4 Week Post Settlement - Anthony's Thoughts

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Anthony Lamacchia: Today marks four weeks since the settlement was finalized and it was made public. Folks, buyers are still buying. Sellers are still selling. Buyers and sellers are still calling real estate companies, asking to sell and buy, clicking on Zillow and realtor.com and asking to contact agent, logging onto our website and looking to buy and sell. As I said from day one in my statement, realtors are going nowhere. The general public having a need for realtors will not change. It has not changed. That’s the good news.

What has happened over the last few weeks? Yes, there’s been a few more clients that have asked, “Hey, what is this about? How does this work? What are they talking about? I, as the seller, shouldn’t have to pay. Should I?” We’ve had a few more people ask, but really nothing has changed because when it’s explained by a qualified realtor, people understand that, “Geez, the way things have been done ain’t so bad. It seems to work.”

I had a friend walk up to me at the park two Saturdays ago when I was there, and this is someone who was very good in school, very smart person, and he is working for a government agency. He said to me, “Hey, I’ve been reading articles about this settlement and about these cases, and some of them say it’s good for buyers and doesn’t sound good for buyers to me. It sounds like they think the buyer should pay it out of pocket.”

I looked at this old friend and I said, “Have you been watching my videos?” He said, “No, but I’ve read the articles.” What’s interesting is a lot of people in the public understand it, and they don’t believe the lies that are being spewed by the plaintiff’s attorneys. Some of the lies or misconceptions or just plain poor reporting that has been put out from places like The New York Times, from Deborah Kamin, who is the queen of misreporting on this case and who created a complete wave of bad reporting on this case. I’ll get there in a few minutes.

Let me stay here. What is happening so far? Contracts are still being negotiated. Buyers are still wanting to buy homes. Multiple offers on properties in many states. Sellers, yes, asking some more questions as our buyers, but no real genuine pushback. July is approaching. Remember, this proposed settlement that actually hasn’t even been filed at the court yet. This proposed settlement isn’t final. It is proposed. The judge has to rule on it. In addition, there’s talk now that the appeals court pretty much ruled against NAR and said, “It is okay for the Department of Justice to reopen an investigation.” They could come in with their statements and the waters could get muddy.

Truth be told, “Folks, what do I think?” I don’t think this is taking effect in July. It’s way too fast. The average listing agreement is what, four to six months? There’s going to take time for this to get approved. The judge will approve it at some point, probably take effect later in the year. However, realtor friends, do not be fooled or naive into thinking you can take this lightly. You need to take this very seriously. That’s why you should stay tuned into my videos on YouTube or you can go to recases.com to see everything, all the articles I’m going to talk about today, et cetera.

In a world pre-settlement approval and pre-it taking effect, which is the world that we are in now, you can continue to do business pretty much as usual, but you should be smart. You should be getting buyer agency agreements or buyer contracts signed. Many of you haven’t been using them for years. I’ve been teaching them for years. I got them signed for years before in the prior decade when I was selling, but they’re necessary. You also should sharpen up on your conversations with buyers and sellers about compensation, how it’s working, how it’s being paid.

One of the questions many have gotten is, or some have gotten is, “What happens after July 1st? Is this going to be different?” We don’t know the details yet. In the meantime, realtors should just get listing agreements signed, in my opinion. Obviously, you have to listen to your broker. If you’re not at our company, which is the majority of people watching, listen to your broker and get your own legal advice. My opinion is get the current listing agreement signed until there’s new ones created. Perhaps, there will have to be an amendment to agreements. Perhaps, a new one will roll out in a certain date, which I’m sure it will. We shall see what exactly happens as we get closer.

In the meantime, sharpen up on those skills, okay? Buyers will continue to want to buy. Sellers will continue to want to sell. People will still want to use realtors, including buyers. Some of the haters on the plaintiff’s side, or whoever put them up to this, because to this day, I am certain someone [unintelligible 00:04:53] Michael Ketchmark on our industry. Someone there who’s a disruptor, who thinks, “Well, why do we need realtors? Why does a buyer need a realtor? They can find this online.” Folks, people are still going to want realtors. These decisions and home buying, et cetera, are both financial and emotional to people. They are both. That’s why people want realtors.

