NAR and agents respond to Realogy’s president and Coldwell Banker’s CEO Ryan Gorman’s comments about making revenue sharing in real estate commissions voluntary rather than mandatory as current policy states.
Response from National Association of REALTORS® (NAR)
Mantill Williams, vice president of communications with the National Association of REALTORS® (NAR), responded in an email statement to Inman, “NAR is committed to transparent and efficient markets for buying and selling homes. We recently updated our rules to further reinforce transparency by requiring MLSs to include the listing broker’s offer of compensation for each active listing displayed on its consumer-facing website. Our rules have always provided that listing brokers in consultation with their clients determine how much commission to offer the buyer broker.
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“NAR continues to believe that the guidance regarding cooperative compensation that appears in its Handbook on Multiple Listing Policy serves the best interests of both consumers and brokers. It gives them freedom to choose how much commission to offer the buyer broker, including as little as one penny.”
Agents Slammed Realogy for Its Filing Against NAR’s Revenue Sharing Rule
Agents of all stripes reacted to Gorman’s statements as spoken in a phone interview with Inman about Realogy’s public statement asking that NAR’s requirement of commission revenue sharing by buyer’s and seller’s agents.
Some of the agents’ reactions were scathing and some were subdued. Here are some examples:
Illinois-based agent Jeffrey Olichwier said, “What Gorman is presenting is the WORST of both worlds. It’ll make it more confusing for the consumer. It’ll make it more difficult for the buyer broker representatives. Buy brokers are already getting bad commission splits – and they cannot be negotiated by the buyer.”
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Florida-based agent Laura Michelis said that Gorman’s proposed system could make buyers’ agents obsolete. Michelis said, “Asking the buyer to pay for buyer’s agent commission will make many buyers go directly to the listing agent and not use a buyer’s agent. Little by little buyer’s agents will be nonexistent and the MLS will be only a portal.”
Gerald Walsh who operates as an agent in Minnesota spoke up for buyers. Walsh said, “Many of my buyers already require down payment assistance. There is no way they could afford buyer-agent commissions outside the transaction…This change could eliminate homeownership for hundreds of thousands.”
South Carolina-based broker Dan Lang spoke up for buyers using VA loans (a loan group that grew in usage by +100%+ in more than 28 of the country’s largest cities in 2020). Lang said that VA buyers would be forced to work with a listing brokerage with little/no representation because “…they can not be charged a brokerage fee by a buyer’s agent per VA guidelines. FHA and other low down payment buyers will be negatively affected as well.” Lang reminded Realogy and Gorman that, “We have buyer representation now because of previous class action lawsuits where buyers were not represented.”
Thanks to Inman.