The Owl Report - November 12th, 2023

The NAR verdict - Is this just the beginning?

The National Association of Realtors (NAR) and top brokerages, recently penalized $1.8 billion for conspiring to inflate real estate commissions, face a new lawsuit. This action, potentially escalating over $5 billion, follows the 2019 case representing 500,000 Missouri home sellers. Lawyers are now targeting a broader scope, including anyone who sold a home in the last five years, citing an excess of $60 billion in real estate commissions paid by Americans.

Central to the original lawsuit was the NAR's mandate for sellers to pay commissions to both their and the buyer's agents. The ruling challenges this practice, potentially halving commission costs and allowing for independent rate setting by agents. This decision, a critical turning point in an industry known for high transaction fees, questions traditional realtor roles and could shift more responsibilities to attorneys, promoting transparency and equity in the market.

As the industry navigates this pivotal period, the new lawsuit amplifies the stakes, with tens of billions of dollars in commissions in play. It signals a major shift in realtor compensation, arriving at a delicate time for the real estate market. This legal action is a precursor to a more consumer-focused real estate landscape, indicating profound changes in transaction conduct and regulation.

-Josip Rupena, Milo CEO

Quick news insights

• Here's What's Next for the Housing Market After a Massive Realtor Lawsuit, Money

• Everything's Relative, And Rates Had a Relatively Good Week, Mortgage News Daily

• Bypassing Mortgage Rates: Share of US Homes Bought With Cash Hits Highest Level in Nearly a Decade, US News

The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.