Back to bad reporting. I was just watching on Instagram a couple of times, this reporter who’s just a terrible reporter, okay? I said that, terrible. An accurate reporter, a good journalist, puts out balanced stories, gets to the facts and reports on the facts. This reporter here, Debra Kamin from The New York Times, she doesn’t do that. She preaches all kinds of misconceptions and things. I’m going to read what she said, and then we’re going to show it to you on screen. In this latest video, “6% of the transaction is a lot of money. Pretty much universally across the board, we can expect when commissions go down, sale prices of homes will go down too.”

Debra Kamin: This is most likely the most important and the largest financial transaction an American will make in their entire life. 6% of that transaction is a lot of money. Pretty much universally across the board, we can expect when commissions go down, sale prices of homes to go down too.

Anthony: Not true. Home prices are affected by supply and demand. There have been some homes that have believed a lot of this garbage, like the garbage that she’s putting out, and some sellers have said, “I won’t offer compensation.” When they do that, they’re substantially decreasing their pool of buyers. Buyers are avoiding their properties, and we have found some of those properties have sold for less.

You could hear that and say, “Well, that’s exactly what she said. Prices will go down.” No, they will not go down when things are done across the board. Prices are affected by supply and demand. Demand decreased on some of those homes because the demand is the buyers. When the buyers see that there’s no compensation being offered and their realtor looks at them and says, “Well, hey, just a heads-up on that house, no compensation is being offered.” What happens then? Many buyers say, “I don’t want to see the home.”

Let’s look at some other poor media. Stephen Brobeck, the Senior Fellow from the Consumer Federation of America. Sounds like a great title, right? “Any additional costs to home buyers are likely to be modest in relatively short term and will be more than offset by long-term savings and improve service quality.” He says that in an Inman article, I believe that was put out on about April 8th. Okay. A lot of interesting things here in the last couple of weeks.

The Deborah Kamin video, by the way, I forgot to mention the one on Instagram that was put out on April 1st. Perhaps, it was an April Fool’s joke. Maybe she didn’t mean it. I don’t know. What about the podcast that she put out before that? We’re going to put that in our RECASES. Realtor friends, if you want to cringe, if you want to have deep seated anger towards Deborah Kamin in The New York Times, go listen to that podcast. She went one after the other with a misconception, saying things the wrong way, et cetera. Go listen to that.

Back to Stephen Brobeck. Any additional costs to home buyers are likely to be modest. Really, Stephen? Okay. When a buyer goes to buy a $500,000 home and their closing costs are, who knows, roughly $5,000, call it 1%. Their down payment. Let’s say they do 10% down. Their down payment’s $50,000. Okay. What’s that? $55,000. They’ve got to come out of pocket with some money for commission. I don’t know how much. It depends on who they hire. Depends on who they work with. Remember, folks, people get what they pay for. When he says here, in many of his comments throughout this article, the fees will be lower. The fees will be lower.

Folks, when you go to see a surgeon, do you want the cheapest surgeon? No, because the cheapest surgeon is probably not the best surgeon. Agents who are willing to give in on fees and work at cost or work at a loss, those are likely to be newer agents that aren’t as good. This is the largest financial transaction that most buyers will ever have in their life. Most people will ever have, whether they’re buying or selling. If they find someone who’s willing to give in on fees, give in on terms, they’re likely not a seasoned veteran in the business.

Remember what I said in earlier videos? Prices are set often by costs. Costs affect pricing. When they try to argue, “Well, there’s similarity in the fees,” one thing they do. Debra does it 17 times a day in her articles that are terrible and in her podcasts and other things. 6%, 6%, 6%. She says it so much, I actually think it’s reached the point that it’s helping the real estate industry because she’s making it sound like 6% is the norm. It’s not. I wish it was. It is not.

Fees vary market to market. Fees vary based

on the season, based on the demand, but she keeps preaching that and then Brobeck makes all kinds of points in this article. It’s like the whole article was all about him. It’s a bunch of crap. Think about that. Think about how people won’t work for free. I also will say, it’s interesting that we’ve been through several weeks here, four weeks today. Not a lot’s changed.

It shows people don’t really trust the media. They really don’t, because if you read the media barrage that, by the way, started at 9:35 in the morning on March 15th when it wasn’t supposed to be released till 10:00 AM. That’s a breach of contract by Michael Ketchmark and all of his lawyer friends. Clearly that’s a breach of contract in my opinion. They put it out early.

