Analysts at Keefe, Bruyette & Woods I believe the statement indicates that the DOJ “is not satisfied with the scope of the remedies in the proposed settlement with private plaintiffs and continues to pursue its own independent investigation into NAR, which may result in enforcement actions with more aggressive changes to industry practices .”
Attorney and industry expert Rob Hahn shared a similar view in the Nov. 25 edition of his Substack newsletter, Notorious ROB. “The DOJ is coming for NAR. Only total surrender or total regime change can stop this,” he wrote.
Hahn notes that the DOJ in its statement directed the court to tell NAR “that this settlement is not intended to protect them from the wrath of the DOJ.”
“First and most important is the fact that the DOJ is going out of its way to tell the Court (and therefore the world) that the Court’s final approval of the settlement does not mean that any of the practice changes have been agreed to to comply with the antitrust laws. ,” wrote Hahn.
Marx Sterbcow, manager of Sterbcow Law Groupbelieves that the next issue the DOJ will discuss with NAR is cooperative compensation. This is still allowed under the terms of the settlement, just not on the MLS.
“The DOJ wants a complete unbundling of the seller’s agent paying commission to the buyer’s agent,” Sterbcow said. “And if I’m a publicly traded company that just has to write a check for tens of millions in a settlement, I don’t think my shareholders would be happy if I continued to do something the DOJ doesn’t want.
“The first major brokerage to do this will take some heat, but others will follow very quickly because anyone with a brain knows that the DOJ is a bowling ball rolling downhill at warp speed and on the attack. .”
Additionally, based on the DOJ’s Statement of Interest, Sterbcow believes that buyer representation agreements have now been added to the DOJ’s hit list. He also believes the agency raises some good points in its argument.
“I don’t disagree with them. Have you seen some of these similarities? If I get a Ph.D. in rocket science and a master’s degree in real estate law, I still don’t think I can figure out some of these contracts. They were introduced without really thinking about the consumer,” says Sterbcow.
“It’s clear that the DOJ doesn’t like them and wants the industry to eliminate them, but the settlement doesn’t really leave you with many options. You’re damned if you do, and damned if you don’t.”
While NextHome CEO James Dwiggins doesn’t dispute that the DOJ isn’t done with NAR yet. He doesn’t believe buyer representation agreements will be the next battleground for the industry.
In one post up LinkedInDwiggins pointed out that before the settlement terms went into effect nationwide, 16 states already required buyer representation agreements.
“The DOJ can have fun overriding states rights,” Dwiggins wrote. “I don’t think they want to get involved politically.”
But while there may be merit to the “states’ rights” argument, Sterbcow isn’t convinced it will hold up with the DOJ.
“There are many people who say that state law trumps federal law, and that is true, but the DOJ can assert its authority by saying that the states with a mandatory buyer representation agreement did not adequately monitor and do their research to ensure that their purchasing cause rules, together with the buyer broker agreements, did not harm consumers,” Sterbcow said.
“The reality is that none of those states have done any research or work to study this and look at the harm to consumers, so I think the DOJ could easily overturn the states’ rights challenge on this.”
But whatever the nuances, industry experts agree that antitrust issues in the real estate industry are far from over.
“We appear to be at the end of the beginning regarding the remaining unresolved lawsuits and possible antitrust actions from the DOJ,” said Chuck Cain, an attorney and chairman of the U.S. Justice Department. Alliance solutionswrote in an email to HousingWire.
“Whether the new attorney general will change that focus remains to be seen, but the DOJ has kept a close eye on NAR’s business practices for three decades, across both Democratic and Republican administrations,” he added. “It will also be interesting to see if the DOJ takes action against parties who received prejudice dismissals in their civil antitrust cases, such as Howard Hanna, Inc. recently did in the Moratis case in federal court in western Pennsylvania.”
