Are buyer agents going away? Some think so, and some not. In this episode, we navigate the intricate maze of the antitrust lawsuits filed against the National Association of Realtors. In this journey, we promise you'll come away with a comprehensive understanding of the complexities of these lawsuits and their potential ripple effects on the real estate industry. Part of our discussion will reveal the controversies surrounding the buyer's agent commission and its lack of disclosure to sellers, all within the context of the Sherman Antitrust Act.
As the plot thickens, we'll ponder the emerging trend of buyers taking the home search into their own hands. Could this signal a significant shift in commissions from the seller's agent to the buyer's agent, or even the phasing out of the buyer's agent entirely? We'll dissect the necessary changes this would impose on the Multiple Listing Service (MLS), and how this could shake up the market. Pulling the curtain back further, we'll debate the merits and drawbacks of employing an attorney who charges a flat fee. So, ready to unlock the mysteries of these landmark lawsuits and their potential implications for the home inspection estate industry? Then listen in!
Check out our home inspection app at www.inspectortoolbelt.com
Need a home inspection website? See samples of our website at www.inspectortoolbelt.com/home-inspection-websites
*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.
Are buyer agents going away? Some think so, and some not. In this episode, we navigate the intricate maze of the antitrust lawsuits filed against the National Association of Realtors. In this journey, we promise you'll come away with a comprehensive understanding of the complexities of these lawsuits and their potential ripple effects on the real estate industry. Part of our discussion will reveal the controversies surrounding the buyer's agent commission and its lack of disclosure to sellers, all within the context of the Sherman Antitrust Act.
As the plot thickens, we'll ponder the emerging trend of buyers taking the home search into their own hands. Could this signal a significant shift in commissions from the seller's agent to the buyer's agent, or even the phasing out of the buyer's agent entirely? We'll dissect the necessary changes this would impose on the Multiple Listing Service (MLS), and how this could shake up the market. Pulling the curtain back further, we'll debate the merits and drawbacks of employing an attorney who charges a flat fee. So, ready to unlock the mysteries of these landmark lawsuits and their potential implications for the home inspection estate industry? Then listen in!
Check out our home inspection app at www.inspectortoolbelt.com
Need a home inspection website? See samples of our website at www.inspectortoolbelt.com/home-inspection-websites
*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.
Ian Robertson
You know, it's always going to be a special episode when Beon is on with us. Hey, Beon. How are you?
Beon DeNood
Aww.. Hey, doing good. How are you, Ian?
Ian Robertson
Hey, not bad. I really appreciate you being on, the original ITB duo.
Beon DeNood
Yeah, I must say every episode I listen to, you've, you've really taken this next level, you're doing pretty good. So I appreciate it.
Ian Robertson
Oh, thanks. Yeah. I mean, it's a ton of fun. I love the podcast, I forget, we had a third party estimate it, somewhere over 2000 downloads a week, sometimes more. And I'm pretty proud of it. But you know, you've been here since the beginning. I mean, you're half of Inspector Toolbelt.
Beon DeNood
That is true.
Ian Robertson
Yeah, you're the functioning half.
Beon DeNood
As opposed to the dysfunctional half.
Ian Robertson
I push the buttons, but you make the buttons.
Beon DeNood
Yeah, no, it's great. And I must say some of the recent episodes, even hearing some of the more senior voices in the industry. It's really great to be able to have have them here on the show. So yeah, well done.
Ian Robertson
Man, we have some of the best guests. It's just, you know, one of our guests, Jay Wynn, he said, it's amazing listening to these guys talk because this is 20, 30, 40, 50 years of experience hitting your head against the wall, figuring it out. And then we get to just sit here and say, Oh, there's the answer. And I learn something from all of our guests. Like, I'm like, man, how have I not figured that out in 19 years of inspecting? How did you do that? That's awesome.
Beon DeNood
No, it's true. All these like, big wisdom and truth bombs. They drop all the time. So yeah, it's great, great value to add.
Ian Robertson
But you know, I wanted to talk about this subject today. And I sent you this information, because this is a topic that's being talked about in the forums among home inspectors, and it's that antitrust lawsuit, it's actually technically two lawsuits going after the National Association of REALTORS, NAR. And basically, we as home inspectors are like, Yay, we'll finally kill the real estate industry that's been around since technically 1913. It's been the same industry since then. And we're like finally going to change. And then some people are like, I don't see the difference. So it's a big case, though. You've looked it over yourself, right?
