Jordan Barry, a professor at the University of Southern California, told a conference at the University of Minnesota on Friday that a provision in the NAR settlement that prohibits listing agents from providing compensation to buyers’ agents is “largely tokenistic.”
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A University of Southern California law professor said Friday that the National Association of Realtors’ recent commission lawsuit settlement is unlikely to lead to major changes, although he also said he would like to see more sweeping changes.
Jordan Barry
Jordan Barry was the first speaker at a virtual meeting Friday afternoon that delved into the impact of the March 15 settlement. In the settlement, NAR agreed to pay $418 million in damages and make a number of reforms. Friday’s meeting is titled “Will NAR Settlement End 6% Real Estate Commission?”
Barry began his comments with a blunt answer to the question: “Probably not much.”
Barry reasoned that the provision in the settlement agreement prohibiting the listing agent from providing compensation to the buyer’s agent was “largely symbolic.” The provision requires court approval before it becomes final.
“I don’t think it’s going to do much,” he said before showing off quotes from NAR President Kevin Sears and The Real Brokerage President Sharran Srivatsaa, who said listing brokers can and still will ultimately offer commissions to buyer’s agents.
“In the Internet age, there are other ways to get this information,” he added, referring to offering compensation.
Barry went on to argue that agents have a financial incentive to steer clients toward properties where sellers offer higher commissions, and that attempts to enforce anti-steering rules may be ineffective. Instead, he believes the market needs more “pressure” to create a “more competitive market.”
“A better idea seems to be to change the market structure,” he said.
Barry went on to suggest that in order to create a more competitive market and avoid commission-based bootstrapping, there needs to be a “disconnect” between what sellers offer and what buyers’ agents earn. In his speech, he explored different ways to achieve this, but noted that one possible option is “explicit decoupling.” Barry noted that the U.S. Department of Justice indicated a preference for this option in documents filed in connection with the ongoing Nosalek Commission litigation.
The University of Minnesota Law School hosts this conference in Minneapolis, which can be attended both in person and online. The event lasted several hours and included meetings with legal experts, real estate industry leaders and journalists.
Journalist Anna Bahney spoke at the event after Barry. Barney was one of two reporters reporting on March 15. wrote a story Announced that “the 6% commission for buying and selling houses has been eliminated.”
In comments Friday, Barney doubled down on defending the statement, saying that while it was criticized by industry members, consumers “loved” it.Her defense came shortly after Barry rebutted CNN’s argument, saying the settlement was, in fact, no It could bring about significant changes. Reporter Barney also provided proactive solutions for consumers, suggesting they shop around and choose not to pay high commissions.
“You have to shop around,” she said. “You want to talk to agents until you find one that will accept the price you’re willing to pay.”
The comments come against the backdrop of a heated debate over commissions, agent compensation and the growing number of commission lawsuits. The issue erupted in October, when a jury found that NAR and major franchisees conspired to keep costs high for consumers.
A number of large real estate companies have been named as defendants in various cases, many of which have also filed settlements of their own, including RE/MAX, Keller Williams and Anywhere, which has been embroiled in litigation since it changed its name to Reology.
Late in the event, one of the event organizers had trouble pronouncing the word “Realogy” correctly when introducing another speaker.
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