The following Q&A is from HW + ‘s exclusive Slack channel, where HousingWire Senior Real Estate Reporter Matthew Blake answered questions about his latest coverage on the impact of the DOJ decision and how the industry is preparing to respond. During the question-and-answer session, Blake discussed the ramifications of the GM’s previous investigations into NAR and the conversations he has had with high-level agents about how they feel about this news.
The following questions and answers have been slightly edited for length and clarity.
Housing wire: To begin with, the Department of Justice affording to pursue a broader investigation into the NAR is a brewing high-level conflict. How, if at all, does it practically affect the agents?
Matthew Blake: It is not an obscure legal question. The DOJ has repeatedly said in withdrawing from its consent decree with the real estate agent’s trade group that it is considering commissions. Many academics and antitrust lawyers, but not many agents, claim that America’s real estate commissions are artificially inflated by an illegal horizontal conspiracy between NAR and the brokerage houses. So if the Department of Justice were to believe that, it would look for ways to lower commissions for consumers.
In other words, it could affect the business model we know for agents, which is that they are independent contractors who make a living on commissions of up to 3% each of the total purchase price of agents. ‘a house.
Housing wire: Interesting insight. To take advantage of this, would you consider NAR to be a monopoly?
Matthew Blake: I’m not a lawyer, so I don’t know, but the secular understanding of monopoly is domain domination, and NAR is certainly the dominant business group for agents. But more than just representing work, they also represent management (brokerage) and claim to work in the best interests of consumers. Thus, they have a disproportionate role in the US real estate market and, I would say, unique among trade groups. The question, however, for antitrust purposes is whether it is a monopoly harming consumers and this is where you get into arguments full blown.