Beon DeNood
Yeah, to be honest, when you've supported me the link, and we first spoke about it was kind of a new topic for me. So I don't know, for anybody listening, if it's a newer topic to you, maybe I can explain how I understand it. And then you can, you can correct me. But basically, from what I understand is, when a seller enters into a contract with an agent to be able to sell their home, they agreed to a percentage, which goes to the agent, you know, so I guess the number that usually gets floated out there is like a 6%, it's a pretty standard, you know, fee that goes. And then that agent uses those funds to, you know, do whatever they got to do to sell that house, to market the property and you know, whatever is left at the end of the day is obviously, profit for them. But I guess the issue has come up now, where part of that 6%, the selling agent is paying a commission to the buyer's agent as well, which typically is like a, I guess, maybe a 50/50, split like 3%, or whatever they end up negotiating. But the issue seems to be coming in is that that isn't necessarily disclosed to the seller, that that's how that you know, what portion is going to go to the buyer's agent. And it seems like this is a lawsuit that's gotten together, where a bunch of sellers have formed this class action suit to say, hey, you know, this wasn't disclosed to us. We're basically paying the buyer's agent, this commission out of what we paying you and we don't we don't think that's fair or whatever. Am I kind of more or less on track?
Ian Robertson
Yeah, that's basically it, the lawsuit is basically an antitrust lawsuit. So the Sherman Antitrust Act, which, you know, goes back to Roosevelt, is it Sherman? Yeah, Sherman Antitrust Act. It goes back to Roosevelt when he broke up the, you know, railroad monopoly, that was one of the first actions of the Antitrust Act was okay. Let's just get rid of the monopoly. And interestingly, that kind of complex later on. So basically, anytime there's a monopoly that stifles competition and consolidates a market to a monopoly degree, then they step in but yeah, that's basically the the assertion that these companies and the MLSs require, a lot of them I should say, require the seller's agent to pay the buyer's agent commission, it's a requirement. So if they want to list on the MLS, it has to happen that way. So basically, the answer is that stifles all competition and creates basically price fixing, you know, and there's a lot of room for shady acts, when it comes to that arrangement. So for instance, we hired an agent for a property one time, we negotiated a 5.5% interest. So what that agent did..
Beon DeNood
Or commission, 5.5 Commission.
Ian Robertson
Commission, commission, What did I say?
Beon DeNood
Interest.
Ian Robertson
Interest? Yeah, that's what I'm talking about
Beon DeNood
5.5 interest. That's a goldmine right now. Right?
Ian Robertson
See I got interest rates on my head. You know, we're not talking about that today we're talking, we're talking about commission rates. So she actually took that commission, and instead of splitting it 50/50, with the buyer's agent, she took 3.5% and offered 2% to the buyer. And then basically, just kind of the property didn't sell because everyone's like, we're not that's, 2% interest, or 2% Commission, there it is, again, so we're gonna go find a different property. And then she basically squeezed out of us that extra half a percent, which finally went to, went to the buyer's agent, the buyer's agent. So it gets squirrely, I went to a seminar one time I set up a booth. And this real estate, big time real estate agent, real estate coach from Canada came down. And my booth was basically handing out tchotchkes with my logo on it and you know, candy, or whatever. So I'm standing in the back listening to this thing. And his whole stick could be wrapped up into if we make our commissions higher, we can sell more houses. So he's like, okay, let's make our commission 7%, offer three and a half percent to the buyer, buyer's agent. Now, all the buyer's agents are coming after our house. And we have more buyers, we advertise that we're busier. And, you know, we make more money, and the buyer's agent makes more money. That's price fixing in my mind. I remember sitting there I'm like, this is nuts.
