The
Consumer
Federation
of
America
(CFA)
and
its
former
CEO,
Steve
Brobeck,
have
a
long
history
of
advocating
for
policies
that
protect
consumers.
However,
in
recent
efforts
to
curb

real
estate
professionals,
the
CFA
has
seemingly
lost
sight
of
its
core
purpose:
advocating
for
those
most
in
need
of
consumer
protection.

Ending
broker
cooperative
compensation
unfairly
favors
wealthier
sellers
and
buyers.

Broker
cooperative
compensation,
in
which
the
seller’s
and
buyer’s

agents
split
the
seller’s
agent’s
commission,
has
been
a
standard
practice
nationwide
for
over
a
century.
This
practice
allows
homebuyers
to
choose
their
agents
without
incurring
out-of-pocket
costs
and
broadens
the
pool
of
potential
buyers,
benefiting
both
buyers
and
sellers.

CFA
has
stated
that
it
believes
the
payment
of
agent

commissions
should
be
“de-coupled,”
meaning
buyers
would
pay
their
agent
fees
independently
of
sellers.
Underpinning
this
approach
is
the
assumption
that
this
would
position
buyers
and
sellers
to
negotiate
commissions
better.
But
this
is
far
from
certain.

However,
a
much
more
likely
scenario
is
that
by
ending
broker
cooperative
compensation,
buyers
will
have
to
pay
for
agent
representation
out-of-pocket,
a
significant
expense
that
would
make
homeownership
out
of
reach
for
many
first-time
buyers.
Considering
that
homeownership
is
the
primary
wealth
source
for
most
middle-class
families,
any
change
in
housing
policy
that
negatively
affects

first-time
buyers
could
substantially
exacerbate
wealth
disparities
in
America. 

Changes
favor
older,
wealthier
individuals
over
new
generations.

CFA’s
proposed
changes
benefit
older,
wealthier
individuals
less
affected
by
paying
for
agent
representation.
In
contrast,
new
generations
and
first-time
homebuyers
who
rely
on
accessible
homeownership
pathways
could
find
these
changes
insurmountable.
This
shift
risks
excluding
a
new
generation
from
homeownership,
perpetuating
economic
inequality,
and
limiting
upward
mobility.

Benefits
to
the
rich
rarely
trickle
down.

Brobeck
and
CFA
have
no
clear
answer
for
how
eliminating
broker
compensation
will
benefit
first-time
homebuyers.
They
speculate
that
lower
seller
commissions
will
result
in
lower
home
prices,
but
these
assumptions
lack
crucial
details
of
how
this
would
play
out.
There
is
no
evidence
that
agent
commissions
influence
home

prices
one
way
or
the
other.
The
reality
is
far
more
complex.
Supply
and
demand
principles
are
much
more
influential
in
setting
home
prices,
and
sellers
will
almost
always
sell
to
the
highest
bidder.
The
belief
that
reducing
commissions
for
sellers
will
somehow
trickle
down
to
less
affluent
buyers
in
the
form
of
lower
home
prices
is
wishful
thinking.

CFA’s
position
risks
minority-led
homeownership
growth

CFA
and
its
political
allies
have
called
the
current
process
for
purchasing
a
home
“broken”
and
“anti-competitive,”
but
the
current
system,
with
all
its
imperfections,
created
a
75%
homeownership
rate
and
trillions
of
dollars
of
wealth
for
White
Americans,
far
greater
than
anywhere
else
in
the
world.
It
would
be
unfair
to
suggest
that
race
is
a
motivator
in
any
of
this,
but
it
would
be
equally
as
irresponsible
not
to
acknowledge
that
these
radical
changes
that
CFA
supports
are
gaining
traction
when,
for
the
first
time
in
U.S.
history,
the
majority
of
homeownership
growth
is
expected
to
come
from
minority
communities.
Now
is
not
the
time
to
experiment
with
unproven
and
potentially
damaging
theories.  

Proposed
changes
also
negatively
impact
small
businesses.

Unlike
many
other
economic
sectors,
housing
is
not
dominated
by
a
handful
of
behemoth
corporations;
it
is
primarily
served
by
hundreds
of
thousands
of
small
businesses
–
real
estate
brokerages,
mortgage
brokers,
home
inspectors,
and
settlement
services
providers
that,
in
many
cases,
have
been
in
families
for
generations.
One
of
the
possible
outcomes
of
CFA’s
proposed
changes
is
that
buyers
unable
to
pay
for
an
agent
will
attempt
to
go
without
representation,
exposing
themselves
to
a
slew
of
risks
and
negatively
impacting
small
businesses
across
the
country.

Well-intentioned
organizations
sometimes
make
mistakes.

CFA
has
not
adequately
considered
the
disparate
impact
on
minorities
and
low-wealth
consumers.
Homeownership
is
the
cornerstone
of
the
American
dream,
a
stabilizing
force,
and
a
gateway
to
the
middle
class.
Advocates
and
policymakers
must
carefully
consider
the
potential
impact
on
first-time
homebuyers,
especially
from
communities
of
color,
when
contemplating
major
housing
policies
and
industry
practices.
There
is
simply
too
much
at
stake
to
roll
the
dice
based
on
speculative
theories.

Gary
Acosta
is
the
Co-Founder
and
CEO
of
the
National
Association
of
Hispanic
Real
Estate
Professionals
(NAHREP).

Courtney
Johnson
Rose
is
the
President
of
the
National
Association
of
Real
Estate
Brokers
(NAREB).

Hope
Atuel
is
CEO
of
the
Asian
Real
Estate
Association
of
America
(AREAA).

Ryan
Weyandt
is
CEO
of
the
LGBTQ
Real
Estate
Alliance.

This
column
does
not
necessarily
reflect
the
opinion
of
HousingWire’s
editorial
department
and
its
owners.

To
contact
the
editor
responsible
for
this
piece:



[email protected]

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