DOJ to court: Ignore NAR's protests over probe ruling

The Department of Justice wants the National Association of Realtors' legal protests to end.

The sides are sparring over a federal appeals court decision in April which paves the way for feds to reopen a probe into NAR's business practices. The trade group last month asked judges to revisit their ruling, suggesting it could have far-reaching implications in allowing the government to renege on agreements. 

Attorneys for the DOJ's Antitrust Division fired back Monday, suggesting the panel's 2-1 decision does not violate the legal doctrines NAR invoked in its appeal. The case, unrelated to NAR's massive settlement with home sellers, focuses on a 2020 letter in which investigators said they would close their probe. 

The text in question from the letter states, "No inference should be drawn, however, from the Division's decision to close its investigation into these rules, policies or practices not addressed by the consent decree."

The case itself doesn't focus on NAR policy disputes or antitrust inquiries, but rather the negotiations between the sides leading up to the DOJ's 2020 letter. Feds have yet to publicly weigh in on the larger NAR settlement, but already voiced their concern around proposed commissions changes in a separate case.

Furthermore, during a May 21 hearing in Massachusetts regarding the Nosalek settlement, a DOJ attorney said in open court commission compensation offers should not be made anywhere, and certainly not on a multiple listing service.

In April, Judge Justin R. Walker in a dissenting opinion wrote the government could now lure a party into the false comfort of a settlement agreement, take what it could get and reopen the probe seconds later. 

"So if you ever find yourself negotiating with the Antitrust Division of the Department of Justice, let today's case be a lesson: Buyer Beware," he wrote. 

Judges Karen LeCraft Henderson and Florence Y. Pan wrote the DOJ's letter "contains no 'unmistakable term'" ceding its power to reopen the probe. The judges took no position on the hypothetical situation addressed by Walker. 

The U.S. Circuit Court of Appeals for the D.C. District has not responded to either party's filing. A statement from NAR spoke about the association's petition "in furtherance of NAR's commitment to championing the interests of our members and the home buying and selling public."

NAR meanwhile is awaiting final approval of its settlement with home sellers, scheduled for November. It's recommending to its members to install rules changes by Aug. 17, including banning offers of compensation from being listed on Multiple Listing Services. 

Eddie Blanco, a Realtor with Stratwell and chairman of the board-elect for the Miami Association of Realtors, said he's not worried about the DOJ's Circuit court fight with NAR. Instead, he's focused on what is supposed to happen on Aug. 17. His local association trained 5,000 agents on the changes soon after the March announcement. 

"We're going to go with that recommendation, even though it's ahead of the November 26 federal court determination," he said. 

Some mortgage experts have suggested the housing finance industry at-large isn't prepared for the changes to come, which could impact affordability and blur the lines between Realtors and loan officers. 

Blanco said he hasn't heard of many Realtors in his home state pursuing dual licensing, and emphasized that commissions have always been negotiable and not guaranteed. Rather, the biggest change is going to be consumers asking questions that "prepared" Realtors have always answered.

"Here's what I'm going to do for you, here's the value of what I'm bringing to the table," said Blanco, suggesting what brokers would tell clients. "Here's what you're going to pay for those services, and let's rock and roll."