In episode 219 of The Real Word, Byron and Nicole discuss the implications of the bombshell class-action lawsuit set to rock the real estate industry, Zillow’s adjusted home value and sales forecast, and the value of authentic personal branding.
Federal Commission Suit Now A Class Action
In a lawsuit filed in 2019, homesellers Joshua Sitzer and Amy Winger alleged the National Association of Realtors, Realogy, RE/MAX, Keller Williams, Home Services of America, and its subsidiaries violated the Sherman Antitrust Act.
This bombshell lawsuit has been looming over the real estate industry ever since. The original plaintiffs were soon joined by others, who believe commission sharing between the listing side and buyer side of real estate transactions increase seller costs.
This week, class certification was granted in the lawsuit in the U.S. District Court in Western Missouri. As a class action lawsuit, the results could impact agent commissions and industry operations across the nation. NAR and Realogy both appear to be planning to appeal the ruling.
Key takeaways from this lawsuit as they unfold:
- Sellers want buyers’ agents to collect their commission directly from buyers.
- Buyer commissions are inflating the price of real estate and commissions.
- Now a class-action suit, more sellers will be able to jump in and collect over $1 billion in buyer agent damages or commissions previously paid out.
This lawsuit presents a significant threat to the nationwide real estate industry. Costar, among other Zillow competitors, is “rooting for chaos” as it will create an opportunity for a new type of disruption in residential real estate, as Spencer Rascoff stated at Inman Connect New York.
Byron explains why Zillow is a key player that needs to step in alongside NAR and fight this lawsuit tooth and nail, especially if they want their current business model to be relevant in the future.
Zillow Adjusts Home Value and Sales Forecast
Zillow has adjusted its forecast for this year’s home prices. In February, Zillow forecasted a 16.5% growth in home values. They now expect growth to gradually cool down late this spring, dropping their forecast to 14.9% growth over the next 12 months. Additionally, Zillow predicts 6.09 million existing-home sales in 2022, a 0.5% decrease from 2021.
Nicole and Byron are not feeling any sort of cooldown coming with home values. These adjustments from Zillow are very slight because sellers are still in control as inventory levels remain near record lows. The two discuss the unlikely scenario of more inventory hitting the market with accelerated interest rates, which could result in home prices dropping.
The verdict: sellers have nothing to worry about in the short-term.
Finding The ‘And’ In Your Personal Brand
The Marketeer of the Week comes from Ryan Serhant, who encourages agents to be as authentic as possible in their personal brands.
At Inman Connect last week, million-dollar listing agent and New York star Ryan Serhant encouraged agents to find authenticity, lean into their passions, and think about their future selves. No consumer wants to see an agent’s social media flooded with an excess of “under contract” and just listed posts. Being authentic works for the biggest names in any industry, including Serhant and Matt Lionetti, who shared his own story about showcasing his personality at Inman Connect.
The Real Word hosts see it too: Byron shared the surprising number of Instagram DMS a golf post generated about his calves, while Nicole emphasized that posts about family or passions are what generate authentic engagement on social media. While it may seem oversimplified, people want reality.
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