Where Real Estate Gets Its Dirt

Listing Bits Episode 88: Does NAR Have Value Beyond MLS Access? – with Michael Lissack of The Virtual Realty Group

The verdict against NAR in the Sitzer lawsuit has organized real estate up in arms.

But Michael Lissack thinks the decision is the best thing to happen to the industry in 100 years.

In fact, he sees the trade association as a criminal enterprise with little value beyond MLS access.

Michael is Managing Broker for The Virtual Realty Group, a 100% commission brokerage that operates in 12 states. 

On this episode of Listing Bits, Michael joins Greg to discuss the real issue behind the lawsuits against NAR and describe what he would do to make buyer’s agent commission negotiable.

Michael explains why it’s necessary to decouple the MLS from NAR membership and how that would likely lead to bankruptcy for the trade association.

Listen in for Michael’s provocative take on why associations don’t deserve a way forward in a world where MLS access is open to anyone with a real estate license.

What’s Discussed:  

The real issue behind the lawsuits against NAR and several real estate brokerages

What Michael would do to make buyer’s agent commission negotiable

Why the DOJ takes issue with mandatory membership in NAR for MLS access

How decoupling the MLS from NAR would impact everyday REALTORS

What decoupling the MLS from NAR membership would do to the trade association (and what NAR might do to demonstrate its value and rebuild)

What it would take to decouple local, state and NAR membership

Why Michael believes a real estate license should be the only requirement for MLS access

Running MLSs as not-for-profit organizations vs. for-profit entities

Greg’s thoughts on providing a way forward for associations by compensating them for the work of building the MLS

Why bankruptcy might be apt for associations who don’t provide value beyond MLS access

Connect with Michael Lissack:

Michael.Travel

Michael on LinkedIn

Resources:

Sitzer v. NAR

Michael’s LinkedIn Post

Our Sponsors:

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Batton down the hatches

Mother of all commission suits filed in Illinois, this time by homebuyers

“The scope of Batton 2 is exponentially larger than Gibson, Sitzer | Burnett, or another, similar case, Moehrl. Both Batton 1 (formerly, Leeder) and Batton 2 seek class certification on behalf of two proposed classes:

  • a “Nationwide Class” made up of “All persons who, since December 1, 1996 through the present, purchased in the United States residential real estate that was listed on an NAR MLS.” For this class, the plaintiffs are asking for injunctive relief, meaning either a court-ordered prohibition or a requirement on the defendants’ behavior.
  • a “Damages Class” made up of “All persons who, since December 1, 1996 through the present, purchased in the Indirect Purchaser States residential real estate that was listed on an NAR MLS.” For this class, the plaintiffs are asking for damages under “antitrust, unfair competition, consumer protection, and unjust enrichment laws.”
Andrea Brambila via Inman News

This is why I drink.

RPR was not on my bingo card

Remember back when the industry freaked out about RPR and how it could be NAR’s play to become a national MLS? I found this article from 2009, that captures the spirt of the day.

Skeptics of RPR Database Voice Worries

“Some skeptics at the conference have even referred to the Realtors® Property Resource database (RPR), as “Reaper” — as in the Grim Reaper — fearing its potential to harm their business.

Because it will not include offers of cooperation and compensation and will only be accessible to NAR members, the database won’t function as a national MLS, NAR says. Not all are ready to take NAR’s word for it.”

RETechnology

Emphasis mine. Sure you would have to be a member of NAR but in a day and age where many people are questioning what being an “MLS” even means … who knows what could happen?

Somewhere Marty Frame is laughing his ass off.

Rob Hahn ties up a few loose ends of the #SitzerBurnett appeals process

Musings on the Appeals Bond Hearing

“Let’s say NAR has $500 million, BHHS has $100 million and KW has $50 million that can go towards collateral for a supersedeas bond. That’s $650 million, and that’s assuming all three organizations completely empty the bank account, liquidate everything that can be liquidated, and not even have operating funds. 

That is completely unrealistic. For one thing, they have to pay lawyers for the appeal. And pay staff and such in order to be a going concern.”

Rob Hahn, NOTORIOUS ROB

Must read.

Bob Goldberg out at NAR

Bob Goldberg out as NAR CEO

“The National Association of Realtors’ longtime CEO Bob Goldberg is leaving the trade association, multiple sources with knowledge of the situation have confirmed to HousingWire Thursday morning.

“We are immensely grateful for Bob’s leadership and decades-long service to NAR,” Tracy Kasper, current NAR president, said in a statement. “It has been a privilege to work with him in expanding and strengthening our organization, and we congratulate him on his well-deserved retirement. His contributions to our association and our industry have been tremendous.”

Goldberg’s departure comes just two days after a federal jury in Kansas City, Missouri, ruled that NAR, HomeServices of America and Keller Williams had colluded to artificially inflate real estate agent commission rates.“

Brooklee Han at HousingWire

Damn.

My prediction #sitzerburnett

With the risk of letting one more tiger in to the ring I’m going to make a prediction. I first have to thank Andrea Brambila of Inman News for her live updates. Also Austin Alanzo from Real Estate News.

While it would have been ideal to be in the courtroom and see the reactions of the jurors to testimony I’m going to make my prediction based upon a couple precepts.

  1. The issue is more complicated than it seems.
  2. The vote must be unanimous.

So, what’s my prediction? Drumroll please……

NAR wins.

Now, I’m unsure if the jury votes on the corporate defendants separately (KW and BHHS) and I don’t know if the jury’s instruction includes a “per se” messaging (you’ll have to listen to the last few episodes of Industry Relations to understand what that means).

But based upon what I’m hearing from people inside the courtroom and the summaries I’m reading this wasn’t a “slam dunk”. So if there is any hint of uncertainty, that means an unanimous vote is unlikely.

Now I believe this is a pretty bold prediction. You’ve got a home town lawyer (Ketchmark) who apparently was close to tears in his closing arguments (tears? really? really?) and the cliche of the “greedy real estate agent”. But did they prove an industry-wide conspiracy? I don’t think so.

6%? Hold My Beer

In this first week of the Sitzer Burnett trial is all about the plaintiff presenting their case. And it seems that the plaintiffs are all about showing training materials, and slides from previous conferences that use the 6% as proof that the “fix is in”!

The poor consumer has been tricked in to thinking that this percentage was never negotiable. Hell, the whole reason for scripts in the first place was that CONSUMERS WERE ALWAYS TRYING TO NEGOTIATE. Has anyone brought that point up?

Also, this….

Burnett v. NAR: The Lawsuit That Could Upend the Housing Market

What if we told you that a high-stakes trial in the real estate and technology industry is about to unfold, with potential implications for consumers and the future of the housing market? Today, Rob and Greg are joined by Ed Zorn, Vice President and General Counsel at CRMLS, and they dive into the details of the ongoing Burnett v. NAR trial, exploring the various legal aspects and arguments that could lead to a major disruption for home sales.

Join us as we discuss the application of the “per se” standard, the challenges faced by the Burnett, and the pivotal role of the Multiple Listing Service (MLS) in this episode of our podcast. Don’t miss this heated discussion as Rob and Greg once again do their best to save the real estate industry.

Watch us on YouTube!

Connect with Rob and Greg: 

Rob’s Website

Greg’s Website

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This podcast is produced by Two Brothers Creative 2023.

Inman News’ Andrea Brambila is “live on the scene” for the Sitzer | Burnett case

I don’t think they allow phones or recording devices in the courtroom for the Sitzer | Burnett lawsuit but Inman News has sent Andrea to cover the courtroom case and they have posted a website, for “live updates”. I don’t think anyone has as much understanding of the issues more than Andrea so I’m glad they sent her!

You can check the Live Updates site here.

RE/MAX Settles…2 down 3 to go?

RE/MAX settles buyer broker commission lawsuits for $55 million

“The Settlement resolves all claims in the Lawsuits and similar claims on a nationwide basis against RE/MAX … and releases RE/MAX and the Company, their subsidiaries and affiliates, and RE/MAX sub-franchisors, franchisees and their sales associates in the United States from the Claims,” the SEC filing reads.

“By the terms of the Settlement, RE/MAX agreed to pay a total settlement amount of $55.0 million … into a qualified settlement fund. In addition, RE/MAX agreed to make certain changes to its business practices.”

Brooklee Han for Housing Wire

Once again, if I’m proven right about the lawsuits being settled, I’m going to be unbearable. 😈

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