The founder of The Oppenheim Group and star of Netflix’s “Selling Sunset” told Yahoo! Finance that potential changes to the commission structure could result in an exodus of real estate agents.
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A dark real estate winter could be on the horizon, according to Jason Oppenheim.
The founder of The Oppenheim Group and star of Netflix’s “Selling Sunset” told Yahoo! Finance in an interview that potential changes to the commission structure for real estate agents could lead to an “armageddon” for the industry.
“To be specific about real estate agents, we’ve got federal regulators and a couple of lawsuits coming down the pipeline that at worst case could be an armageddon for real estate agents,” he said in an interview that aired Jan. 28. “You might see regulators uncouple the commission structure where the seller is now essentially paying for the buyers’ and agents’ commission.”
In 2019, two homesellers filed a lawsuit against the National Association of Realtors, alleging that some of the NAR’s regulations violate the Sherman Antitrust Act. The lawsuit — Sitzer vs. The National Association of Realtors — alleges that NAR’s rule that listing brokers must offer buyer brokers a commission to list a property inflates costs for sellers and is therefore anti-competitive.
If NAR loses the case, buyer’s agents could see themselves removed from the equation entirely, and the number of real estate agents across the country could drop dramatically, Oppenheim believes.
“You could see hundreds of thousands of real estate agents leaving the profession, and major brokerages go out of business,” Oppenheim told Yahoo. “We’re on the precipice of an armageddon that nobody talks about.”
There is the possibility of a settlement or appeals, but either outcome will still likely see the current structure of real estate deals get majorly overhauled, an event Oppenheim says he would welcome.
“I think there are too many real estate agents anyway, so I don’t think that’s part of the problem,” he said. “I think the problem is that if we remove the buyer’s agent’s commission, you’ll see the listing agent representing the buyer in 90 percent of transactions. It’s called dual agency.”
“I don’t think that’s healthy for the consumer because I think that the buyer should have their own representation. It would be no different than going into a courtroom and you have one lawyer, representing both sides,” he added.
This would create a situation where agents would have a fiduciary duty to one side of the transaction, the sellers’ side, he said.
“It’s something that’s not talked about that much, and it could be difficult, probably more in 2024, but it’s coming,” Oppenheim said.