Jason Oppenheim warns of real estate ‘Armageddon’

The real estate industry could turn upside down soon, says star broker Jason Oppenheim.

Oppenheim, who leads a team of glamorous agents on the Netflix (NFLX) reality series Selling Sunset, recently sat down with Yahoo Finance to discuss the current state of the US real estate market. In an extensive conversation, he warned that the industry’s fee structure could soon change forever.

“Specifically for real estate agents, there are several lawsuits underway with federal regulators that could at worst be Armageddon for real estate agents,” he said. “Regulators may see a separation of fee structures, where sellers are essentially paying buyer and agent fees.”

Two home sellers filed lawsuits in 2019 [Sitzer et al v. National Association of Realtors (NAR)]argues that several NAR rules violate the Sherman Antitrust Act, an 1890 law that prohibits activities that restrict interstate commerce and competition.

One of the NAR rules in question requires listing brokers to provide a commission to buyer brokers for listing properties. The lawsuit alleges that the practice increases costs for sellers and is therefore anti-competitive.

Traditionally, two agents are required to sell a house: a buyer’s agent and a seller’s agent. However, if NAR were to lose the lawsuit, the real estate industry would effectively remove buyers agents from the equation. That means the number of real estate agents in the US (currently 1.5 million, according to the NAR) could plummet.

“We could see hundreds of thousands of real estate agents quit their jobs and major brokers go out of business,” said Oppenheim. standing.”

Oppenheim said there is hope for a settlement or appeals process with regulators, but it is likely that the real estate market is about to undergo a major overhaul. It added that it could eventually head towards a model with lower total fees.

story continues

“I think there are too many realtors anyway, so I don’t think that’s part of the problem.” This is called dual agency,” he said. It’s like going to court, one lawyer representing both sides.”

Oppenheim added that this could create a situation where agents have fiduciary responsibilities to one side.

In 2022, a federal court ruled that private real estate listing services can sue the NAR for anticompetitive practices. Earlier this month, the U.S. Supreme Court rejected an attempt by industry groups to challenge the ruling.

“It’s something that’s not talked about much, and maybe even harder in 2024, but it’s coming,” Oppenheim said.

Dylan Croll is a reporter and researcher at Yahoo Finance. Follow him on Twitter. @CrollonPatrol.

Click here to check out the latest trending stock tickers on the Yahoo Finance platform..

Read the latest financial and business news from Yahoo Finance.

Download the Yahoo Finance App apple Also android.

Follow Yahoo Finance twitter, Facebook, Instagram, LinkedInWhen Youtube.