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DOJ’s Statement of Interest in NAR Settlement: What It Really Means
The Department of Justice (DOJ) recently filed a statement of interest in the Missouri Burnett v. NAR lawsuit, causing some concern in the real estate community. Let’s break down what this means and why some of NAR’s responses are raising eyebrows.
Understanding the DOJ’s Position
The DOJ’s statement indicates that their lack of participation in the lawsuit doesn’t “limit the United States’ ability to enforce the antitrust laws, including to seek greater relief for the conduct at issue here.” While this sounds alarming, it’s important to note that the DOJ isn’t taking any immediate action – they’re simply preserving their right to act in the future if they choose to do so.
NAR’s Troubling Response
NAR’s response to this situation reveals some concerning priorities. They stated: “the trade group still believes its appeal of the jury’s verdict would have been strong, but it did not wish to gamble its own existence on an appeal and several more years of litigation.”
This raises a crucial question: Who is NAR really prioritizing? When a trade organization admits they won’t fight for their members, even when they believe they could win, it suggests their primary concern is self-preservation rather than member advocacy.
The Settlement Decision
NAR further stated: “While the settlement was not what NAR wanted, it was the only path guaranteed to avoid a catastrophic outcome.” This logic is fundamentally flawed for several reasons:
- The settlement doesn’t guarantee protection from catastrophic outcomes
- The DOJ’s statement of interest proves this isn’t over
- Similar cases have already been filed (see: US District Court of Massachusetts, Nosalek and Hirschorn)
- NAR can’t prevent individual states from filing similar lawsuits
The Real Issue with Government Intervention
The DOJ’s current focus appears to be on short-term buyer agent agreements, particularly regarding open houses. They argue that mandatory signing before entering an open house limits competition and could force buyers to work with unwanted agents.
However, this highlights a broader issue with government intervention in real estate markets. The DOJ states they “continue to scrutinize policies and practices in the residential real estate industry that may stifle competition.” But true competition would mean:
- Agents should be able to set their own commission rates (even if unreasonable)
- FinTech alternatives should be free to operate as they choose
- Realtors should have the freedom to conduct business as they see fit
- The market should determine the equilibrium naturally
Unintended Consequences
The government’s attempt at consumer protection through regulation might actually harm the very communities they claim to protect. By over-regulating the industry, they risk making professional real estate representation inaccessible to:
- Underserved communities
- Low to moderate income buyers/sellers
- Minority communities
If the government’s version of consumer protection effectively prevents certain communities from accessing real estate services altogether, we need to seriously question whether these interventions are truly serving the public interest.
The solution isn’t more regulation – it’s letting the market determine what works best for consumers while ensuring equal access to services for all communities.
