PART FOUR: This is part 4 of a 5 part series of opinion pieces about todays real estate market with a focus on the Hamptons...A microcosm of the macrocosim!
YOU WANT THE TRUTH???..."YOU CAN'T HANDLE THE TRUTH!!!
The real estate market in general needs a panacea! All parts of the country are facing a shift in the way this profession has evolved.
Although you may not always agree with my theories and opinions about what is happening and what is about to occur in the real estate business, you can't ignore the basic truth about this situation! We are in a historical shift in ethical standards and legal requirements!
This is briefly what happened to bring on the shift taking place right now
In the trials that took place in 2023 and into 2024, the National Association of Realtors (NAR) was accused of engaging in a price-fixing conspiracy—specifically, of colluding to inflate commissions paid to real estate agents, thereby compelling home sellers to bear higher costs for both listing and buyer’s agent fees.
NAR was accused—and ultimately found liable—of designing and enforcing rules that effectively forced sellers to pay inflated commissions, amounting to an anticompetitive scheme. The fallout included a staggering jury verdict and a sweeping settlement that led to a fundamental shift in how real estate commissions are structured in the U.S.
- To resolve the case, NAR agreed in March 2024 to a $418 million settlement, along with committing to significant policy changes—notably eliminating the rule that required sellers to pay buyer agents’ commissions through MLS listings, and introducing requirements like formal buyer-agent contracts before showings.
Buying a home will never be the same!
Life used to be so simple: You saw a listing, you called the agent, you bought the house. But, by way of the NAR rules that required certain information be included on MLS listings, we all became vulnerable to the well-recognized Anti-Trust Price Fixing claims. Don't forget, as part of belonging to NAR, we pay significant dues to the Association. As a paying member, we are part of the scheme. We had to play the game as was required by the NAR!
But, there is one thing I didn't mention: The Hamptons and New York City never played the MLS game. We had to pay our dues because the whole brokerage community was required to be part of the "CLUB" or nobody would be able to use the Multiple Listing Systems!
But, we did not use the MLS system! Both NYC and the Hamptons had too much on the line--too many differences from the mainstream listing systems. We had "RealNet" and HREO and then there were other privately owned listing platforms---until Zillow got involved!!
Yes--that's right! Zillow got involved by buying out the platforms that we were using here in the Hamptons, bringing in "Streeteasy" and "Outeast" to break into these two markets (NYC and the Hamptons) and it all came crashing down. To this day, the Outeast platform has been a complete failure in my humble opinion--it has never worked for agents. We are treated just like the public, without any market data or any other mapping tools that we were accustomed to with Real Net or HREO.
In other words, these 2 markets had too much to lose in terms of status or market value to appear on a local MLS. if everybody were pushing their way in to try to sell the most expensive real estate in America--NYC and the Hamptons have some of the most expensive real estate in the world-- then where do we come off claiming to be a true Luxury Market? And the homeowners were satisfied that their properties were presented the way they were.
And now we have the NAR fiasco. It has all come full circle for them. Whether it was intentional price-fixing or not, makes no difference. The hubris of NAR to do what they did for years without any consequences until now is nothing short of astounding!
This truth will rule our profession from now on.
What is the real truth about the way the real estate market came to demand buyer representation? Was it because the buyer demanded it? Was it because there was a missing piece in what buyers were getting in their treatment by the brokerage community? Surely, there were complaints by the homeowner/sellers that had to do with who pays commission? Not that I was ware of...And I never heard a buyer say: "Do I pay commission or does the seller pay when I buy his/her house?" Most states were set up for Seller representation and since the beginning, it has always been that way--but then Dual Agents became the target of questions of fudiucary responsibility and states, including New York State had a very hard time explaining Dual Agency and the conflict it invokes.
The accumulation of actions taken by the real estate community, including it's representative associations are a stark reminder of how we must be on our toes at all times.
REMINDER: Never, ever think there is an exception to the rules, the BIG (FEDERAL) rules!
WAS THERE A REVOLUTION IN REAL ESTATE BROKERAGE? ..Did I miss something?
No, but there was unrest out there, quietly taking a course of legal action that made the real estate market go spinning out over these past 2-3 years. It surfaced that the discomfort on the part of a few sellers, unhappy with the way commissions are paid, became a hill to die on.
And it was a very high hill that included questions about the integrity and intentions of the National Association of Realtors. It also called into question the way the brokerages work with buyers and the way we get paid for our work! 
For the first time in it's history, NAR had to prove itself to the general public and the brokerage community. Did they do it? What was acomplished that will forever change the nature of brokerage? Lots!
I didn't sit through the trials; I didn't realIy follow the trials that closely. I see that the charges were Price Fixing--an anti-trust claim that was proven by the courts and that required NAR to have to pay huge fines for their miss-behavior.
Knowing that, I now view the real estate business as a very different entity. And there is irony in that, because many people believe that we as agents make too much money--that we are all rich. That is a total falsehood that hopefully will fall away now. I have been fortunate enough to have worked in the corporate world, in retailing specifically, and I can tell you that I have never made as much money in real estate as I did with the steady salary I recieved in the Corprate world.
As self employed Independent contractors, real estate agents pay an enormous self employment tax--at least they do here in New York. Because of the way we are treated in this profession, I don't know how many more years I can spend doing this kind of work. It "pays" very little in the way of respect--always has! And now, not knowing how things will unfold, it may be the time to chill out!
IT WAS A QUIET REVOLUTION AND IT CHANGED A LOT ABOUT REAL ESTATE BROKERAGE... As we know it, at least here in New york.
And now, the buying public is forced to sign on the dotted line in order to physically see properties and in some cases, buyers are now responsible for paying some part of the commisssion! Yes, you can still just call a listing agent to see a house, but there will be pressure to sign a buyer exclusive so that the agent can properly represent you...and get paid!
State to State we are seeing changes in the way we deal with buyers (New federal law changes the relationship between a buyer and their agent from one of "customer" to "Client" as a result of NAR lawsuits) and the need for Federal oversight of this sort makes it even more essential that we stay informed, educated as to how to handle this new form of Buyer Brokerage.
I am learning more and more every day!...and that's the TRUTH!
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