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Op-Ed: Misguided DOJ Efforts Could Derail What a Pro-Consumer Real Estate Market Bolsters

Home Industry News
Commentary by NAR President Charlie Oppler
July 19, 2021
Reading Time: 3 mins read
58

As a small business owner and president of the National Association of REALTORS® (NAR), I want to set the record straight on misconceptions by some about the real estate industry.

Commissions for real estate agents and brokers are negotiable. Always have been. Always will be. Let’s put that on the table right now.

Like most transactions in the American economy, market forces set individual commission rates to provide for competition among brokers, increase efficiency for consumers and ensure we are providing the most market-driven and best possible service to our clients.

It’s the free market at work, and the reality is that the commission structure gives everyday Americans critical advantages they otherwise wouldn’t get. That structure is what ultimately makes it possible for many people to realize the dream and benefits of homeownership.

That same free market makes it possible for small business owners to earn a living as real estate professionals. In fact, most of NAR’s 1.4 million members, including myself, are small businesses. We make a median gross income of $43,330 and are grateful for every dollar we earn.

As COVID-19 persisted, real estate agents worked tirelessly to navigate one of the most complex markets any of us had ever seen. Pandemic or not, day to day we’re managing untold challenges that buyers and sellers have to face. We handle the regulatory complexities unique to our own localities (each state sets its own licensing requirements for agents), we work to withstand the industry’s inevitable ebbs and flows, and we navigate the market to stay current on what our clients need to know and to stay competitive as a byproduct.

Real estate agents and brokers work, too, to help put keys in the hands of America’s small business owners. Entrepreneurs who define the spirit of this country endured some of the most significant COVID-induced financial hardships this year. We know their trials because we experienced the same ones. We continued to put roofs over their heads and food on our families’ tables.

And here is where the perils and unintended consequences of the actions by the Department of Justice against the current Multiple Listing Service (MLS) system are most alarming. Despite the White House’s strong, genuine desire to increase opportunities for homeownership among families of color, a fight against the MLS system would have the opposite effect.

In fact, the traditional commission structure, where the listing broker offers to share his or her commission with the buyer broker, ensures the greatest possible equity for first-time to middle-income homebuyers from all walks of life who may otherwise not be able to afford a home and professional representation.

If buyers had no choice but to pay a commission directly to an agent on top of their closing costs, it would increase out-of-pocket expenses in a way that could freeze out many from an already competitive market. With the nation in the midst of a historic, ongoing inventory shortage, that’s a problem that’s all too real today.

In fact, 24% of buyers in 2020 had to delay purchasing a home by more than five years because of the potential debt and 31% of those were first-time homebuyers. Given even more competitive pricing and bidding competition in 2021, those challenges are even more exacerbated. Seems to me the last thing we want to do is make buying a home harder for everyday Americans, especially given large racial disparities in homeownership still exist for Asian, Hispanic and Black Americans who make up a critical portion of first-time homebuyers.

In short, the American real estate system helps connect buyer’s agents with seller’s agents, creating the greatest number of housing options for buyers and offering sellers access to the largest possible pool of potential buyers. It’s a model that is both efficient and transparent and has worked remarkably well for decades. Employing the free market principles of private property rights, competition and open negotiation, our MLS system remains the envy of the free world.

NAR and real estate agents remain the nation’s strongest, most vocal proponents of that kind of generational wealth-building opportunity associated with homeownership. We advocate for policies that ensure the market is healthy and functional, that the American Dream is accessible for as many families as possible, and that our laws and regulations reflect real estate’s importance on the broader U.S. economy.

We work to ensure real estate agents have every fair and tangible resource at their disposal to keep the market moving forward. We create and offer education programs and professional development tools for REALTORS®. We recently launched a mentorship program designed to increase diversity in the industry, and we remain a tireless defender of fair housing laws in the fight against discrimination in real estate.

The desire for property ownership and the belief in the free market are in our DNA as Americans. NAR continues to fight for that tirelessly to the benefit of our clients, U.S. consumers and the nation as a whole.

