The commission workaround DOJ might not be able to stop
The first amendment rights of sellers are not restricted by the NAR settlement
Last week blowhard real estate YouTuber Ricky Carruth falsely claimed “the new rules being forced on real estate agents on August 17th are unconstitutional though their blockage of home sellers freedom of speech by preventing them from communicating about offering a buyers agent commission even if they wish.”
Well, actually Ricky, no. What the new rules prevent is the list agency from offering cooperating commission to an agency representing a buyer on the MLS.
No impact to the “home sellers freedom of speech.”
In fact, the seller’s first amendment rights are well protected and the seller retains the right and ability to offer compensation to an agency representing a buyer.
Remember I’m not a lawyer, too smart to go to law school and plus I like to actually accomplish things.
The opportunity is so large several companies have launched to provide non-MLS information including: Nesthook, ListingSplit, and Gitcha.
As pure satire, I launched CommissionPost.com driven by a ridiculously simple google form and spreadsheet, if only to demonstrate the enormity of the NAR settlement loophole.
Full disclosure: Aside from the satirical CommissionPost.com, I have no relationship, sponsorship, investment or interest of any kind in the companies mentioned in this article.
The Department of Justice and NAR are significantly concerned that these “work arounds” might defeat the reform efforts (lower buyer side fees) intended by the NAR settlement of the Sitzer case.
NAR President Kevin Sears was quoted by Inman on July 2: “To be clear, NAR — and I personally — oppose any attempts to circumvent the settlement,” Sears wrote. “The practice changes should be implemented fully and in good faith, in the service of promoting consumer empowerment, consumer choice, and healthy competition.”
Those practice changes apply to NAR members only and do not apply to individual sellers.
If a “work around” powered solely by sellers shared effectively the same commission information the industry has become accustomed to, that “solution” would be beyond the purview of the Association, the Sitzer settlement and most likely the DOJ as it would be protected by the First Amendment.
It would also have the net effect of maintaining inflated buyer side commissions.
Nesthook as currently configured, is agent centric and would immediately run afoul of Sears and the DOJ. Gitcha is a marketplace according to its website to “browse or post in a live feed where buyers and renters publicize exactly what they’re looking for” but also includes an agent component. Founder Dan Cooper admitted to Inman that the settlement was “serendipitous” to his business.
Only, ListingSplit is seller centric and as such has the potential to “circumvent the settlement” According to the website: “We've created systems that work in harmony within the newly established guidelines of the NAR. ListingSplit.com is real estate’s leading site for sellers to incentivize buyers.”
Get it? “Sellers to incentivize buyers” It should actually say to incentivize “buyer agents.” Somewhat problematically, ListingSplit.com will allow the the seller to add the list agent to their account and then the listing agent can add the incentive on their behalf and have the “seller approve the incentive before it goes live.”
“This provides you with one degree of separation while adding an extra layer of protection.” Will the DOJ see it that way?
In any case, if a purely decentralized seller centric solution were to gain widespread acceptance, it is hard to envision how the DOJ would apply anti-trust law to such an approach.
This is why I can no longer be a RRRREALTORRRRRR or coached by their blessed coaches. Look, they are putting brokers out there doing illegal stuff that is "ethical" in their mind and the brokers and brokerages are being sued. That is why this entire thing became a mushroom cloud.
If they wanted it to be fair, even with good intentions, they would have went with the fair market approach rather than the pumped up commissions sellers hatefest of taking their equity for a cash cow. But, that is who they ARRRRRRRRR.
Way too many people out there who are making these claims and is just stupid as Tom Ferry having that bozo on his show with his bleeping.
The Association, MLS', the Brokerages, and "Coaches" that keep drumming illegal activities like cold calling DNC lists, and fining Brokers for not putting in the color of the shutters in the MLS plus the long list of "Ethics" that normalized criminal activity is the reason I hit the road