The path ahead for the Realtor community took a new turn over the weekend after the Department of Justice issued a statement against NAR's proposed
In a statement of interest, the DOJ noted that a specific provision in the agreement could raise antitrust concerns.
"The new provision that requires buyers and brokers to make written agreements before home tours may harm buyers and limit how brokers compete for clients. It bears a close resemblance to prior restrictions among competitors that courts have found to violate the antitrust laws in other proceedings and could limit — rather than enhance — competition for buyers among buyer brokers," the statement said.
The DOJ suggested that the provision be eliminated or parties disclaim that the settlement would provide any type of antitrust immunity or defense. Alternatively, the courts could also clearly state the settlement would not be allowed in the future as an antitrust defense, DOJ said.
The
The department's statement puts greater attention on NAR developments following a series of unwanted headlines, including a recent New York Times investigation that featured critics questioning the salaries of the trade group's top executives, as well as former officers of the organization whose present involvement with NAR is unclear. The article also alleged exorbitant spending by its leaders during its conferences on items such as golf outings, wine and theater tickets, all paid for by the organization.
Coming on the heels of the highly publicized settlement, which itself followed a leadership shakeup in 2023 after a sexual misconduct scandal, the investigation might be considered the third leg of a "trifecta" that stands to further erode trust in the group among dues-paying members, according to Michael Borodinsky, a Bridgewater, New Jersey-based branch manager for Newrez.
"It creates further distance between an agent's desire to want to embrace NAR as an organization and maybe even a detachment that they just don't necessarily feel that NAR is fighting for them anymore," he said.
NAR's high dues and the membership requirement for agents seeking to post properties on multiple listing services — a rule some characterized as "monopolistic" — had already drawn the ire of people in the field. The fresh allegations of wasteful spending and the legal settlement in the case commonly
"I think they just stumbled and mumbled and fumbled on that whole settlement issue," Borodinsky said, noting it "basically iced out" a large share of Realtors and will leave certain markets to the largest real estate teams who can dominate.
But thus far, the settlement and other publicity has not significantly changed the quality of Realtor relationships with lenders, sources say. It may open a door for the latter, though, to examine various strategies to find leads that drive business, as they try to understand the changes at NAR and eventually adjust how they find home-buying clients.
"Their eyes are wide open at this point," said Audrey Boissonou, sales leader at Guarantee Mortgage in Northern California. She also cautioned that industry stakeholders should "get through the facts" of what they read. "They want to understand what is happening there."
A request for comment from the National Association of Realtors in light of the New York Times piece had not been received at time of this article's publication.
For loan officers, the changes that occurred in August as a result of the NAR settlement doesn't mean many of the fundamental processes they currently rely on will necessarily change in the immediate future, nor have they for a number of their Realtors partners in local markets.
"The strongest [Realtors] are business as usual — just a little bit different of a process," said Joe Bigelman, a branch manager and consultant for John Adams Mortgage in Michigan, about his interactions with Realtors since the Sitzer-Burnett settlement.
"Certainly, some are struggling with it because it's a real change to them," he added.
Both lenders and their Realtor partners are still focused on the same primary goal: to help people achieve homeownership
"Sellers understand that the best way to get a qualified borrower to the table is through having equal representation," Boissonou said.
While there may be a thinning out of Realtor ranks, Bigelman sees their industry's current troubles being less detrimental to the profession as others predict, likening some of the current upheaval to the subprime mortgage crisis early this century.
"All of those sweeping, groundbreaking changes. We changed a lot, and I actually think we're on stronger ground now," he said about the mortgage industry. "A lot of loan officers dropped out of the business, and the ones that were strong stayed in it."
Still, some mortgage professionals think the turbulence at NAR will end up changing the real estate agent profession in such a way that will force lenders to take a fresh approach to attracting new borrowers making home purchases.
"There are a lot of challenges going on with a mortgage lender in terms of knowing they have to go after or work directly with the listing agent in a way they've never had to before. It's everything from joint marketing to working the open houses and sponsoring them," Borodinsky said.
"It's a huge challenge now in terms of the race to get to the buyer before they almost start shopping on their own," he added.
