Industry Expert Steve Murray on the implications of NAR’s commission lawsuit settlement

We are dropping a breaking news episode in your feed today as Steve Murray of RTC Consulting joins us to discuss an important update in the class action commission lawsuits brought by home sellers across the nation.

The National Association of Realtors (NAR) has settled for $418 million and will make several policy changes, pending court approval. This proposed settlement has several implications for the real estate industry, including the removal of compensation offers from the MLS. Murray talks about the potential for more commission compression as well as the possibilities for new business models, additional brokerage services and the future of NAR and state associations.

Here’s a glimpse of what you’ll learn:

• The settlement in the class action commission case has several implications for the real estate industry.
• The settlement opens up possibilities for new business models, with big brokers having an advantage.
• The billions in savings for homebuyers is a myth. Murray explains why it may not lower home prices.
• The settlement is significant, but its effect on DOJ’s broker compensation concerns is yet to be determined.

Here’s a small preview of today’s interview. The transcript below has been lightly edited for length and clarity:

Tracey Velt:  Let’s go into some of these new business models. What would they look like? What do you see them looking like? It seems to me that big brokers have a huge advantage in this because they have obviously control over all of their listings.

Steve Murray: I haven’t spoken to any of my contacts among the large brokerage firms yet, but it would occur to me that some have have already started thinking about it. If this was to happen, how am I going to keep some revenue from buy side representation and service? How am I going to keep the market as fluid as we can?

I could see the evolution of something that looks like a transaction management service for buyers to handle all the details that a buyer’s agent normally does, and maybe offers it at some flat fee. I could envision companies like title insurance companies who do a lot of this anyway, perhaps offering those kinds of services. The title companies have the infrastructure to do it, but will they want to step on their real estate clients who are the source of a lot of their business? That’s what we call channel conflict. So there’s a lot of these channel conflicts that may prevent incumbents of all kinds from implementing these new services.

The RealTrending podcast features the brightest minds in real estate. Every week, brokerage leaders, top agents, team leaders, and industry experts share their success secrets, trends, and lessons learned navigating this ever-changing industry. Hosted by Tracey Velt and produced by Elissa Branch.