Beon DeNood
Yeah, because then basically the buyer's agents are looking around at properties. And maybe not necessarily looking at, you know, not to speak for agents. But I'm just saying that it could play out this way. Where you, where you're looking at your your buyer, or your, your client, he's looking to buy a house, and you just trying to match them with properties that have higher commissions attached to them, as opposed to, you know, maybe other factors. So I mean, yeah, that's not a great situation. But you know, one interesting thing, because an argument, I guess, that's being brought on by, you know, brokers and agents who are in the industry is that for sellers to have an issue with how, basically, you've agreed to pay this commission 6%, and it's up to me, the argument they're making is, it's up to me to use that however I want. And to get your house sold, I need to offer a good portion of this to the buyer. Otherwise, guess what the market for your house like dries up those opportunities, because buyer's agents are not going to be pushing that property in front of their clients. So some of the argument is like, well, it's a cost of doing business. If, if you want to sell your house, you got to gotta have a commission. So I don't know if that practice maybe will necessarily change. I'm not sure unless this new legislation, but maybe like, it'll be more transparent, that, you know, it'll be disclosed. And I don't know what effect that'll have. I'm not sure.
Ian Robertson
Yeah. And you know, it's funny, because, like me, and you, we've bought and sold property, we kind of get it, most of our listeners get it, the average person actually doesn't. And I've had clients tell me, my agent is giving these people part of the money. And they don't understand it, because they're just finding out about it. They don't read the agreements and the agreements. I pour over these things. Some of them just don't make it overly clear. And there are laws, but I guess it comes down to incentivizing. So you incentivize this industry to continue this way. It's the same system has been around since 1913. So the book brokers argument is, but this is the system, the antitrust lawsuit is the system is broken. And we don't like that system. Because it does incentivize an agent to find also pricier houses, higher commission. I'm not saying that all agents are going to do that. But I have seen instances where agents are like, I don't care what the commission is, I try not to look, I go and find the house. Cool, but it incentivizes not so honest agents. I've seen some get upset and be like, I washed my hands of this. I'm only getting 2% Commission, they're not getting this much work out of me. So it incentivizes certain agents. And let's be honest, maybe more or less to go after the higher dollar, that's us by human nature. We're going to pick the apple tree with more apples on it than the one with less. That's just what we do with how we're built, but it is interesting. So the lawsuit, the two lawsuits at Sitzer/Burnett and Moehrl so these two lawsuits include the National Association of REALTORS, NAR, Keller Williams, Re/Max, Home Services of America and its subsidiaries, subsidiaries and also Anywhere, which I did not know this before, but Anywhere is the parent company of Sotheby's, Coldwell Banker, and Century 21. I didn't actually know that Century 21 and Coldwell Banker were and Sotheby's were related quite like that.
Beon DeNood
No, I didn't either.
Ian Robertson
So I guess you could kind of understand the perception of a little bit of collusion here. I mean, that represents a giant portion of the real estate market, those companies.
Beon DeNood
Yeah. And what makes it more interesting and spicy. I guess that's why a lot of people are talking about it. Is the fact that is it I think RE/MAX and Anywhere have just settled?
Ian Robertson
Yep.
Beon DeNood
So it was like $83 million settlement, I think between the two of them.
Ian Robertson
Actually 83 million just for Anywhere. And RE/MAX was 55 million. So put together well over $100 million.
Beon DeNood
Yeah, so they settled just to have their names withdrawn from the suit. So I mean, okay, people settle all the time, for whatever reasons, but as part of that settlement agreement, it was like, they will change their policies going forward. There's no like details on what that is going to be. But that's I guess the big question mark right now is, so if these if these giants already settled, I guess NAR is saying no ways. We're not settling. We're taking this to court. So I guess we'll see what happens there. But I think that's what got it's gotten everybody's attention because a lot of people expected those to kind of just go nowhere, like previous and now you got these big guys settling. And I think there's some some question marks raised about that.
Ian Robertson
Yeah, here's my thing, though. It's not like okay, let's sue NAR. NAR is one of the most powerful organizations, political and financially otherwise in the country. Yeah. So the economy, one of the major pillars, and you can correct me on this, Beon, isn't there like five pillars to the economy? But whatever it happens to be real estate is, is one of the major pillars.
Beon DeNood
Not sure.
Ian Robertson
Yeah, I'm not sure either. All I know is that it's also used as one of the markers of a recession, the market, the whole the real estate market, the whole thing. And every transaction besides private transactions, NAR has a piece of and has to be a private transaction with no mortgage. And you know, you get your own private homeowners insurance because NAR is part of all of it. So it it really, and it's just one association, the only other real association, I say real, it's not real yet. IREP which Nick Gromicko is working on but you know, we haven't really seen anything from that yet. So NARS just sitting there all alone, no competition, saying this is what we do. And this is what will happen. So what happens if you kind of tick off NAR you know, this Antitrust Act, the Sherman Antitrust Act, it's a big deal. It's been used as a hammer against organizations like NAR for a long time. But they don't go down easy.
