Zillow wins BIG in NAR Lawsuit! Loss in buyer agent fees will be offset with new listing fees 

You got the first half right, but have disagree with the second half. Residential is becoming no different than commercial. It's highly likely that the blanket offer of compensation on residential listings (i.e. NAR participation rule) will get removed via the DOJ in the next few months. Once that happens, a residential listing will look no different than a commercial one and there will be no benefit to listing it in MLS. Zillow may provide a basic listing for free, but sellers will demand premium placement at significant expense to the listing brokerage. I'm still quite bullish on Zillow - had you bought some shares when I published this video on 11/2, you would have enjoyed a 50%+ return on your investment.

​@@brianfitzrealtyIn a tight market, homes get sold by agents before they even make it to MLS/Zillow. How are you going to find listings that aren't even on the market yet? Maybe in Podunk, USA your theory makes sense, but in a bustling metro, you have to be well-connected and already know the property owners and have a portfolio of buyers already in your pocket. This will push a lot of brokerages to do exclusive listings and share only inside their brokerage. A good example is EXP. They have a huge market share and agent count and that will only continue to grow. We can drive traffic to our own brokerage sites with targeted ad campaigns now. 🤔 So, if MLS goes away according to your theory, I do not see Zillow having a massive impact. Anyone who thinks this has a fundamental lack of experience in this environment at a boots on the ground level.

Thanks for leaving such a thoughtful comment! I don't disagree, but unfortunately the jury does. You are correct that Zillow does make most of their money from agents, but the upside for them with paid listing is HUGE so it would more than offset that lost revenue. If there is no buyer agent commission offered in MLS, then there is no need for MLS. It's not going to attract any buyer agents so why bother? Today it syndicates, but as more sites realize agents are more than willing to pay for premium placement on their sites, fewer agents will list in MLS. All of this is hypothetical of course, it will take years to sort through. No one can predict what the future landscape will look like, but if you built your business around buyers, now would be a sensible time to pivot to sellers.

Absolutely both sides of the argument can be true. I know a free market will always drive towards efficiency and affordability

This comment did not age well. :)

@@buchyvon Not sure what you mean, cooperative compensation is the model that is moving forward. It’s just not required by a seller to list on the multiple listing service. My sellers were continuing to offer a buyers agent commission and even bonuses because they see the value in offering that kind of finders fee to thousands of agents in the local area.

​@@brianfitzrealtyso, not other information is exchanged on MLS? How about reverse prospecting and sellers disclosures, HOA documents?

Thank you for taking the time to share your perspective. All of what you just described has been possible for many years - just about everything in real estate is negotiable, and always has been. I can almost guarantee that this decoupling will have the exact OPPOSITE effect on commissions - they will actually go UP (in the long run)! There will be fewer agents (less competition) and the ones that remain will charge a premium - not because they want to, but because they have to for their business numbers to make sense.

@@brianfitzrealty I was a realtor and have many friends that are and were realtors. None of that was possible back when I worked for a broker. It’s easy to say it now that SHTF. But no brokerage would ever accept a sellers agreement unless they accepted the 4,5,6,7 % split commission structure. I’ve sold my last 12 houses and land with zero need for any Realtor and have told both Realtors and self represented buyers I do not pay commissions. At all. Zero. It’s my money as a seller. I will however pay the title company, a home warranty, and a small number to close the loan. A realtor is 100% unnecessary today. Every piece of paperwork that needs signed to close a deal is at the Title company or Closing attorneys office. It’s all going to change. Not one Realtor in the world is worth 20k in commission on a single purchase. 750-1500 tops.

Sounds like fsbo listing. You choose your selected items of service. However this will be problem, the seller or buyer will play dumb when they get in trouble and put the finger on the realtor for thinking the service is part of the transaction even when they choose not to select. Then the question is, we are back to the realtor being required to do the whole check list as prescribed by their local laws and regulations. Let's put it this way, nothing is free. If you are not going to argue your fee with a lawyer, neither should the real estate agent. Bottom line, no one force you to sign the agreement and you can negotiate your commission. You can always walk if you don't agree. Don't get seller remorse after the fact. The part about buyer and seller money separately, isn't that what they have been doing? Title company (3rd party) takes all money and disburses it when escrow is closed. Also, the title company processes according to the escrow instructions as determined when a ratified contract is in place. Everything is as transparent as it can be.

@@kito1sanexaclty

I just saw on the news yesterday where a gentleman posed as a closing attorney and signed a contract to sell a home to 2 separate Buyers way below market value and took them for over $200,000 when they both wired funds straight to his bank account, in which they thought they were sending funds to close the deal. There's value in a Realtor. We as Realtors not only market homes to include prepping the home for sale, staging, getting professional photos, answering multiple calls, choregraphing showings, negotiating offers, writing offers, showing homes, connecting Buyers with preferred lenders, scheduling inspections, host open houses, pay for custom yard signs, etc., etc. The list is endless. I have cut grass, cleaned toilets, cleaned out barns, painted homes, hosted estate sales, met with contractors to install appliances, make repairs, conduct additional testing such as septic tank testing, radon testing, termite inspections, met up with surveyors and soil scientists, visited the local Planning and Development Department and Environmental Health Department..........whatever my Client needs. My scope of work goes way beyond what the general public thinks I might do. I don't just drive around in my car and push paper. I work anywhere from 60-80+ hours per week. Never a vacation. Never any down time. My phone rings from 6 am to 12 am. I am dedicated to my Clients.

I don't disagree, but nothing we can do about it at this point. After reviewing the modified listing and buyer agency agreements last week, I can honestly say that very little is going to change. This whole thing was a cash grab by some very smart personal injury attorneys.