If you read that article that The New York Times broke with Debra Kamin, who’s clearly in cahoots with Ketchmark. If you read that, it was clear they got that article a week in advance. I hope NAR does something about that because we shouldn’t let him get away with that. I also hope NAR does something about The New York Times and Debra Kamin constantly attacking NAR since last summer. Really makes me question every article she’s ever done. She went after a past president, attacked personally, et cetera. I don’t know what was accurate and what wasn’t. I look at it and I say, and I read what’s happened here and I see the reaction of many realtors and I say, “Geez, we’re doubting what she says now. Should we have doubted what she said all along?”

She clearly has it out for the National Association. She clearly has it out for realtors. She clearly has it out for homebuyers, truthfully. What she’s doing and what she’s preaching is hurting homebuyers and home sellers. I hope I’m making that clear. There has been some positive news. One of them was even from a realtor in our company who made a great comment. This reporter at The Boston Globe, Jim Morrison, who’s always digging for the facts, been in many articles that he’s written over the years. He spoke to me. He spoke to Shant Banosian, a mortgage broker, the best in the country. He spoke to Kevin Sears, President of NAR. I love what Paul Cervone said. “I don’t know where all the consumer advocates and veteran advocates are.”

Paul does a tremendous amount of VA business. He’s been very concerned since the beginning and he’s been one of our realtors that have been beating the drum for VA saying, “What the hell? This isn’t good for veterans buyers.” Kevin Sears said, “VA buyers are immediately at a disadvantage, potentially forcing them to forego professional representation, lose a property in an already limited inventory situation, choose a different loan product or exit the market entirely.” He’s right.

To my amazement, The New York Times put out an article. I don’t know the date. Oh, here it is. March 25th. Could first time buyers lose out under new commission rules? They actually broke some of it down. I was surprised. It didn’t surprise me. Debra Kamin didn’t write that. Any accurate reporting on this subject is not coming from her. Shout out to the positive articles. I should say the truthful articles.

A couple of legal updates I want to go through. There was a multi-district litigation hearing in South Carolina on March 28th to talk about potentially consolidating the cases. They actually had judges from around the country fly in and go over this together. They haven’t ruled yet. I want to just go on the record and say what I’ve said before, and it’s worthy of repeating. If they consolidate the cases in any district other than the Western District of Missouri, I think that makes sense for both sides.

If they consolidate into the Western District of Missouri to Judge Bough’s courtroom, Michael Katchmark’s court, Okay, we got a problem. We got a problem, folks. That’s not going to work. Things will go even more poorly in the favor of the defendants and homebuyers and sellers, because really what the plaintiffs are doing, they’re going to hurt homebuyers and sellers. US Court of Appeals, they ruled just the other day on a hearing that they had several months ago where they said, “It is okay.” This is a fascinating to me, two to one ruling by the three judges. “It is okay for the Department of Justice to reopen something after they make an agreement to close the case.”

If you remember correctly, they opened an investigation against the National Association of Realtors in 2020. By the end of 2020, they made an agreement to close it, and they made an agreement for 8 or 10 years. New administration comes in, they take the agreement apart and open it up. NAR sues the Department of Justice, which they were right to do. It goes to the US Court of Appeals. Court of Appeals comes back, “No, it’s okay for the DOJ to do that.”

What? Who the hell is going to make an agreement with the DOJ moving forward, if they know that it’s okay for them to undo agreements? I’m a business owner. If I had a problem with them now, I would know that they can undo an agreement. I hope NAR takes that to the Supreme Court. There’s been some articles that say they will. I hope they will. I hope they hear me in this video say, “Go for it. We should not back down.”

Another item, CMLS. They are a council of MLSs across the country. They put out a pretty good statement of some sort, rebuttal, that they filed in the MLS PIN, Nosalek case, and I thought it was interesting. They attacked some of the data that was used. They attacked some of the so-called experts that were used in the courtroom. Folks, I’m not looking for credit here, but who’s been picking apart the so-called experts? Dr. Schulman from Texas A&M. He got paid $1.7 million from Michael Ketchmark, his unit of Texas A&M, $1.7 million in his first bill, and he’s an expert? Did they tell the jury the guy’s division of whatever he does, this so-called economist, got paid $1.7 million? What about some of these other so-called experts that are clearly on Ketchmark’s side for selfish reasons? What about Steven Brobeck and the Consumer Federation of America?