Beon DeNood
Right. And the other lawsuit is actually interesting because that lawsuit I guess is between some alternative listing like groups like think one of them was called there was, TAN, I remember that. And then there was another another group that basically created a listing service that would you know, rival the MLS, obviously the MLS is huge, and you're not going to be able to rival them for a long time, no matter who starts out but I guess NAR referred to these as pocketed listings that were not part of the MLS. And as part of their policy, they updated that anybody who's a realtor in other words, you are a member of NAR's Association. You are not allowed to sell anything, get involved in any real estate transactions, with pocketed listings, anything that is not in the MLS, if you want to touch a property, sell it, buy it, do whatever, you have to be, it has to be in the MLS, and I guess these independent listing organizations Rex, Rex was the one REX and TAN I think.
Ian Robertson
Who names these things? Rex?
Beon DeNood
REX and TAN is after NAR and..
Ian Robertson
Sounds like an episode of The Red Green show or something.
Beon DeNood
It does, right? It sounds like wow, but yeah, REX is in Texas, I believe. And TAN is in California, but they are now suing them to say yeah, you can't do that under antitrust law. Because basically like you're explaining, you have a monopoly, you're dictating how the majority of the real estate market can can touch these listings or not. And most, you know, real estate agents, let's face it, are Realtors, are members of the association. So it'll be interesting to keep our eye on that one too, because that one was rejected in a lower court, went to a higher appeals court and now the Department of Justice is involved as well. So if that gains traction, it may start a new trend where you see listings alternative to the MLS where members of NAR are able to also sell those listings according to law and these two together, I guess kind of opens a bit more opportunity. But obviously we a long ways from probably seeing any sort of real impact just because of the size, like you mentioned of NAR and the whole MLS.
Ian Robertson
Yeah, you know, it's funny that you mentioned the pocket listings because when talk first went through the industry of pocket listings, everybody's like, man, they're evil. It was like a propaganda film that agents were being shown. They're all talking about how pocket listings are evil pocket listings are evil, and then you actually talk about it and you're like, wait a minute, so you're forcing me to use your service. So no one who ever uses a real estate, you know, realtor will ever buy or sell my home. This is insane. That's that's collusion. That's yeah, I mean, that's basically the foundation of the antitrust law. That lawsuit is a little bit more clear cut than this one. But I do think as much as NAR is going to fight it, there's a reason why RE/MAX and Anywhere backed out with all that money. You don't throw a hundred and, I forget the math now, 140 million, 130 million out the window, just feel, this is kind of a lot of trouble. I think they see a sinking ship with this lawsuit. But let's talk about what this means for home inspectors, because home inspectors are all saying, well, here's just some of the comments. No more buyer's agents. Some are thinking, Well, no. How about no more sellers agents? Or how about we go to, man, I have a lot of realtor friends. I've said this before, though, so that they know here in New York, real estate agent, you know, the attorney does most of the work because they do the closings, then you have a mortgage or then you have an appraiser. So closing the deal, signing the deal, getting money for the deal, finding out how much the house is worth and a home inspector finding out that house functions. Basically real estate agents just become finding and opening doors. And a lot of ways they negotiate. And there's agents that really earn the commission. So I don't mean to make it sound like that. But it's becoming slowly over time, less like it was in 1913. I mean, what else do we keep around that's the same since 1913. We don't drive cars the same way, we don't have, I mean, nothing is the same since 1913. It's over 110 years ago. So I do think it's up for a shake up. But I don't think these two lawsuits are going to break that industry.
Beon DeNood
Now, you just made me think of something interesting, because it's interesting that even within the real estate community, like the community of real estate agents, there is a degree of irritation about this phenomenon, because you put the commission out there, you know, this property, we're paying 3%, to the buyer's agent, and all that that agent has to do many times is is show up with a buyer and connect the dots. And even within the industry, people who are true practitioners of real estate, they like serious agents, they really want the best for their clients. They're getting irritated by these guys who are newly minted agents, show up in flip flops, and you know, just kind of sign paper and off they go and 3% is theirs, you know, and from the consumer, from the buyer's perspective, it's also not great, because your agent could do nothing for you really looking out for your interest. As long as the deal is closed, they get their money. And I think maybe that is adding to a little bit of the fuel to the fire here from the seller perspective, because you think about yourself as a seller, you hear, you're selling your property, you've agreed to pay 6% to your agent, you trust they're gonna do their job. This guy shows up, a buyer's agent gives you a super hard time, you having to slash prices, whatever. And then after the fact you find out that, hey, you actually paid them through, you know, a whole chunk. No, I mean, let's say like the average house right now, I believe the average selling price, believe it or not, is north of $410,000.