Charlie Oppler
President, National Association of REALTORS®

Tags: CommissionsDepartment of JusticeIndustry NewsLitigationNARNational Association of REALTORS®Op-Ed
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Liz Dominguez

Liz Dominguez

Liz Dominguez is RISMedia’s Senior Online Editor. She compiles RISMedia’s daily newsletters, reports on breaking news and is generally jumping in wherever editorial assistance is needed. Liz’s goals are continuous learning and storytelling that resonates with readers. She’s currently pursuing her Master’s in Journalism from Harvard Extension School.

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Comments 58

  1. Morton Floch says:
    10 months ago

    Excellent presentation of the problem and of our efforts.  Thank you very much.

    Reply
  2. Debbie Krogman says:
    10 months ago

    WOW  well said President Oppler  Thank you for providing this to us.

    Reply
  3. Andy "G" says:
    10 months ago

    I have to agree with Mr. Stockel’s question why were we not notified for a call to action to notify our lobbyists of our concern for these actions. My understanding was our dues support one of the largest lobbyists organization “representing” us. Surely, “rumors” must have been circulating in the halls on capitol hill, so we wouldn’t get blind sided.

    Reply
  4. Michele Shillito says:
    10 months ago

    Thanks Charlie…
    Great Commentary!
    Loved:  “We continued to put roofs over their heads and food on our families’ tables.”  43 years, pushing 80 and still pounding in real estate signs.  
     

    Reply
  5. Denise Forman-Gaines says:
    10 months ago

    Thank you President Oppler for an excellently stated Op-ed for the DOJ’s argument!!  Interesting how the DOJ changed their mind. The last thing that First time homebuyers need is another fee to be paid for services rendered. The shared commission structure has served us well for decades, and now is certainly not the time for changes that would hurt the public. We need to focus on inequality in housing and building more housing for the country.

    Reply
    • Elva Rico says:
      10 months ago

      The share commission works most if the time in today’s market buyers agents has been drastically reduced I went to show a property which the listing agent was paying $1.00. I called the mls to verify if is correct and didn’t see any problem with it. As long as you put an amount. Many agents are paying 1%. It all depends what the listing agent wants to pay. When I list properties I tell the seller is 50/50 . So if you buyer wants to buy a property that’s only going to pay you $1.00 what do you do.

      Reply
  6. Michael Ackerman says:
    10 months ago

    Thank you for a well-written response.    
     
     
     
     

    Reply
  7. Steve Holzwarth says:
    10 months ago

    Thank you for speaking on all Realtors behalves. Meaningful and True commentary,
    Thank you, Charlie

    Reply
  8. Rick Arzet says:
    10 months ago

    Very well stated my friend. After celebrating 50 years and still going strong, I thought I had seen itall. I guess not. The new regime could not have thought this out that well before they moved. 
    Rick Arzet Atlanta GA. 

    Reply
  9. PATRICIA LOZANO says:
    10 months ago

    Thank you Mr. President for taking the time to write this article. I would like to see it printed more widely..it’s important to get the word out 

    Reply
  10. Ronald Gombach says:
    10 months ago

    Is it me not being able to find on NAR website where the public can interject their honest, real person view on issues such as DOJ/NAR interfaces. From my overview of the site, it looks like one must be a NAR member to post a comment that can be viewed by the public. If I’m missing something that’s truly pro-consumer ears/voice opportunity, please point me to it. Lacking such a voice, all the word-smithing appears quite disingenuous. I don’t want NAR (or RIS) or anyone telling the public what I think and feel. I’d rather the opportunity to be included, for real, in any online discussions. I’m tired of the industry as they apparently pretend they know what’s “good for the consumer. Why not share consumers real voices. Why is it so difficult?

    Reply
  11. Lisa Nguyen says:
    10 months ago

    That you for addressing the disparities in homeownership still exist for Asian, Hispanic and Black Americans who make up a critical portion of first-time homebuyers. I am in Colorado working largely with the AAPI community here and also nationally with AREAA. The Asian hate we have experienced this year and last because of the pandemic has caused even more barriers for the community. I hope NAR continues to support the community on a national level and can address things issues on a local level as well. We need more diversity on the local boards as there is a lot of on ground, grass roots efforts that need to be put into place before it can be felt nationally. 

