DOJ v. NAR and the ethics of real estate commissions
For our first episode, we discuss what’s in store for Houses in Motion and chat with HousingWire managing editor James Kleinmann about the Department of Justice’s recent move to withdraw from a settlement agreement with the National Association of Realtors.
We also interviewed Max Besbris, assistant professor of sociology at the University of Wisconsin-Madison and the author of “Upsold: Real Estate Agents, Prices and Neighborhood Inequality.”
Besbris discusses the DOJ-NAR skirmish, and also takes a broader look at the economic incentives driving both real estate agents and consumers.
Here is a small preview of the interview, which has been lightly edited for length and clarity:
Matthew Blake: Do you feel that commission-based pay for agents dictates how agents behave? Or do you feel agents would behave the same if it were a salary-based model?
Max Besbris: I think the answer is complicated. There is certainly a lot of research that shows that real estate agents don’t necessarily have a motivation to increase prices because most people are pretty limited in the amount that they can spend.
And so, by and large, what past research has shown is that real estate agents, instead of trying to drive up prices on individual transactions, are trying to do as many transactions as possible. They are interested in volume and speed, in particular, they want to sell houses very quickly.
HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsroom that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Elissa Branch.
HousingWire articles related to this episode:
Below is the transcription of the interview. These transcriptions, powered by Speechpad, have been lightly edited and may contain small errors from reproduction: