October 2, 2023

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Jason Oppenheim: Commission Lawsuits Could Bring “Armageddon” For Serious Estate

3 min read

The founder of The Oppenheim Team and star of Netflix’s “Selling Sunset” told Yahoo! Finance that opportunity changes to the commission framework could final result in an exodus of real estate brokers.

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A dim real estate winter season could be on the horizon, according to Jason Oppenheim.

The founder of The Oppenheim Group and star of Netflix’s “Selling Sunset” instructed Yahoo! Finance in an job interview that possible modifications to the commission framework for genuine estate agents could lead to an “armageddon” for the sector.

“To be certain about true estate agents, we have bought federal regulators and a pair of lawsuits coming down the pipeline that at worst case could be an armageddon for actual estate agents,” he reported in an interview that aired Jan. 28. “You may well see regulators uncouple the fee framework where the seller is now essentially having to pay for the buyers’ and agents’ fee.”

In 2019, two homesellers filed a lawsuit versus the National Association of Realtors, alleging that some of the NAR’s restrictions violate the Sherman Antitrust Act. The lawsuit — Sitzer vs. The National Association of Realtors — alleges that NAR’s rule that listing brokers should supply customer brokers a commission to listing a assets inflates expenditures for sellers and is consequently anti-competitive.

If NAR loses the circumstance, buyer’s agents could see themselves removed from the equation fully, and the selection of serious estate brokers throughout the state could drop dramatically, Oppenheim believes.

“You could see hundreds of thousands of actual estate brokers leaving the career, and significant brokerages go out of business enterprise,” Oppenheim told Yahoo. “We’re on the precipice of an armageddon that nobody talks about.”

There is the risk of a settlement or appeals, but either result will however likely see the present-day construction of authentic estate deals get majorly overhauled, an celebration Oppenheim states he would welcome.

“I assume there are as well a lot of serious estate agents in any case, so I never feel that is component of the issue,” he explained. “I think the issue is that if we remove the buyer’s agent’s commission, you will see the listing agent representing the buyer in 90 p.c of transactions. It’s referred to as dual company.”

“I don’t feel that’s healthy for the customer mainly because I imagine that the customer should really have their very own representation. It would be no various than heading into a courtroom and you have just one law firm, representing each sides,” he added.

This would create a predicament where agents would have a fiduciary obligation to 1 facet of the transaction, the sellers’ facet, he explained.

“It’s something which is not talked about that a lot, and it could be difficult, likely additional in 2024, but it is coming,” Oppenheim claimed.

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