You think they’re not going to get paid somehow in this? I’m not saying they’re paid so far. I have no knowledge of that. One thing I do know, one of the things Ketchmark’s done before, and it is something that’s done in class action cases. If the amount of money is so minuscule to the class plaintiffs, sometimes what’ll be done is a certain portion of the money will be donated to a fund. Ketchmark did this in a past case.

About $10 million went to some consumer group or something like that, and I’m sure that group is a nice one, and that’s probably a good thing to donate to. The point I’m getting at is some of these experts are doing this and kissing Ketchmark’s ass and being on his side. Why? Why are they doing that? They’re hoping for something in the future. Mark my words here today, somehow, someway, somewhere down the line, Ketchmark, when he gets his stack of money, remember, he originally filed for 69 million in legal fees, 22 of which go to his firm. They’re going to file for more, no question. They did that when the pot was 200 million. The pot’s at 700 now. It’s going to go to a billion dollars, I bet, by the time they’re done.

If people keep settling, companies keep settling, when they do that, at some point, there’s going to be a donation to the Consumer Federation of America, guaranteed. I can almost assure you, and when that happens, I’m going to do another video and I’m going to play this part just to show you all. There’s something going on there. Anyway, back to CMLS. They picked a part and they said a lot of these experts weren’t real experts. They were people that were in their corner. Those are things I’ve been saying in my videos all along.

One thing they also said, and I’ve pointed this out, they also say the DOJ’s proposal in itself is anti-competitive. This is not an “I told you so” moment, but have I been saying this? When the DOJ said, “Oh, realtors should, sellers should not only not be able to offer compensation, they should be prohibited from paying it.” How are you going to stop a homeowner or an owner of anything from offering or being willing to pay compensation? The things they’re doing are anti-competitive. The things they’re doing are risking the competitiveness. They’re hurting, the things the DOJ’s pushing for is decreasing the transparency in our business.

Think about it. Commissions are gone from MLS. That’s inevitable. You’re going to log in and not see it, right? Is that good? Everything’s on an uneven playing field. Things are going to be negotiated, not openly and transparently. Truth be told, buyer’s agents could have anyway. The majority of transactions, people were seeing what was posted, buyer’s agents, and they were accepting it. Credit to CMLS for doing that.

Another item I want to cover, March 31st, Berkshire Hathaway, the last one standing, I give them credit. I’ve never given my competitors so much positive talk and had their back as much as I do in these cases, but I give credit to Berkshire Hathaway and Mr. Warren Buffett, the legend himself, who’s at the top of the heap. They haven’t caved. They are fighting like dogs and I love it.

One of the things they put out in this recent motion that they filed, where they asked for a new trial. They said that the council exerted enormous effort to inject local prejudice into proceedings. They’re talking about Ketchmark, repeatedly and superficially referencing his own Missouri residence in naked attempts to indicate himself to the jury and unfairly prejudice the outsider defendants. He was screaming, “Where’s Bob Goldberg?” He’s talking about this beautiful court. He was making references to the Kansas City Chiefs. He’s handing waters to, “Oh, you’re thirsty. Here’s a water. Oh, you need a tissue. Here’s a tissue,” doing all of these things. You know what the truth is, folks?

There never should have been a jury. Most antitrust cases are heard in front of either a bench trial, in front of judges. That’s what would have happened, had they taken this to appeal. Two weeks ago, three weeks ago, I was a little more negative on NAR making this settlement. I have learned a lot more by reading and by talking to many. One of the things that I think we need to keep in mind is they were able to get over a million realtors coverage in this. They were able to save multiple MLSs.

One of the things that Ketchmark was doing, and this is what you do when you’re in a legal fight. He was suing more and more brokerages, making more and more threats to sue even more brokerages. There was talk and threats of suing realtors. In Texas, they sued some top teams. NAR felt they were under tremendous pressure. They felt they had to accept it. Do I love it? No, I don’t. I’m a fighter by nature. If they ever sued me or if they sued me and my company, I wouldn’t have settled anything on this case. I would have fought to the end.

Remember, there’s a difference between me and an association. There’s a difference between Berkshire Hathaway and an association. Association has to worry about multiple members, multiple owners, multiple MLSs. That’s what they did, and they did what they thought was best. Do I agree with every aspect of it? No. Have I been vocal to them about that? Yes. I’m not shy with any of them, okay? It is what it is, folks.

Stay tuned into my videos. I’ll be back within a few weeks with more information as things progress. If anything crazy happens in the meantime, I’ll be back to see you. In this situation, that could be soon. Thank you.

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