    Reply
  12. Yolanda Carrier says:
    10 months ago

    I’d  like to say that as most of my client’s are First time homebuyers and minorities, we use DP programs about 85% of the time, or get closing costs from sellers, in a stable market, this change would take away from the client being able to buy a home, and I have at times credited a buyer to complete the sale, I think the seller hires me for a certain fee,  I choose to co-broke and decide on the amount based on many decisions, the seller has no right to choose how I co-broke, I hope for the sake of many buyers, this idea does not go forward, It will impact the average buyer, not the affluent ones and it will impact our businesses, Yes, the Lobbyists we paid to, failed us, we can’t fight a battle if we don’t know there is a war
     

    Reply
  13. Brooke says:
    10 months ago

    Mr. Oppler,
    Thank you for speaking out on the DOJ injustice frivilous lawsuit.  This was very well explained and right on the money.  Let’s all help spread the information presented here.  If we all fight together we can maintain the quality of service us Realtors bring to our clients every day.
     

    Reply
  14. KAREN THOMAS says:
    10 months ago

    1 – The suit was filed under the Trump administrations DOJ.  
    2 – Make sure that NAR and your local association have an email address that you actually check. There have been a number of communications and updates about this.
    3 – If might be worthwhile to have a campaign with members contacting their congressional representatives about having this appealed and dismissed.  At the same time promoting the continuation of agents as independent contractors.

    Reply
  15. Thomas Hutchinson says:
    10 months ago

    Buyers have always paid the commissions…it’s simply part of the sales price. Appraisers know this (they ask what concessions, if any were provided to the buyers), lenders know this and so does every underwriter, iBuyer, and investor.
    When’s the last time you represented a buyer wanting to purchase a FSBO? That savvy buyer understands that the FSBO isn’t paying a negotiated commission to a listing broker and expects to participate in that savings.
    This will forever be an issue until such time as we as an industry truly start educating the consumer.
     

    Reply
  16. Gladys Salkeld says:
    10 months ago

    Why change what it has been working for many generations in America. Let’s be thankful for still having low interest rates. It once was at 10% when I purchase my first home.  
    Thank you Mr. Oppler!

    Reply
  17. Ralph Mantica says:
    10 months ago

    Very well stated and we need to insure all 1.4m REALTORS understand this issues, its the job of every broker to pass this along to our sale force.

    Reply
  18. KATHLEEN G MORIN says:
    10 months ago

    Well Stated and on point! Thank you Charlie Oppler!

    Reply
  19. HAROLD HUGGINS says:
    10 months ago

    Dittos all around.  Well stated Mr. President.  You are serving us well.  Thank you. 

    Reply
  20. Ken Warden says:
    10 months ago

    Great job of laying out how the REALTOR works in this market. Thank You for being our leader at a very uncertain time.

    Reply
  21. Tracy Henderson says:
    10 months ago

    BRAVO! Thank you President Oppler! You so masterfully articulated our and our clients’ challenges to folks that are not in our industry shoes would totally be unable to relate to! Thank you for your leadership and for speaking up on our behalf!

    Reply
  22. Van Yon says:
    10 months ago

    Great commentary covering so many valid and valuable points! #REALTORSVoice

    Reply
  23. Neily says:
    10 months ago

    Thank you for putting out this statement. As a broker that has serviced communities of color for over 2 decades and has seen the wealth gap first hand, I cannot agree more with the statement that this would cause an additional burden and further set back this community and others. I appreciate your voice in a time where we continuously find ourselves defending our profession.
     
     

    Reply
  24. Diane Mcadams says:
    10 months ago

    Absolutely. Sometimes legislation is proposed and made by people who are not in the know of how an industry works. Thank you for reaching out and staying on top of this.

    Reply
  25. Amy Bladow says:
    10 months ago

    Thank you, President Oppler. We are at the forefront of the American Dream of Home Ownership and strive to be Professionals that abide by a strong Code of Ethics. Our profession has helped keep the economy rolling during COVID and for every property that is sold it puts 1 to 2 people to work. We have checks and balances and a lot of work goes into the home buying and selling process. That is why they hire us. This Is Who We R®.

    Reply
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