In response to the Department of Justice hitting back against a petition from the National Association of Realtors, NAR president Charlie Oppler urged the DOJ to honor their agreement, calling for fair markets, fair housing and a fair chance for small businesses.

You should be able to count on the Department of Justice (DOJ) to honor an agreement.

And yet, in a complete breach of commitment and legal precedent, the DOJ backed out of an agreement with the National Association of Realtors (NAR) that would that more explicitly state the spirit and intent of NAR’s Code of Ethics and MLS guidelines in some key areas.

NAR has forged ahead. At our annual conference in November, NAR’s board of directors will consider motions by the Technology and Emerging Issues Advisory Board that reinforce greater transparency and disclosure of compensation offered to buyer’s agents, ensure listings aren’t excluded from search results based on the amount of compensation offered to buyer’s agents, and reinforce that local MLS market participants do not represent brokerage services as free.

And yet, the DOJ filed a response last week balking again at any commitment to honor the agreement in response to our petition saying it should.

This same agreement also spoke volumes about what didn’t need fixing — the pro-consumer, pro-competitive local broker organizations that make fulfilling the American dream of homeownership efficient, transparent and fair for millions of people every year.

What does all this come down to?

This is about defending a fair and competitive market

Because of multiple listing services (MLSs), we’re seeing unprecedented competition among brokers, especially when it comes to service and commissions. Many new and small businesses are competing specifically on commission with varied commission models and flat fees.

These local real estate databases serve as a central hub for the vast majority of homes for sale in a given market, so buyers can work with one broker (instead of many) and have access to virtually all of the properties for sale in their area.

In turn, sellers get access to the largest possible pool of buyers working with brokers within a market. In the process, these local broker organizations level the playing field among brokerages, allowing small brokerages to compete with large ones.

And for every home sale by one of those brokers, it generates roughly $88,000 in local economic activity, and every two home sales supports one American job. Overall, real estate accounts for nearly 18 percent of the nation’s GDP.

This is about promoting a fair opportunity to own a home

The approach of the listing broker paying the buyer broker’s commission ensures greater access for first-time, low-income and many other homebuyers who otherwise couldn’t afford to purchase a home and hire professional representation.

In fact, 24 percent of potential homebuyers in 2020 delayed purchasing a home by more than five years because of the potential debt. For many, saving for a down payment is difficult enough.

Paying a broker’s commission out of pocket at closing could put homeownership out of reach or force people to go through the home buying process alone and without professional representation. This has been magnified in the highly competitive sellers’ market we’re experiencing right now.

This is about giving small businesses a fair chance to earn a living

Realtors, 88 percent of whom are single offices, typically with two full-time real estate licensees, are working hard every day to best serve their clients and make a living.

Despite one-off claims of online omniscience, the reality is the vast majority of people — especially those fighting for a fair chance to own their first home — need help navigating the complex real estate, regulatory market and legal facets of buying and selling a home.

Real estate agents serve a critical role in providing equitable opportunities for those consumers. And agents are competing every day on compensation and customer service. In fact, because of the rise in competition, Real Trends, a Colorado-based research firm, cited that the average commission slid to the lowest ever in 2020.

This is about a fair expectation that a government agency will stick to an agreement

This is particularly true when it’s an agreement that advances pro-consumer, pro-competitive local real estate markets. NAR worked in good faith with DOJ to come to an agreement and expects the same from in return.

Case law supports the fact that they are required to live up to their contractual obligation. The courts also have repeatedly upheld the value of consumer-friendly MLSs as early as 1966 during the Johnson administration, in 1995 during the Clinton administration and as recently as 2018 during the Trump administration.

We’re asking the DOJ to step up and own what it agreed to. That would be the fair, just and the right thing to do. Fair for a diversity of consumers trying to achieve the American dream of owning a home. Fair for real estate agents trying to earn an honest living. Fair to small businesses trying to compete in a market enabled by the local broker organizations.

Charlie Oppler is the president of the National Association of Realtors in Franklin Lakes, New Jersey. 

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