Ian Robertson
Yeah, it's nuts.
Beon DeNood
So I mean, you're looking at 3% That's what looks like six grand, is it? Or is my math wrong?
Ian Robertson
Well, 3% of 100,000 would be 3000. So that would be 12 Grand.
Beon DeNood
Okay, 12, Sorry. Yeah, I thought 12 And that was dividing it by two. But yeah, that is already half right. 3%, $12,000 you paying this person. So, you know, I think the whole thing just doesn't sit right by them. And that's maybe why you see this, this lawsuit going on. But I guess the answer, the question I'm left with is okay. So what is the next step? You know, you can't just eliminate buyer's agents. And if you eliminate these incentives, some countries like Australia, for example, like buyer's agents aren't paid commissions, they paid a flat fee for their service that they they render, but I don't know if we'll ever see the industry here going towards a model like that. I don't know. What do you think?
Ian Robertson
Well I mean, so here's the thing, Agents will also make the argument, yeah, but I drove that buyer to 30 houses, I did 14 comp analysis is I've you know, I've prospected I've done all this so that 12 grand isn't a lot, but I make the argument that okay, and then they have to split it with their office and most agents are going to get a half, half that commission. So you actually only get a quarter of the commission if you do half of the buyer's agent, half of the sellers agent, then you do half with your broker, you get half if that's how it goes. And then you get six grand, but my argument back is all you're saying is that you spun your wheels really hard in the broken part of this industry. So you should get paid for that. Because now if I want to look at a piece of property, I look at Zillow or a couple of other websites and I have some alerts set up and I send an agent all these listings and say I want to see these, can you make a appointments, they make appointments through showing time, which is a whole other discussion. And then they let me in. That's it. So, I think Australia has it right in my opinion, this is all just my opinion. You need the listing agent, the listing agent is gonna go in there like, Okay, listen, you gotta fix this driveway, you have to do this. Here's how to write up a contract. You know, this offers too low, this offers like, they're going to be doing things. Buyer's agent, I think give them a flat fee and open me some doors. And then once I get there, okay, now we have a contract. What do we do? You know, there's gonna be disadvantages, though. Because now the buyer's agent or the buyer rather, doesn't have solid representation. Yeah. Okay. So now this person isn't making six grand or 12 grand. And so they're not as incentivized to represent you. But they're also not as incentivized to not represent you. Because they're like, Man, I don't want to show them another 30 houses, I get 12 grand out of this, you know, why would I let this deal die, even if it's bad for my client in the back of their mind, if tired and fed up with this client might not fight so hard for their interest. So it really is a squirrely place to be in. But there are services out there that have been building for years. One, you basically click on a house and somebody will show up for I forget what it was like could be way off. But 50, $75 They open the door stand there with you, you have up to 45 minutes to look at the house and then you drive away. And that's what that person does all day, they just drive around and let people in and that it's kind of like a real estate Uber thing, you know, they kind of record your visit to make sure you're not stealing anything. And I'm like, okay, that's 90% of what real estate is, is on the buyer side. But so let's say hypothetically though, this antitrust lawsuit ends exactly the way we as home inspectors want. I would personally love for the industry to change, marketing to agents, I've always hated. I hate the whole, well, if you want more, work for me. And then I have to say, well, I don't care. And then, you know, even if you don't care in the back of your mind, you're like, okay, they sent me 30 inspections last year, that stinks. And they're gonna talk and it's like, I hate working that whole system. But what do you think, Beon, if buyer's agents do go away? If they win? What does that mean for home inspectors? How would they get their work? Who would they market to? What would happen do you think?
