Since the National Association of Realtors (NAR) and the plaintiffs in the following lawsuits—Christopher Moehrl v. The National Association of Realtors et al., Rhonda Burnett (originally Sitzer) v. The National Association of Realtors et al., Dawin Niel Umpa v. The National Association of Realtors, et al., and Don Gibson v. The National Association of Realtors—reached a settlement agreement on March 15, 2024, which is still pending court approval and thus preliminary at this point, the topic has dominated industry conversations. The focus of these lawsuits on buyer’s agent commissions has attracted more media attention since mid-March than it seems to have received in the over 40 years I’ve been in the business before that. Don’t get me wrong, I’m not saying all this attention is bad. In fact, I believe it is beneficial. I’ve long advocated for educating consumers, feeling that the more home buyers and sellers know, the better decisions they can make. This is why I’m rapidly approaching the milestone of 3,000 articles on the topic of real estate in St. Louis on this site.
Now, I don’t do this solely for altruistic reasons; sharing the information and knowledge I’ve gained either through experience or research is also self-serving. As a broker-owner of MORE, REALTORS®, I’ve put forth just as much effort in sharing knowledge with our agents, and I am blessed to be surrounded by real estate professionals who are as eager as I am to increase their knowledge and hone their skills to better serve clients. Here’s the reward for me: informed and knowledgeable consumers seek out better and more professional agents, like the ones we’re in business with, creating a win-win situation.
Having said all that, while the attention from the media is beneficial, unfortunately, there is a lot of incorrect information out there and assertions being made that don’t seem to be based on facts, but rather on opinion. Oh yes, I have opinions too, plenty of them, many of which are shared on this site, but to the extent possible, I try to base them on facts and include the sources of my opinions.
In the wake of recent legal developments, including a proposed settlement by the National Association of Realtors (NAR) in March addressing buyer agent commissions, the real estate industry finds itself at another critical juncture. This time, attention turns to a lawsuit spotlighted in my article from a week ago, “New Lawsuit Against NAR Spotlights Tying of MLS Access to Realtor Membership in Ongoing Commission Debate“, which challenges the longstanding practice of tying MLS access to Realtor association membership. Unlike the NAR settlement that focused on commission structures, this new legal action delves into the exclusivity of market information access, a matter that has long spurred debate and litigation.
A Recurring Theme in Real Estate Litigation
The intertwining of Realtor association membership and MLS access has been a contentious issue, sparking several lawsuits over the years. This relationship, critics argue, creates barriers to competition and innovation in the real estate market.
Significant Legal Precedents
A pivotal moment in this ongoing discourse was the “Thompson v. Metropolitan Multi-List, Inc. Lawsuit,” where the 11th Federal Circuit Court of Appeals in 1991 ruled against restricting MLS access to Realtor members in Georgia. This case set a significant precedent, affirming that such practices could violate federal antitrust laws if the MLS wielded “market power” in the relevant geographic market.
Further complicating the landscape, California courts in the late 1970s found similar restrictions in violation of state antitrust statutes, thereby requiring Realtor associations in the state to open their MLS to non-members.
Looking Ahead
As the real estate industry continues to evolve, the relationship between REALTOR® associations and MLS access remains a focal point for legal scrutiny and industry reform. The implications of these legal battles extend beyond the courtroom, potentially shaping the future of real estate transactions, market competition, and consumer choice.
While the NAR settlement and recent lawsuits highlight different facets of the industry’s challenges, they collectively underscore a broader call for transparency, fairness, and innovation in real estate practices.
Conclusion
The dialogue surrounding MLS access and REALTOR® association membership is far from concluded. As legal actions continue to unfold, stakeholders across the real estate spectrum must remain vigilant and adaptable to the changing regulatory and business environment. At MORE, REALTORS®, we’re keenly aware of these potential shifts and are proactively strategizing to ensure our agents are well-positioned to navigate any changes that may arise. Our focus remains steadfast on providing exceptional service to our clients, irrespective of the evolving industry dynamics. As always, we’re committed to transparency, adaptability, and unwavering professionalism.
In a significant turn of events that has captured the attention of homebuyers, homesellers, and real estate professionals nationwide, the United States Court of Appeals for the District of Columbia Circuit has delivered a landmark judgment that underscores the intricate balance between regulatory oversight and the operational freedoms of real estate associations. This case, National Association of Realtors (NAR) versus United States of America, et al., centers on the alleged anticompetitive practices within the real estate industry, specifically scrutinizing the policies implemented by NAR.
The Department of Justice (DOJ), through its Antitrust Division, initiated an investigation into NAR’s policies, which culminated in a settlement in November 2020. This settlement aimed to address four out of six policies identified by the DOJ as potentially anticompetitive. Crucially, it also included the issuance of a closing letter by the DOJ, indicating the closure of its investigation into two key NAR policies: the “Clear Cooperation Policy” and the “Participation Rule.” These policies relate to the operation of multiple-listing services (MLSs) and the commission structure within real estate transactions, respectively.
