DOJ Doesn’t Like the Settlement

Anthony Lamacchia: 

00:00
The ultimate grim reaper is back once again. Take a look at this, folks. The United States District Court, Western District of Missouri.

00:08
statement of interest of the United States. So the Department of Justice decided just last night, Sunday night, two days before there’s a hearing to approve the entire National Association of Realtors settlement in the Burnett case, they decided to file something saying they don’t like part of it. You know what’s amazing to me about this? This settlement was put out publicly March 15th, and they decide to wait until a day and a half before. My guess is they wanna make a little bit of noise right before it’s done,

00:38
many of them probably lose their jobs at the Department of Justice because there’s a lot of change coming there with a new administration naturally. Now…

00:47
Couple things to note, it’s Thanksgiving week, kind of interesting that they filed it when they did, but they’re picking on one specific area the most. They don’t like the proposal of the mandatory written buyer agreement, okay? Now I’m hearing that it was really the plaintiff’s attorney that kind of gave birth to that idea and NAR went along with it and I don’t…

01:08
think they’re wrong for that. I mean, let’s think about it. Is it a good idea to have a buyer agency or agreement or buyer contract? Yeah. I mean, I know as a broker, if my agents are getting those types of things signed, then they’re having a conversation with a buyer. Things tend to be more transparent, et cetera. Do I love the idea of a settlement being the cause for that to happen? Not really. And I said that in some earlier videos when the settlement came out. But…

01:37
By and large, I think there’s more pros than cons with the forcing of the written buyer agreement. However, they came out in this statement saying that they don’t like it. The proposed settlement includes a provision requiring buyers and their brokers enter, in quote, start a quote, a written agreement before the buyer tours any homes. This provision itself raises independent concerns under the antitrust laws, which could be addressed in multiple ways. The parties could, one, eliminate the provision, or two.

02:07
2. Disclaim that the settlement creates any immunity or defense under the antitrust laws. Alternatively, the court could clarify that approval of settlement affords no immunity or defense for the buyer agreement provision. So I mean…

02:26
The industry is essentially damned if we do, damned if we don’t, right? So on one hand, the settlement says, hey, use the buyer-broker agreement. On the other hand, the DOJ says, well, if that is approved in the settlement, that doesn’t provide you with immunity from us. Not to mention, two dozen states in the United States have made buyer-agency agreements mandatory. Now, obviously, there’s some gray area there, depending on state, of when it should get signed, should it be before showing.

02:56
even one home? Should it be, you know, at the point of showing, working with the buyer consistently from then on out? I mean, I don’t know, but I do know things are kind of confusing in the real estate space. Now, I do like one thing they said on page two, home ownership is a key component of the wealth of American households. Well, thank you for recognizing that. I do agree with that. They went on to make more comments.

03:24
about it. Let me go to this and then I’m going to go backwards. In addition, the new provision that requires buyers and brokers to make written agreements before home tours may harm buyers and limit how brokers compete for clients.

03:39
I don’t know of anything that limits the way we compete. There’s just constant competition in our space. It bears a close resemblance to prior restrictions among competitors that courts have found to violate antitrust laws in other proceedings and could limit rather than enhance. Some deep legal language there. I can’t say I really agree. They also, let’s see, DOJ says, they may seek greater relief

04:09
at issue here once again.

04:12
What are brokers to do? Okay, this just causes confusion in the marketplace, and I don’t think that it is helpful to anyone at all. Let me read this next part. Compliance with the proposed settlement or new NAR rules implementing that settlement affords no defense to any such enforcement actions. So they’re basically flexing their muscles to say, hey, you guys can make a settlement, but that doesn’t mean we can’t come after you. Again, damned if we do, damned if we don’t.

04:42
my mind but I guess the government agency they do have a right to stick their nose in.

04:49
So what does this all mean and what does this mean for all of us moving forward? Here’s what I think. Tomorrow on what’s what’s tomorrow November the twenty sixth at I think one thirty p.m. in western Missouri. This is going in front of Judge Bo. He has rubber stamped pretty much everything that has come before him that the plaintiffs attorneys have wanted. I mentioned that many times all the way back to the debate. I think this thing is getting approved. The Gibson case which is the national one.

05:19
They had about a 48, 49-minute hearing, and he approved that case about three weeks ago on October the 31st. Kind of funny, it was exactly one year since when the jury came down with the wrong verdict in the prior case. So for all my Realtor friends out there that are listening…

05:39
If I were in your shoes, follow the settlement, like I’ve been saying all along. I think this will get approved. I don’t think the DOJ is going to be able to get their wish and get the judge to destroy it, but we will find out tomorrow and I’ll be back. Thank you and good luck.

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