Dear Monty: We have been following the news regarding the class action lawsuits against the real estate trade association and a number of the major brokerages. We have spoken to two real estate agents we are acquainted with to hear their reactions. The responses we received were very different and left us confused about the buyer agent's role. What is your response to the upcoming changes in buyer agency?

Monty's Answer: The trade association is the National Association of Realtors. NAR is not accustomed to losing battles with the Federal Trade Commission and The Department of Justice. According to Rob Hahn, the managing partner of a strategy consulting firm in the real estate industry, litigation has been ongoing for more than 100 years. Even as the dust settles with the new rules, the struggle for leadership within NAR and the tactics different real estate companies are implementing add to clouding NAR's future. Many more lawsuits have been filed since the Sitzer/Burnett settlement.

CONSIDER THE POTENTIAL BENEFITS OF NOT USING A BUYER AGENT

No. 1: All the information one needs to search for and identify a home to view is available online today. The sources are real estate platforms, real estate companies, local and state governments that employ geographic information systems and private companies that offer real estate-related information. Many consumers today are finding buying a home directly from the seller is surprisingly easy.

No. 2: The change that has been mandated will be challenging to implement and monitor and create additional friction in real estate transactions. If you want to use a buyer agent when these rules take effect, the buyer will pay the buyer agent commission, which can no longer be financed. Additionally, your buyer agent must contact the listing agent, who must contact the seller to negotiate a buyer agent commission. Will that take hours, days or weeks? What if the listing agent is already working directly with a customer?

No 3: The 500-plus multiple listing services are inefficient and stacked against home sellers and buyers. When a buyer uses a buyer agent, they are bound to use the state-approved forms, which the Consumer Federation of America says are biased against the consumer.

No. 4: Real estate consumers are learning how to do it themselves. With higher home prices and commissions based on percentages, agents have been getting big raises as home values soared during the past three years. NAR said about 500,000 homes were sold privately in 2022. NAR's customer is the real estate agent, not the consumer, and as a trade association, many of their articles feel like native advertising.

No. 5: Real estate agents have different motivations for becoming agents. Some of these motivations contradict the founding principle of organized real estate — putting your customers' goals ahead of your own. Asymmetry here is alive and well. I've written more on my website about agent motivations for working in real estate as independent contractors.

HOME BUYERS HAVE OPTIONS

Contacting the listing agent may be the easiest way to view the house. Another option is using for-sale-by-owner websites, which will reveal homes that are absent from MLS and, finally, choices that have yet to be invented. We all must wait and see what choices develop when the rules take effect.

Richard Montgomery is a syndicated columnist, published author, retired real estate executive, serial entrepreneur and the founder of DearMonty.com and PropBox, Inc. He provides consumers with options to real estate issues. Follow him on Twitter(X) @dearmonty or DearsMonty.com.

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