C.A.R. On the Hot Seat

On Monday I talked about the big brokerages coming together to sue NAR for the terrible job they did in looking out for our best interests.

Nothing else happened this week, but the CAR must have heard something:

“Every June, C.A.R. issues new and modified standard forms. This year, of the 67 new and revised forms to be released on June 25, there are 21 of them that are related to the changes in business practices required by the NAR settlement. I am writing to inform you that C.A.R. is postponing the release of those 21 forms.

C.A.R. is continuing to review not just the NAR settlement but also Department of Justice (DOJ) statements to the industry, as well as feedback from our members, and this decision is being made from an abundance of caution. C.A.R. has received a formal inquiry about these forms from the DOJ, and the organization requires additional time to consider the DOJ’s concerns.”

Being the author of our forms and contracts, The California Association of Realtors is at risk of being blamed for the conspiracy.

But this is America, so everything should be litigated for years. Buyers can probably quit worrying about having to pay their own realtor, because the market will flatten out just enough that sellers will be happy to pay a couple of points to make the deal.

Compelling Price Needed

Today, there are 488 NSDCC active listings, which is the most in almost four years!

This is what it feels like when actives are stacking up. The hot new listings still sell in the first week, but more and more don’t fit that description and only have to endure an occasional showing. Some sellers probably forget that their house is for sale!

But price will fix it!

We can break down the pricing into three categories:

Aspirational (at least 10% above value)

Attractive (within 3% to 5% of value)

Compelling (actual value or under)

For the rest of 2024, your price needs to be compelling to have a shot at selling. If it is compelling right from the beginning, then you have a good chance of selling right away. It won’t get better, later, and it feels like you are chasing the market when price reductions don’t impress anyone.

I saw this great quote this week about home sellers:

Don’t tell me your motivated, have your price tell me you’re motivated!

More Zillow Predictions

Zillow sent me two more areas:

Encinitas, 92024

Rancho Santa Fe, 92067

We are rolling into Flatline City, and we’ll be here the rest of the year. At least.

Expect that the 1Q25 market will be the best of that year too, just like in 2024.

The DOJ Showdown

Here we go!

This week, we’re going to find out more about the DOJ’s stance on home sellers paying commissions to the buyer-agents. Finally!

Everyone agrees that sellers can choose to pay NO commissions. Heck, you don’t have to hire an agent to sell your house – go stick a for-sale sign in your front yard and see what happens.

But sellers should not be prevented from paying an incentive if they believe that is what’s best for them, and that it will get them what they want.

This is where NAR has failed miserably, and the big brokerages have no other choice but fight for what’s right. It’s anti-American to forbid people from spending their money however they want – especially when commissions have always been negotiable.

The DOJ has said that they want commissions to be ‘decoupled’. If they force home buyers to pay for their own agent, how much will be comfortable? Maybe one-half percent? Or maybe 1%? The job is too tough and it takes too long to work for 1%. Good agents won’t do it, and it will force buyers to go direct to the listing agent instead.

Unrepresented buyers will be the worst thing that ever happened to home sales. But nobody sees it coming, and by the time it becomes obvious, it will be too late.

Hopefully somebody will intervene with an auction format instead!

Brokerages vs. NAR

Our president of the western United States was at our regional sales meeting on Friday. At the end, he announced that Compass has joined with all of the other brokerages who were identified in the NAR settlement as having over $2 billion in sales volume – a group that employs so many agents that it makes up 86% of the total NAR dues.

They have all hired the same law firm, and they are going after NAR. I think it means that the settlement that forced the big brokerages to pay $400 million will get litigated, and hopefully the lawsuit will get appealed too.

Hopefully, it isn’t just a delay tactic. The lawsuit should get appealed because the defense put on by NAR was pathetic and very arrogant – it was like they thought that they just had to show up to pick up their automatic win.

I don’t think any agent will mind if the buyer-agent commission isn’t required to be inputted into the MLS – we will live with that. We’ll probably live with having a required written contract with our buyers too.

But sellers should have the right to incentivize the buyer-agents. Because the DOJ won’t come out and state that clearly – they only hint at it – we will be living in purgatory until someone forces the issue. The brokerages should help defend the practice, and see it through to the end.

Some sellers may not agree with me now, but the market slowdown is coming and you will want additional tools to help sell your house in the very near future. If you don’t want to offer an incentive to buyer-agents, no problem.

Also mentioned on Friday is that they are going after the Clear Cooperation Policy too – the NAR mandate that a listing must be inputted into the MLS within one business day after any public marketing. We’ve come to live with that policy too, but I think it shows that they are bringing all the firepower to destroy the National Association of Realtors and build anew.

The president didn’t say anything about this being quiet, so I would think that there should be an announcement any day now. If this blog post disappears, then it might be a while?

Inventory Watch

June is half over, and there have been 74 NSDCC closings so we might get close to last month’s total of 185 sales – though it feels like the market could fade away the rest of the year.

Will sellers adjust?

Probably not – or at least not adjust fast enough. But they might get lucky if the new listings slow down, and leave the OPTs (over-priced turkeys) as the only choice for those buyers who really want to get something done this summer.

Will buyers make low offers?

Sellers can’t count on that, so the likelihood of a summer standoff is pretty good, especially over the next 30 days. No one will panic – heck, summer just started!

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