORS® (NAR) to consider and reconsider how it supports transparency, competition and consumer choice in the real estate industry.

That’s precisely why NAR regularly reviews guidelines for local MLS broker organizations. A recent example of that is in September, NAR’s MLS Technology and Emerging Issues Advisory Board passed a series of motions that are designed to make sure multiple listing services best meet the needs of consumers, agents and brokers alike.

The changes would ensure local MLS market participants do not represent their services as free, do not restrict listings based on compensation being offered to a cooperating broker and disclose the listing agent offer of compensation to buyer’s agents. These motions also ensure participants are not filtering listings in any way by brokerage or agent.

FULL TEXT: 6 Reasons NAR's Commission Rules Work - Inman

...This push toward “decoupling commissions” is a movement built on assumptions that have been dispelled — once again — by a recent, nationwide study that demonstrates the harmful effects this proposed change would have on the residential real estate market, particularly first-time homebuyers and those from minority groups. “Be Careful What You Ask For: The Economic Impact of Changing the Structure of Real Estate Agent Fees,” was conducted by two former Freddie Mac executives and a former senior advisor at the Department of Housing and Urban Development.

Using straightforward economic modeling, the researchers concluded that requiring buyers to come up with the additional funds needed to compensate their broker at closing would make it significantly less likely that first-time and other aspiring buyers could afford a home.

FULL TEXT: Opinion: Changing real estate compensation harms fair housing – Housing Wire

Buyer’s agents play a crucial role in helping buyers navigate the complex real estate market and secure the best possible deal…

…Buyer’s agent fees are an essential consideration when engaging the services of a real estate professional to represent you in the home-buying process.

By paying a fee typically covered by the seller, you gain access to invaluable expertise, exclusive listings, negotiation skills, market analysis, transaction management, and potential cost savings.

Working with a buyer’s agent can ultimately streamline your home purchase and increase the likelihood of a successful and satisfying real estate experience.

FULL TEXT: What Are Buyer’s Agents Fees—Max Real Estate Exposure

…Real-estate agents wear many hats. Depending on the party they are representing—buyer or seller—and the state they’re operating in, an agent may negotiate, advise on pricing, draw up contracts, coordinate showings or all of the above.

The most valuable thing they have to offer, though? That’d be “knowledge,” says Philip Hordijk, founder of real-estate brokerage Leven Real Estate. “Knowledge of the market trends, knowledge of the active inventory, knowledge of the process and knowledge of getting a deal done.”

Nearly 9 out of every 10 buyers and sellers use a real-estate agent’s help, according to the National Association of Realtors. Here’s what you can expect an agent to do for you if hired…

FULL TEXT:  How to Find a Real Estate Agent—The Wall Street Journal

…While prevailing in the court of law is ultimately the goal for NAR and the franchisors named in both lawsuits, [Katie] Johnson stresses the importance of winning in the court of public opinion as the industry addresses the legal challenges ahead.

Agents and brokers have a part to play in that endeavor, especially when faced with inquiring minds of consumers who may start hearing more about the industry’s antitrust challenges.

According to Johnson, consumer curiosity about the lawsuits facing the industry presents an opportunity for agents to set the record straight about misinformation while also providing a stage for a deeper conversation about the transaction process…

FULL TEXT: As Commissions Lawsuits Heat Up, Set the Record Straight with Deeper Client Conversations--RISMedia

As members of the National Association of REALTORS® (NAR), REALTORS® are champions of homeownership, property rights and the communities they serve. And yet, in today’s world of technology, instant gratification and misinformation, local MLS broker marketplaces and real estate professionals can be taken for granted.

If you don’t educate your clients on the value you and local MLS broker marketplaces provide, consumers could miss out on the best possible experience they can have in navigating one of the most infrequent, complex and consequential transactions most will make in their entire lives.

So what can agents who are REALTORS® do?

First, articulate your value to ensure everyone, especially your clients, understands what you do. Be an advocate for local broker marketplaces and how the way commissions are paid create competitive, efficient markets for small businesses and ensure equity, transparency and market-driven pricing for home buyers and sellers. And, support the use of buyer broker agreements to increase transparency on compensation and educate clients through every step of the process…

FULL TEXT: Opinion: REALTORS®, it’s time to raise your voice for consumers—Real Trends

Just how crucial are these agents to a successful real estate transaction?

Well, a good agent is really pretty useful. It makes sense to work with one, especially if you’re buying a home: Agents have access to information you don’t, and it takes time and expertise to research properties, find the best ones for you and put in a strong offer. But sellers see many benefits, too, especially when figuring out the best asking price. Your home will still need to be staged, listed on the market and shown, too.