Not sure they were behind it, but they will certainly benefit when these MLS's start to lose their grip on the local market. What I find interesting is that Wall St. had a knee jerk reaction to the ruling and punished all real estate stocks, including Zillow. Not a single analyst has figured out that this unlocks a potential advertising revenue windfall for sites like Zillow because they currently cannot promote, nor give favorable placement, to listings per NAR rules. Once the DOJ is done punishing NAR, those rules go bye bye. That will more than offset the lost revenue from agents that are paying for buyer leads.

Wow - seems like you've got it all figured out. Since it's so easy, you should become an agent yourself. If you don't see the value in using an agent to buy or sell your home (clearly you don't) then don't use one? There is nothing preventing your from doing it yourself. And since it's so easy, you shouldn't run into any issues. 🤣

@@brianfitzrealty 🤣🤣🤣 I noticed you didn't dispute anything I posted. As far as being a agent, I could not live with myself scamming people out of their money just like a used car salesmen. Remember the DOJ is requiring the nar to pay $418 million and change the requirement for buyers commission because realtors got caught being shady. (Antitrust)

It's called Showcase Listings. I talked to them about it a month ago and the buy-in was $1k/mo. and you pay it whether you have a listing or not. If you had more than 1 listing, you'd have to pay an additional $1k for each one. They don't carry over any "unused" listing credits. What's worse is there was no limit to how many showcase listings there could be in any market. So once a market gets saturated, it just becomes the cost of doing business - or your listings will NEVER be seen by consumers.

From what I can gather, the courtroom was FULL of people that had a non-disclosed personal relationship with Ketchmark including the judge and at least one juror. It was most definitely not a fair trial and hopefully will get overturned by a higher court.

EXACTLY!! We've already had one local attorney that sent out an email to their clients saying "hey, next time you want to buy, you can bypass the agent and I'll do all the paperwork for you". Needless to say, his business is suffering massively because agents are no longer referring clients to him. This is going to hurt both buyers and sellers in the long run and lawyers will be laughing all the way to the bank.

In what way do agents prevent this?

There is nothing agents can do to stop this type of behavior. The market will determine if it's better to use an attorney as opposed to an actual real estate agent. My money is on the agent prevailing.

Agreed. It may take time, but when someone has a bad transaction because nobody caught the underground oil tank, etc. that buyer/seller will want another set of eyeballs looking out for them.@@brianfitzrealty

Feels a bit like that! Reminds me of the "Virus Protection" software that was bundled with all PC's in the past - they just magically were able to send out patch fixes seemingly within minutes of a new virus being discovered - but only if you were a paying customer...

I think so too. It's highly likely that the clear cooperation rule will end and render MLS's ineffective at generating buyer interest. At that point, listing agents will go straight to Zillow, Trulia, Redfin, etc. to advertise their properties and funnel buyers directly to themselves.

Agents will go (and spend money) where the buyers/sellers are - which right now is Zillow. It's not a question of if Zillow will stop posting MLS listings for free, it's a question of when. I can picture a scenario where they give a free basic listing, but then you can pay to upgrade and get more exposure, leads, etc. This is similar to the way auto aggregator sites like AutoTrader, CarGurus, etc. work. Currently, NAR does not allow for that type of advertising, but as more brokerages leave NAR, there will be no rules to follow and they will be able to do whatever they want. As for buyers paying for their agent's commission - very few have the means to do so. As a result, they will buy without representation directly from the listing agent who will collect the entire commission. No matter what happens, there are some BIG changes on the horizon. Thanks for sharing your perspective!

Ask your lawyer.

It's no different than what it was before the lawsuit - negotiable.

Are you suggesting the lawyer would negotiate commission on his behalf or should he just sell his house himself and use a lawyer for paperwork?

@@brianfitzrealty Yes. But I'm also implying that it will be just as much or more to try buying or selling a house with a real estate lawyer rather than a Realtor that is being treated like an Uber Driver. It's a sarcastic and bitter response to a question that a real estate lawyer doesn't ever get asked.

@@damienrockstarthholyonofg3103 Ahh, gotcha. There was a leaked email from a local lawyer that tried exactly this. He got roasted and there are many agents that are now refusing to work with him and have stopped referring customers. Attorneys are great for paperwork, but good luck getting one to a private showing or inspection...

I don't disagree, but what's done is done. When I recorded this video, investors were dumping Zillow stock. Here we are 5 months later and others have finally figured out what I recognized back then and Zillow is up over 60% since. I'm not the sharpest tool in the shed, but some things are obvious if you look past the mainstream headlines.

lol. There is ChatGPT now. Think about how TurboTax made accountants lose their money during tax season. A lot of sellers are super old and easy to manipulate. Not the younger buyers. The ones who rely on buyer agents are stupid.

Real estate commission has been the same because it is a percentage. As home prices go up, the total cash in for the realtor rises accordingly. So…. Realtors get a nice raise every time inflation goes up.

I don't disagree. We'll have to wait and see what the judge decides moving forward. I think the most logical outcome will be that buyer agency will still exist, but those agents will have to be paid for by the buyer or agreed to be paid by seller at time of offer. I think he is going to flat out reject the idea of cooperating commission moving forward. No matter what happens, there will be LOTS of opportunity for those agents that stick around.

Alone? You just need one agent. Doing the entire thing alone I see your point especially if your not well versed in the industry

The guy that ran a horse stable was thinking the same thing when the first cars drove by

@@danielmcpartlin6526 But we didn't go back to walking. After they saw the cars go by, we went forward to cars. This is a huge step backwards.