The following Q&A comes from the HW+ exclusive Slack channel, where HousingWire Senior Real Estate Reporter Matthew Blake answered questions about his latest coverage on the impact of the DOJ’s decision and how the industry is gearing up to respond. During the Q&A, Blake discussed the ramifications of previous DOJ investigations into NAR and conversations he has had with top-level agents on how they’re feeling about this news.
The following Q&A has been lightly edited for length and clarity.
HousingWire: To start, the Department of Justice allowing itself to pursue a broader investigation into the NAR is a high-level, brewing conflict. How, if at all, does it practically affect agents?
Mathew Blake: This is not an obscure, legal matter. The DOJ repeatedly said in withdrawing from its consent decree with the Realtor’s trade group that it is looking at commissions. Many scholars and antitrust lawyers, but not many agents, say U.S. real estate commissions are artificially inflated by an illegal horizontal conspiracy between NAR and brokerages. So, if DOJ were to believe that, they would be pursuing ways to lower commissions for consumers.
In other words, it could affect the very economic model we know for agents — which is that they are independent contractors who make a living on commissions that can be 3% each of a total home purchase price
HousingWire: Interesting insight. To build on that, would you consider NAR to be a monopoly?
Mathew Blake: I’m not a lawyer so I don’t know, but the lay understanding of monopoly is dominance of one field, and NAR is certainly the dominant trade group for agents. But more than just representing labor, they also represent management (brokerages) and claim to work in the best interests of consumers. So, they have an outsized role in the American real estate market, and, I would say, a unique one among trade groups. The question, though, for antitrust purposes is whether they are a monopoly causing harm to consumers and that’s where you get into full-throated arguments