Could America’s real estate industry be in trouble? Jason Oppenheim, star broker of Netflix’s hit series “Selling Sunset,” thinks that it is.
Sitting down with Yahoo Finance, Oppenheim expressed specific concern for the real estate industry’s commission structure which is subject to undergo some significant changes.
"To be specific about real estate agents, we've got federal regulators and a couple of lawsuits coming down the pipeline that, at worst case, could be an armageddon for real estate agents," he said. "You might see regulators uncouple the commission structure where the seller is now essentially paying for the buyers' and agents' commission."
One lawsuit, Sitzer et al. v. National Association of Realtors (NAR), alleges that the NAR has been operating under several rules that violate the Sherman Antitrust Act. Introduced way back in 1890, such an act disallows any activities that prevent interstate business dealings.
The lawsuit specifically criticizes the NAR rule which requires listing brokers to offer buyer brokers a commission to list a property. According to the home sellers who filed the case, such a practice restricts competition because it inflates sellers’ costs.
Typically, in a property sale, there are two agents involved: a buyer’s agent and a seller’s agent. Should NAR lose in court, the buyers’ agents would be removed from the process, thus putting thousands of real estate agents in the U.S. in peril.
"I think there are too many real estate agents anyway, so I don't think that's part of the problem.” I think the problem is that if we remove the buyer's agent's commission, you'll see the listing agent representing the buyer in 90% of transactions,” said Oppenheim.
"I don't think that's healthy for the consumer, because I think that the buyer should have their own representation.”
The NAR is hoping to settle with regulators or even file an appeal, but there’s no guarantee either option will work in their favor. Oppenheim predicts things will really start to take a turn in 2024.
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