Total NAR.

It’s OK. We’ve all seen the headlines. We know that thanks to a fistful of class action lawsuits against the National Association of Realtors (NAR) it’s going to be cheaper to buy and sell real estate in the Brave New World. As a 20+ year member of the NAR, however, I’m a little disappointed that the largest trade organization in the US wasn’t able to put down these suits without wrecking my flow. But I’m not a defendant and you’re probably not a plaintiff—so no big whoop...

At its essence, Friday’s $418M settlement is about transparency in compensation. But there’s a lot of space between price fixing and simply employing a system that has worked to the mutual benefit of both buyers and sellers for almost 30 years. And one of the unintended consequences of this legal pantsing will be a back-to-the-future stripping of protections for buyers moving forward.

Prior to 1996, real estate brokers—almost always men—represented only sellers and composed 3-page contracts with golf pencils on the hoods of luxury sedans. They’d write buyers' names in the blanks and give them the phone number of the title company. But they weren’t helping them schedule or navigate a home inspection. They weren’t working closely with lenders to make sure the best financing terms were applied. They weren’t steeping in the comps to make sure buyers understood the true value (not merely price) of a home. They weren’t representing them. This era is fondly recalled by the old guard as ‘buyer beware.’

With the rise in popularity of buyer agency in the early part of this century, buyers realized all the afore-mentioned benefits and more-- thanks to brokers who were representing their interests exclusively. And I just don’t see how we haven’t litigated ourselves back to the stone age with this settlement.

There is much still to be clarified between now and July. But what’s super clear right now is that it will no longer be legal for a seller to advertise a buyer’s agent’s commission. Seller may indeed still be willing to pay one-- but how that information is conveyed to a buyer via their representation is still a tall mystery. If the Missouri jury who decided this case thought there was selective exposure to listings because some offered 3% and others offered 2.5%, imagine how surprised we’ll all be by the difference in 2% and zero.

The NAR and individual brokerages have little choice than to apply as positive a spin as possible to this dizzying development. Think of all the opportunities for innovation! The adages are really flowing now. “Change is the only constant.” “If you can’t beat em, join em.” And of course, “Wish in one hand and shit in the other and see which one fills up first.”

Rather than learn all the new handshakes, a lot of older agents will simply run out the clock on their licenses and retire. Likewise, a lot of newer agents-- who historically work almost exclusively with buyers-- will surely do a career re-select. I like to think of myself as middle-aged despite what my abacus says. My plan is to not only hang around but in fact dig in. I for one welcome our new Overlords!

But it’s going to be different. The retail travel industry was pretty much choked out in the early days of the internet. So far, despite some peripheral degradation, the real estate industry has withstood similar sacking. But the same faceless internet-only remote contract generation firms will certainly emerge to provide clerical assistance to buyers in this new landscape, the same way the flat-fee MLS brokerages have for FSbOs on the selling side. Probably aided in some sinister way by a eye. It’s just another step in the pajamafication of our once-proud culture.

I’m happy to get together to talk more about this if anyone is still reading or even remotely interested. If you’re thinking about making a real estate move, or if your parents or grown children are, or your friends. Even your enemies. I don’t much care.

Call me!