Beon DeNood
I'll play along, I don't think buyer's agents will disappear. I think they they're needed in the industry, from the point of view of the consumer. But if they were to disappear, disappear, like your marketing strategy, because now you're not marketing to somebody who's gonna give you 30 deals in a year, you marketing direct to consumer, and that immediately is much more fragmented, you have to cast a much wider net, it's a lot more expensive. So I don't know from my from where I'm looking that that would be I mean, okay, you're not dealing with somebody who can blackball you and you know, all sudden you lose 30, lose 30 deals, but at the same time, you having to pick up each consumer directly. So to me, that is more challenging, but that's just my uneducated opinion.
Ian Robertson
So here's the thing, I have two aspects to that. And I agree with your point, I don't think buyer's agents are going to go away. And if they do, they're not going down without a fight, NAR is going to fight the whole way down. Here's the thing, though, the book has to be passed to someone. There's a lot of organizations out there right now, that would love to be your go-to-guy to schedule cheap home inspectors. So if we go to the model where there's no buyer's agent and there's services instead, where the agents open those doors, at the same time, they're going to do the same thing for home inspections. Because here's the here's the thing for the listing agent, the listing agent has very little liability in a transaction, unless they misrepresent the house and lie. Once the house is gone, it's caveat emptor. In most areas of the country, caveat emptor being buyer beware, sold the house, we didn't lie, told you what we knew, house is a turd on wheels, you have to deal with it. So unless the agent does something shady, they usually have very little liability. So the problem with no buyer's agent is now they have no shared liability, what little liability is left? They don't have a buyer's agent there to say, Well, what did your agent say, now they are the agent in the deal, even if they don't represent the buyer. So they're going to want to make sure that every transaction goes okay, make sure you get an appraiser, make sure you have a good home inspection, all that stuff, maybe attorneys did negotiations, whatever. But ultimately, I mean, the sellers agents really gonna want to cover their butts. So they're gonna want to make sure that happens. So I don't think it's going to reduce the amount of actual inspections. And I don't think it's going to make it skyrocket. I think it's going to be about the same. But I don't think that we're going to do a lot of direct to consumer advertising, I think at first if it happened post apocalyptic, we'd be like, Yeah, we're gonna be like Mad Maxing it. You know, riding the wave, everybody who has a great online presence, you're gonna be killing it. If you have lots of reviews, great SEO. You're going to be the guy that everybody's going to find right away. But eventually as time goes on, it's going to consolidate and to really unfortunately, like Inspectify type models, like we've talked about them on the show, they're gonna give you $250 to go and inspect the house and they take whatever their cut is, and they're just going to sweep in. So ironically, I think it's bad for the as much as I'd love to see it go. I think it's bad for the industry, that the buyer's agent, our industry as home inspectors that the buyer's agent goes away. I'd rather be sick to my stomach with agents than have to, you know, get paid $250 by a consolidated market of unspecified type businesses.
Beon DeNood
Yeah, I would agree with you. 100%. Yeah, that would there would be a harder model. And the reason why I say that I don't see the buyer's agent disappearing, is I believe that that will be consumer driven. People who are buying a house, especially for the first time, they are not confident enough to just go it alone. Yeah, nowadays, it's easy enough to find a home. I mean, if you can do a Google search, you know, you can get out there and find and most people actually, that's what's happening. Now the trend is that most people show up to a buyer's agent say, Hey, I got this house that I really want to look at, or, you know, we're interested. It's not a case, like in the old days, Hey, mister real estate agent guy, I want you to find me a house. In this neighborhood. It's like, consumers do that themselves. But to actually close the deal. And do all I mean, mostly like, I don't know, I need an agent to do that. So some of the talk, I guess, is okay, so then does that commission gets shifted or that whatever the buyer's agent get paid, gets paid? Does that burden then shift from the seller's agent and from the seller to the buyer? That's one of the questions being asked. And if that is the case, how is that going to be done, because you're already dealing with quite a suppressed buyer's market. And now you'd be layering even more fees, at least visually, because it's going to be declared and part of your bill now that you're going to either have to put a percentage or a few grand or whatever, it ends up being on top of it, I think it will be a tough thing to swallow for buyers. But ultimately, I feel that that would be almost a more positive move. Because now as a buyer, you are making an informed choice about who you want to render the service, I want a buyer's agent to represent me, and I will pay them X amount, you know, it's kind of like going to buy a new car. And you know, you've got you know, Honest Jon's on the corner that's got all these shady cars. And then you got, you know, the amazing dealer with all the good reviews in town that are more expensive, but you're going to have a good car. So then it's almost like your consumer is now making the choice as far as what kind of service do I want? Am I just getting a buyer's agent who will do the paperwork for me and I pay them a flat fee? Or am I wanting somebody to really represent me and and they want a percentage? And I'm willing to pay them that because I want to make sure the deal is ironclad. That's what I see as a good model. But I don't know if there's some holes in that.
