I have a completely different take than all the discussions I see out there. This DOJ action (with direct pressure from the white house)... isn't...really...about...the commissions.
Someone is pushing this. Follow the money. Commissions are just the distraction - watch the other hand. There are billions to be made by mainly 2 companies that will benefit from this in the long-term. Does anyone think the plaintiffs cared about anything other than their attorney fees and a couple bucks or a coupon for the class members? I believe the extensive industry-changing settlement terms were written by NAR (not the Plaintiffs) and 100% done in an attempt to placate DOJ just enough to not object to the settlement, like they did in Nosalek.
I've been thinking it was Zillow, but now I think CoStar. The real play here isn't about moving the deck chairs around about commission, it's not about saving sellers money, it's not even about reducing commission, and it's not being done for the good of the people.
The real play is putting the decentralized MLSs out of business to be replaced by central listing websites - Zillow, CoStar (Homes.com - who has a BILLION dollar marketing campaign to compete against Zillow and Redfin...during the biggest time of commission uncertainty...this is why they're doing that), and a player to be named later who all will then syndicate between each other and ultimately offer their own IDX feeds.
MLSs are losing their ultimate value proposition as a commission sharing marketplace. Without that, they're just a database of homes for sale and just lost their competitive advantage and main value proposition. Soon, agents will wonder why they're paying these NAR and MLS fees when they can "just find (and probably list) all the homes for sale on Zillow" for free... Then Zillow/CoStar will target sellers directly to list with them instead of through an agent on MLS. Zillow is already doing this for rentals and has severed their IDX feed for rentals from MLS, and CoStar owns Apartments com
Look what DOJ is now going after - clear cooperation policy (Realtors must list all properties they market in MLS). This will open the door for Zillow+CoStar to get agents to list with them directly instead of MLS.
DOJ, as we can see in their objection to the Nosalek settlement, wants to literally prohibit sellers from paying buyer commissions. If this happens, buyers won't be able to pay significant commissions out of pocket, and VA loan buyers are even prohibited from doing so, even if they want to. This would have the effect of many (most?) buyers going unrepresented (with all those repercussions), disrupting the industry, taking a lot of agents out of the business, and therefore weakening or potentially putting many (most?) big brokers out of business since their business model revolves around having enough agents paying them fees, which would further help Zillow+CoStar's goals of taking over the entire real estate transaction, end-to-end.
It could be Zillow pushing this, but while this is also good for Zillow, Zillow incurs more of a short-term financial hit in its referral business, which CoStar has less of. CoStar will likely fall into the #2 market share spot in this new world, and the lawsuit/DOJ action will also weaken Zillow's main revenue stream, and CoStar has other revenue streams (commercial real estate) to keep itself going while they invest in this major, long-term, market-disrupting play, and maybe even compete with Zillow for the eventual #1 spot.
If you have a billion dollars, like CoStar is currently doing, to invest in a marketing campaign to try to make a new market, you sure as hell have enough to contribute to get the ears of people that can make these things (white house pressure for DOJ action) happen.
Many will call this a conspiracy theory, but we'll see how this prediction ages in about 10 years.
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source https://www.reddit.com/r/RealEstate/comments/1bxzotz/what_is_the_dojwhite_house_action_really_about/
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