FULL TEXT: How do real estate agent commissions work? -- Bankrate

Pre-Listing Activities

• Research all comparable currently listed properties
• Research & verify legal description

Marketing The Listing

• Review comparable listings regularly to ensure property remains competitive
• Receive & review all Offer to Purchase contracts submitted by buyers' agents

The Offer and Contract

• Counsel seller on offers. Explain merits & weakness of each offer
• Negotiate all offers on seller's behalf, set time limit for loan approval & closing

Tracking the Loan Process

• Follow loan processing through to the underwriter
• Add lender & other vendors to your management program so agents, buyer & seller can track progress of sale

Home Inspection

• Coordinate buyer's professional home inspection with seller
• Explain seller's responsibilities & interpret any clauses in the contract

The Appraisal

• Provide comparable sales used in market pricing to Appraiser
• Assist seller in questioning appraisal report if it seems too low

FULL TEXT: 184 Things Your REALTOR® Does For You!—Kelly Baker Properties

Regardless of the market, buying a home is complicated. It involves expert negotiations and familiarity with contracts and extensive paperwork. A good Realtor will have a thorough understanding of the market. This includes providing a comprehensive report known as a comparative market analysis (CMA) to help you understand market trends and determine what price to offer. CMAs will also provide you with the important “need to know” facts such as how long the home has been on the market and whether the price has gone up or down. This information can be incredibly valuable when it comes to evaluating whether a home is a safe investment and worth the price you’ll pay for it in today’s market. In addition, there are often small problems with initial negotiations and paperwork that, if unnoticed, can put your entire transaction in jeopardy. Your Realtor or real estate agent will work with you closely to ensure nothing falls through the cracks.

FULL TEXT: First-Time Home Buyers: How Your REALTOR® Can Help You Win – The Mortgage Reports

As Congress advances the biggest housing investments in decades and the Biden administration focuses more attention on housing issues, one policy matter should top the agenda: closing the racial homeownership gap. This persistent disparity not only limits the opportunity for individuals and families to build wealth; it also deprives our nation the opportunity for more robust economic growth…. 

Our country is making great strides in defeating COVID-19, but the pandemic's long-term fallout will be devastating for minority homeownership if we do nothing to counteract it. The policy reforms discussed here represent proactive steps to reverse trends that will only worsen if matters are allowed to run their course. We must act now to mitigate past harms exacerbated by a pandemic and unlock the benefits of homeownership for more Americans.

FULL TEXT: Closing the Racial Homeownership Gap Must Be Part of Our Long-Term COVID Response | Opinion - Newsweek

In the wake of the coronavirus pandemic, REALTORS®, real estate agents and their respective firms have increased their philanthropic and volunteer efforts, according to a new report from the National Association of REALTORS® (NAR). The median annual value of REALTORS® associations’ donations to communities doubled from $5,000 in 2018 to $10,000 in 2020.

The Community Aid and Real Estate Report—the CARE Report—offers insight into the monetary and volunteer contributions of members, broker/owners and association executives and multiple listing service staff. This year’s CARE Report found that, compared to the most recent 2018 study, food and monetary donations remain high and volunteering has increased among REALTORS®, while REALTOR® associations held more fundraisers for their communities.

FULL TEXT: NAR Reports REALTOR® Association Donations to Communities Doubled, Volunteerism Increased During Pandemic - RISMedia

Much of life moved online during the pandemic. That became true for even the most tangible of goods—real estate.

Over the past 18 months, virtual walkthroughs and three-dimensional tours have replaced many in-person showings and open houses. Even closing paperwork has moved online, propelling the industry through the pandemic. 

This new environment has led some to ask whether the real-estate agent profession is becoming obsolete. Why should someone pay an agent when they can browse properties online or reach buyers directly through an app?

The reality, however, is that modern technology is making agents and brokers more essential, not less.

Before the pandemic, homebuyers and sellers were experimenting with a new, online model of real estate—instant buying, or “iBuying.”

FULL TEXT: Bob Goldberg: Real estate still needs that human touch - Barron's

Research shows 88% of those who start their home buying search online ultimately use a real estate agent as the process moves forward… Anyone can stake a “for sale by owner” sign in their yard, but it takes more than a quick online search to determine a competitive asking price for your home.

…Fact is, like millions of Americans, I own a small business. I’m a REALTOR®. Along with being licensed to do my job and guided by a professional code of ethics, I’m actively involved in my community.

FULL TEXT: Expertise when Buying, Selling Home Matters Even More in Internet Age - Medium