Ian Robertson
No, I can see what you're saying. And there's some validity to that, there has to be some kind of standardization, though. Because then how do you go about selling the home when you look at it from the seller side, if everybody's doing something different to buy the home and to get people in there. So in this case, if that happened, and there was no buyer's agent, as we know it, now, the MLS would have to change, there'll be a lot less Realtors, MLSs is would have a lot less people in them. So they'd have less money, and the MLS would have to change how they do things and make it more public. Because right now it's a super secret thing that you have to pay to get into. And you have to be licensed. And no, no, no, you can't see this information that would have to change, I guess maybe in my mind it's a little bit more simplistic. And it's probably not that in real life. But so if I find a house and I'm like, Okay, well, New York State requires an attorney to be in the transaction. Can I just go to the attorney, and then he can do that. And he could even have like paralegals, look it over ahead of time. Does this look like a good deal for them? Can you do a couple quick comps? And then off you go, because I mean, it's not rocket science, you know, it's a 75 hour course here in New York to become an agent, send the paralegal, I think that would be a good system. Because then you're just shopping for cars, and then you bring it to your mechanic to make sure it's okay. It's kind of what it comes down to, to me, but I could be very, very wrong.
Beon DeNood
It may be more like going to your car sales, you know, going to find a car and then you get the finance guy to give you an opinion on the car, I guess I don't know.
Ian Robertson
Well, attorneys, they take a flat rate.
Beon DeNood
That's true.
Ian Robertson
I mean, most markets it's like 500 bucks to $1,500. And they only get paid if the deal goes through and then they get partial pay if they don't if it doesn't go through or however your particular area works. And all that kind of seems like a good good deal to me. But shifting completely to the expense of the buyer side, I think is going to be catastrophic.
Beon DeNood
I agree.
Ian Robertson
So if I'm a buyer, like you said earlier, it's already kind of a weird market. So buying a $400,000 house as your first home is just nuts to think about so now I'm already strapped for cash. And you want me to start dumping money in? Well, this house didn't work out, there's $400, here's 150, there's another 700. You know, it gets to the point where there's gonna be an outcry from buyers. And then the sellers agents are gonna be like, you killed the people that would bring us customers that would facilitate the whole thing. Because seller's agents, it's here I am. Buyer's agents are actually making the waters flow of people. So it's sticky, right?
Beon DeNood
Yeah, you got your market makers, right. So you have to have somebody on both ends of the transaction in the same volume. Otherwise, you stall one way or the other. So yeah, it is very delicate. And I think talking through it like this helps, at least even anyone listening to see that there isn't any clear path. It's not like, you know, yay, we won. It's nothing like that. It's, it's going to be a journey. I guess we'll see what changes policy wise, what disclosures are made, to be honest, like looking at this thing as realistically as possible, what will probably happen when you think of these companies who have settled down as saying that, you know, they're going to change policies, they probably all that they mean, is there going to be a few more lines in that contract that is now going to disclose what is being paid to the buyer's agent. And that'll be transparent. I think that's as far as they're going to go on this. And with that being the case, it's like, oh, okay, so now your consumer is a bit more aware of how the pie gets sliced up. But for most people, it's not going to make any difference. A buyer wants that house and it costs the same. It's just now I can see the breakdown. For a seller. It's like, well, I don't like that. Okay, well, let's reduce it and see how you go after a few months of not getting any, any views, they're going to be more willing to up their commission rate going to the buyer to get some more traffic. So you know, ultimately, I don't think it's going to change the industry as much as what many people are thinking, unless there's some massive like, legislation drop, but I just don't see that really happening, not soon.
Ian Robertson
Yeah. And that's the thing, I think you really hit the nail on the head. And that's actually what RE/MAX and Anywhere basically did. They said, Okay, we won't make it a requirement. Now it's optional. But so now it's like, okay, so if I put my house on the market with no commission to the buyer's agent.
Beon DeNood
Yeah, let's see how you do.
Ian Robertson
Let's see how you do. So now, I still have to pay the buyer's agent's commission, because that's how the market works. But it's not required. But it's like, if you want to sell your like, it's not required to put gas in your car. But if you want to drive, you're gonna want some gas. So again, I think you're very right, I do think that there will be some changes, but nothing that's actually going to affect us as home inspectors, one of the changes I think that's going to happen is I think they are going to break the MLS, the MLS is antitrust 101 in my opinion. And I think they are going to break it to make it accessible to the masses. If you control this much of the market, you have to make it accessible to the average person or accessible to other parts of the market and showing time. Because now if you are a buyer without an agent, you can't look at the MLS, you can't schedule, you know, showings or anything. And if you're a FSBO, for sale by owner, is the same thing you can't list on the MLS, they have to open that up, in my opinion. And I think that's part of what they're trying to do, I think they're going to crack the MLS.
Beon DeNood
Yeah, that's, that's interesting to think about. And at the very least, it'll enable other listings that all realtors will be able to sell just as well as stuff on on the MLS or off the MLS, it's not going to matter. And these alternative listing services, once that suit is settled, that's probably where you're going to see those sellers who don't want to give any commission to the buyer, they're going to have like more complex, they're going to flock to those kinds of platforms. So your average home, the home buyer is probably going to start in the same place. they've always started looking at a Zillow or realtor.com, or you know, the local MLS like agent or whatever the case is. But then you always can also going to have these other alternative listings that you can consult as well. But then you're gonna have to look at the fine print and see, you know, who are you paying what and what are the parameters around this deal. So you'll probably have this alternative market other than the MLS also come online, but it's interesting. I don't know how it's all gonna play out. We'll have to see.
Ian Robertson
It'll be like Craigslist for houses. Yeah. But you can buy a house on Craigslist, I suppose, too, if you wanted.
Beon DeNood
Yeah, you probably could, even on eBay, I guess if you really want to. Yeah, but I don't know, it's like, is it gonna be like one of these sites that you go on? And like the lights dim in your house? And you know, that kind of thing? I don't know. But there is a lot of opportunity, I guess, for technology companies or, you know, other real estate organizations who have been trying to get this going. There is a lot of opportunity to be made here. And I think ultimately that will impact home inspectors in a positive way. I think down the road, it probably will.
Ian Robertson
Yeah. So, I agree. I think it's going to be status quo with a couple of policy changes and then some cracking of the MLS open is really all I think it's going to be. But I tell you what I talked to home inspectors all the time about this. I just had one last week call me, Ian, do you think the realtors are gonna go away, there was just a post on Facebook, and everybody's talking about it, I really don't see where much is going to or can change when it comes to our industry. I will say, again, if you are thinking this will happen, and there is a chance that it will, so if there's some law, this antitrust act gets forced, their hand is forced, and the courts are like, all right, no more MLS, no more buyer's agents, we can't do this. It's gonna be very quick and hard. But you better have your online stuff ready. Those guys that are like, I don't have a website, I don't need it. It's all handshakes. You are going to be the guys with no work because everybody that was referring you will be gone or on the listing side and can't recommend you. So, personally, I'm just beefing up online marketing, and being ready for when it happens. But we'll have to wait and see. Yeah.
Beon DeNood
Yeah. That's a good tip. Yeah. I mean, and that's a good thing to do anytime, right? Because if an agent, if your big agent like stops, you know, that they're not in business anymore, anything happens. You'd never want to have all your eggs in one basket. So I think that's that's good advice across the board.
Ian Robertson
Yeah, it's funny because the market's slow and the first thing people do is, I'm going to turn off my website. I'm like, Okay, so that's like, my right knee hurts. So let me blow out the left knee. You know, it's, you know, we got to market harder when the markets slow to keep that up. But, you know, everybody has to make their own choice, what fits into their budget, but right now, I am choosing to market harder online and be ready for what comes.
Beon DeNood
Yeah, that sounds perfectly reasonable. Very interesting discussion. I think it's fascinating. We'll have to see what happens here.
Ian Robertson
Yeah. Thank you for being on, Beon, I appreciate it. And we'll talk soon.
Beon DeNood
Yeah, man. Next time, see ya.
Ian Robertson
Bye.