The National Association of Realtors (NAR) is currently dealing with several class action lawsuits that could impact the entire real estate industry and mortgage lenders. These lawsuits are expected to have notable consequences, potentially changing industry practices and regulations. The cases filed against NAR are:
- Sitzer/Burnett v. National Association of Realtors, et al., filed in 2019.
- Moehrl v. National Association of Realtors, et al., filed in 2021.
- Jones v. National Association of Realtors, et al., filed in 2020.
All three lawsuits allege that NAR’s policies and practices violate antitrust laws by inflating the fees paid to buyer’s agents. Specifically, the lawsuits challenge NAR’s Participation Rule, which requires listing agents to make a blanket offer of compensation to buyers’ agents in order to list the property on a Realtor-affiliated multiple listing service (MLS).
The plaintiffs in the lawsuits argue that these rules prevent buyers from negotiating lower commissions with their agents and raise the cost of homebuying.
The Sitzer/Burnett and Moehrl lawsuits have been consolidated and are currently scheduled to go to trial in October 2023. The Jones lawsuit is still in the early stages of litigation.
The outcome of these lawsuits could completely change the way homes are brought and sold in the United States.
What might this mean for agents & lenders?
If the plaintiffs are successful in the lawsuits, it could lead to a number of changes for real estate agents and lenders. One possibility is that the role of buyer’s agents could be eliminated or drastically reduced. Another possibility is that buyer’s agents would be compensated on an hourly basis or on a consulting basis, rather than through commissions.
This could lead to a more UK-like environment, where buyer representation is a luxury and a majority of transactions do not include a buyer’s agents. Buyers may begin to represent themselves, looping in attorneys to draw up contracts, and slowing down the home buying process across the board. This would have a significant impact on lenders who rely on buyer’s agents for referrals. Lenders could lose a valuable source of referrals and may struggle to get in front of their target clients directly, especially if their business model is referral reliant.
How can CANDID help?
Regardless of your business model, CANDID has the resources to conduct diversified marketing with the most expansive reach.
CANDID offers customized drip campaigns meticulously crafted to engage, offering value-based marketing opportunities to CPAs and Financial Planners. CPAs and Financial Planners are automatically notified of changes in their clients’ homeownership status and provided with necessary information to handle their client’s finances most effectively.
For previous clients, CANDID’s helps to maintain long-term relationships through an extensive marketing strategy extending 7 years beyond closing. This strategy includes Annual Mortgage Reviews, complete with home value reports to keep clients informed about their property’s worth. CANDID ensures a personal touch with home value celebrations emails and handwritten birthday cards, all designed to maintain a meaningful connection with clients for years after the initial transaction.
As CANDID optimizes every part of the loan process, it’s designed to impress all parties. Crucial communications and timeline updates always include the listing agent so they can experience a stress free closing along with their clients. CANDID helps provide an exceptional lending experience, while opening doors to collaborating with agents on the listing side you may not have previously partnered with.
CANDID is here to future proof your business. Schedule a demo today.