However, in a dramatic shift, the DOJ reopened its investigation into these policies in July 2021, leading to a legal challenge by NAR. NAR argued that the DOJ’s action breached the settlement agreement, which, in their view, included an implicit assurance against reopening the investigation into the specified policies.
The Appeals Court, in its decision, highlighted the legal nuances of the settlement agreement and the scope of the DOJ’s commitments. The court concluded that the settlement did not preclude the DOJ from reopening its investigation. This decision not only emphasizes the DOJ’s ongoing authority to regulate and scrutinize industry practices for anticompetitive behavior but also signals to real estate professionals the importance of adaptive compliance with evolving regulatory landscapes.
This ruling carries profound implications for the real estate industry, reinforcing the principle that regulatory oversight is a dynamic process, subject to revision and reassessment in light of new information or changing circumstances. For homebuyers and homesellers, the decision underscores the government’s commitment to ensuring fair and competitive practices within the real estate market, aiming to protect consumer interests and promote market transparency.
United States Court of Appeals Judgement – NAR vs United States of America
In the evolving landscape of real estate litigation, a fresh lawsuit filed by homeowner Hao Zhe Wang against the National Association of Realtors (NAR) and several major real estate brokerage firms introduces a nuanced critique of industry practices. Distinguishing itself from prior actions, this case zeroes in on the contentious policy requiring real estate agents to be NAR members in order to access Multiple Listing Services (MLS), a stipulation the plaintiff contends unfairly influences commission structures and inflates transaction costs.
The Core Allegations:
At the heart of Wang’s lawsuit is an objection to how MLS access — a critical tool for buying and selling properties — is tied to membership in the NAR. This arrangement, according to the lawsuit, perpetuates a non-competitive environment where commission rates are kept uniformly high due to lack of market-driven pricing. This system, the plaintiff argues, indirectly forces buyers to absorb the cost of buyer’s agent commissions, which are embedded in home purchase prices, in violation of antitrust laws.
Legal Objectives:
Seeking Class Action: The lawsuit aims to achieve class action status, offering representation to a broad swath of home buyers potentially affected by the described practices.
Injunctive Relief and Damages: Beyond seeking damages for alleged overpayments, the complaint calls for judicial intervention to prohibit the continuation of tying MLS access to NAR membership, alongside the existing commission practices.
Industry Implications:
This lawsuit adds another layer to the ongoing discourse on real estate commission models, specifically targeting the structures that underpin agent access to essential market information. By challenging the linkage of MLS access to NAR membership, the case prompts a reevaluation of how such policies impact competition, pricing, and ultimately, consumer choice.
Reflecting on the Bigger Picture:
From an insider perspective, this case illuminates the complex interplay between professional associations, access to market information, and how commissions are structured. It calls into question whether current practices best serve the market’s needs or if they inadvertently constrain competition and innovation. As the real estate industry continues to grapple with these issues, the outcome of this lawsuit could have significant repercussions, potentially catalyzing shifts towards more transparent and consumer-friendly practices.
Hao Zhe Wang v The National Association of REALTORS®
The Council of Multiple Listing Services (CMLS), representing over 200 Multiple Listing Services nationwide, has filed a brief supporting the settlement reached between the parties in the lawsuit against MLS Property Information Network (MLS PIN). While this is not the settlement announced last week by the National Association of REALTORS® (NAR), it involves one of the several lawsuits tied to the NAR settlement.
CMLS filed their brief in response to the one filed by the Department of Justice (DOJ) in February, which opposed the MLS PIN settlement, arguing that it did not go far enough to change existing practices to lower commissions and increase competition. In their brief, CMLS points to data showing that a similar rule change adopted by the Northwest Multiple Listing Service (NWMLS) in 2019 saved homebuyers an average of $1,000 per transaction by reducing buyer agent commissions.
The DOJ has opposed the MLS PIN settlement, asserting that it would not meaningfully benefit consumers. CMLS contends that the DOJ’s analysis is flawed and that its preferred solution – an outright ban on buyer agent compensation – could disrupt the real estate market and harm consumers.
It is doubtful that the judge will make a ruling in the MLS PIN case while the NAR settlement is pending. However, the briefs filed by the DOJ and CMLS in the MLS PIN lawsuit may have an impact on the decision regarding the NAR settlement.
One of the issues receiving significant attention following the announcement of the REALTOR® commission suit settlement is the topic of buyer commissions, specifically regarding whether a buyer has to pay them and how lenders will treat the commissions.
In a recent letter to the Federal Housing Finance Agency (FHFA), Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac, NAR and MBA sought confirmation on the treatment of buyer agent commissions following a proposed settlement agreement in the Burnett et al and Moehrl et al cases.
