Weekly Radar #291: The $418 Million Settlement, It Pays To Sign, Sustainability Arms Race

Weekly Radar #291: The $418 Million Settlement, It Pays To Sign, Sustainability Arms Race
Image generator: DALL-E Prompt: the wild wild west is here, with real estate commissions

What's covered in this week's GEM Crystal Weekly Radar:

  • Drew covers this week's $418MM NAR settlement and what it means for brokerage entities.
  • How are buyers incentivized to participate in Redfin's new Sign & Save program? We cover the program details.

Geek Estate Blog Recap:

reapi’s 2024 Tech in Real Estate Hackathon Registration is Open
reapi, an integrated API system providing property data and machine learning to proptech companies, is hosting its 2024 Tech in Real Estate Hackathon. Participants will have the opportunity to showcase their work to a panel of industry leaders, network with peers and real estate experts,…
An Integrated Platform for Better Lead Data
[Note from editor: The “Mastermind Showcase” highlights companies and news from members of the GEM. Today’s showcase: Curb Hero] A digital Open House sign-in app and listing marketing tool for real estate agents and mortgage professionals, Curb Hero’s products capture client information through sign-ins through…
2024 REACH Commercial Applications Now Open
REACH operates a variety of accelerator programs around the globe, created and operated by Second Century Ventures and backed by NAR. The program offers education, mentorship and exposure for technology companies working to scale their businesses across the U.S. residential and commercial real estate markets…
Proptech Job Opportunity: Head of Business Development & Strategic Partnerships at EasyKnock
We have a job opportunity to share from a member of GEM Diamond, EasyKnock, an institutionalized sale-leaseback residential platform. Company Description EasyKnock is a equity solutions platform giving homeowners flexible, quick solutions for their financial needs. Whether paying off debt, purchasing a new home, or…

Transmission Recap:

Last week, Drew covered how innovation in lumber is underappreciated. Before that, Drew delved into the long and short of Zillbnb - what Zillow's announcement means for the future of short and long-term rentals.


By: Drew Meyers

Image generator: DALL-EPrompt: the wild wild west is here, with real estate commissions

NAR "has agreed to settle a series of [commission] lawsuits by paying $418 million in damages and by eliminating its rules on commissions," according to The New York Times. Two big parts of the settlement mandates that MLS eliminate "any fields displaying broker compensation" and "places a blanket ban on the longtime requirement that agents subscribe to multiple listing services in the first place in order to offer or accept compensation for their work." Plus, from the NAR press release, buyers will be required to "enter into written agreements" with MLS participants, "go[ing] into effect in mid-July 2024." (H/T ❇️Kevin Oakley❇️). The settlement covers all brokerage entities with sales volume of less than $2 billion, but it specifically excludes HomeServices of America by name. Wholly owned MLSs are safe, and those MLSs not entirely owned by Realtor associations can also be included in the settlement if they agree to modify their practices and contribute a per-subscriber fee to the settlement fund.

A few thoughts...

  • I have always thought of MLSs as compensation cooperation and compliance. With compensation off the table, their value proposition now appears to be compliance and legal protection. MLS insiders (I'm looking at your ❇️Greg RobertsonSam DeBordTimathy Dain❇️, etc), I'm all ears for a bull case for MLSs to maintain relevance and thrive without the ability to directly handle compensation.
  • $418 million over four years is cheap. Very cheap.
  • Every brokerage in the country now has no choice but to be members of NAR, unless they want to fight commission lawsuits on their own...which they will obviously not sign up for.
  • Tour volume will go way down. Open house activity will go way up.
  • The big technology winners are no doubt the offers platforms (Final OfferOpennOffer1DecentRE Property Exchange (DPX)Homwel, and others), validating one of my 2024 predictions. Since commissions cannot be discussed/negotiated/shared on the MLS, it's inevitable they will move to another platform...unless we move back to a world where email, phone, and pen/paper are the tools to negotiate. If a broad coalition of MLSs chose to invest in one of these platforms as well as do deep integrations, a winner would be minted almost overnight.
  • Going back to ❇️Greg Fischer❇️'s article, Burning the Agent Effigy Once and For All...and it's still true. There are a lot more expensive line items than the commission that need to be addressed in order to seriously reduce home prices for buyers. Going from 6% down to 3% (as a hypothetical) is still not going to enable first time buyers who can't afford a house today attain homeownership.
  • You know what's coming? The "Zestimate" for commissions. Or, perhaps a broader Closing Costs Zestimate that also factors in estimated commissions.

❇️Robert Hahn and Greg Robertson❇️ discussed the news on a live-stream version of Industry Relations for those interested in hearing more analysis/opinions: