To the Point With Bob: Uncertainty and Disruption in the Housing Market

(To the Point with Bob is a periodic blog by MBA President & CEO Bob Broeksmit, CMB. You can view this and past blogs here)

Last week’s announcement of a proposed settlement in the real estate commission lawsuits has unleashed a torrent of questions about what real estate transactions might look like in the future–particularly how buyers would be represented and how buyers’ agents would be compensated.

The ink on the proposed settlement is barely dry, and the courts haven’t even considered it yet, but one thing seems certain–change is coming, and those who make their living in the real estate business are understandably on edge.

Here at the MBA, we are reviewing the settlement and working with our fellow housing stakeholders like the National Association of Realtors to identify potential policy and market solutions that limit disruption to real estate transactions and ensure that all parties to the transaction are well-represented and those representatives are compensated fairly.

The real estate business is home to a lot of smart and innovative people. Inevitably, new business models will emerge. MBA’s role is not to put our finger on the scale and recommend, choose or advocate for one model over another. 

Our focus is on helping our members adapt to the changes that do come and ensure that those changes do not disrupt the home financing process and make the experience worse for homebuyers and home sellers. This includes confirming from key secondary market participants that real estate commissions paid directly by the seller to the buyer’s agent/representative, within reasonable limits, are not considered seller contributions and are exempted from the maximums permitted. The VA also needs to eliminate its prohibition on VA borrowers paying a real estate agent.

MBA has completed a preliminary review of the settlement and developed this summary. We will also be releasing a webinar in very short order to help our members better understand the implications of the proposed settlement. Keep an eye out for more information, and, as always, I encourage our members to contact us if they have questions or concerns.