The NAR settled a lawsuit without acknowledging they or the membership had done anything wrong. The lawyers, real estate disruptors, and the buyers who brought the suit have done more to confuse the process than help anyone other than themselves. It’s not a win for buyers or sellers. The major news outlets continue to misinterpret what this settlement means.
I’m not an attorney and I’m not familiar with all the legal intricacies of the lawsuit, and all I’m offering here is, one person’s opinion and two excellent videos.
Many of the major media outlets are suggesting that commissions will drop because previously they were not negotiable and the standard in the industry was 6%. Not true. Commissions have always been negotiable in California. It’s in every listing agreement. Clear as day. Successful agents don’t negotiate their commissions unless there are unique circumstances, there are some but that’s not what this post is about.
The lawsuit opens up all kinds of opportunities for listing agents to become “Dual Agents.” A Dual Agency is where the agent represents both the buyer and seller. Dual Agency is legal but not that simple and sometimes leads to all kinds of issues, problems, and litigation. Simply, how can the listing agent represent the interests of two parties, buyer and seller, that have different objectives? Once either party feels their agent is not advocating their position in the negotiating process a transaction could be jeopardized.
You sign a listing agreement that says you are the seller’s agent and advocate and then a buyer comes along that wants you to make an offer to the seller thinking this will put them on an inside track with the listing agent and seller that will play to their advantage and sometimes that’s true, but not always, and hence there’s always the potential for problems with dual agencies.
Experienced agents seem more adept at navigating these kinds of challenges. Fortunately, there are disclosure documents regarding dual agencies and as long as they are in place, and the buyer and seller understand the disclosures, you should be fine.
All and all we wish you and yours the best with your real estate transactions. This story will continue to play out and hopefully, it will be for the betterment of the profession and truly beneficial to buyers and sellers. Time will tell.
What I found most entertaining about this video was how the interviewer had to school the broker as to the advantages of buyers using a Realtor.
NBC News reports: Consumer Advocates and some Realtors hail National Association of Realtors settlement: We’ve opened up the entire industry to competition. Maybe…or maybe we’ve opened the door for more attorneys to insert themselves into the process which curiously they have been trying for decades. Should you hire a Real Estate Agent or Lawyer to buy a house?
Barbara Corcoran’s take on the NAR Settlement