What does this mean for homebuyers? Under the settlement, cooperative commissions will no longer be displayed on Multiple Listing Services (MLS), but listing brokers and sellers will still be able to offer compensation for buyer broker services through other means. Additionally, the settlement does not prohibit home sellers from paying buyer agent commissions directly.
NAR and MBA believe that FHA and Government-Sponsored Enterprise (GSE) policies should continue to exclude seller or listing agent payments of buyer agents’ commissions from Interested Party Contributions (IPCs). IPCs are concessions from the seller to the buyer for items traditionally paid by the buyer, such as loan closing costs or rate buy-downs. Maintaining this practice is essential to ensure that the flow of mortgage capital to homebuyers remains uninterrupted.
As a homeowner or potential buyer, it’s important to stay informed about these developments and how they may impact your buying or selling process. NAR and MBA have requested confirmation from the FHFA, FHA, Fannie Mae, and Freddie Mac as soon as possible to prevent any confusion and potential disruptions that may cost you money or even jeopardize your home purchase.
Previously, I wrote about the settlement reached by the National Association of Realtors (NAR) aiming to resolve litigation concerning alleged anticompetitive practices, potentially leading to financial compensation for certain home sellers in St. Louis and beyond. This litigation, which centers on claims of inflated commission rates, could see a transformative resolution pending court approval expected by summer. If approved by the court, this settlement, alongside those reached with other corporate defendants like RE/MAX, Keller Williams, Realogy, and Compass, would provide eligible home sellers a pathway to claim financial redress for the commissions paid during the specified periods.
Eligibility Criteria and Key Details:
Moehrl v. NAR Eligibility:
Sold a home between March 6, 2015, and December 31, 2020.
Utilized a real estate agent or broker affiliated with specific defendants, including Keller Williams, RE/MAX, and Anywhere Real Estate, among others.
Paid a commission for the sale listed on a covered Multiple Listing Service (MLS) in certain areas.
Filing Deadline: The deadline to submit a claim is May 9, 2025.
Burnett et al. v. NAR Eligibility:
Sold a home within the eligible date range specified in the Long Form Notices.
Listed the sold home on an MLS in any part of the United States.
Paid a commission to any real estate brokerage in connection with the sale.
Not restricted to homes sold using agents from Anywhere, RE/MAX, or Keller Williams.
Filing Deadline: The deadline to submit a claim is May 9, 2025.
Next Steps for Eligible Home Sellers:
Verify Eligibility: Sellers should review the detailed eligibility criteria on the settlement websites to determine if their home sale qualifies.
Submit a Claim: To be considered for a payment, eligible sellers must file a claim by the May 9, 2025 deadline. Claim forms are accessible by clicking the links below:
Last week, I wrote an article about the settlement reached by the National Association of REALTORS® in pending litigation concerning buyer agency compensation. This includes the “Sitzer” (now Burnett), “Moehrl,” and “MLS PIN” suits, among others. As mentioned, this is an early stage in the process; the settlement agreement, although agreed upon by the parties involved, has not yet been filed with the court. Given these are large class action lawsuits alleging antitrust violations, numerous hurdles must be overcome. These could necessitate changes to the settlement terms on the path to court approval—if the court approves it at all.
Hurdles include the court holding a fairness hearing to assess if the proposed settlement is fair, reasonable, and adequate for class members. This hearing allows class members to express objections and concerns. Moreover, antitrust class action lawsuits like this one, which impact market competition and consumer protection, prompt the court to consider broader public interest implications when approving settlements. This attention often draws input from professional associations, consumer organizations, and, as seen in the MLS PIN suit, the United States, giving their opinion on the settlement’s sufficiency.
Ultimately, the decision rests with the judge, who will consider all these aspects.
I should have led with this, but I am not an attorney, and this is not legal advice. As a real estate broker with over four decades in the residential real estate industry, I have a keen interest in the legal facets of our business and the issues at hand, closely following these cases since 2019. I’m a staunch advocate for transparency and education for real estate professionals, clients, and everyone involved. The more accurate knowledge consumers have about buying and selling a home, the better choices they can make. This is especially true when selecting a real estate agent, as not all are created equal.
Back to the matter at hand.
What will the DOJ say about the NAR Settlement?
Assuming the Department of Justice files an amicus brief in this case, as they did with MLS PIN—a safe assumption, in my view—it’s intriguing to speculate on their comments regarding this settlement. While I lack a crystal ball or insider information, considering the DOJ’s Statement of Interest filed on February 15, 2024, in Nosalek V. MLS Property Information Network (MLS PIN), and assuming their opinion hasn’t shifted in the last five weeks, offers a logical foundation for analysis.
I sought an objective analysis from my trusty AI Assistant, which, for the sake of this discussion, is an outstanding attorney specializing in antitrust law (or at least that is what I’ve told it to think of itself as). Applying the DOJ’s recent statement to this settlement, here’s what it suggests the DOJ might say:
Inadequate Address of Core Antitrust Concerns: The settlement’s proposed rule changes fail to resolve the fundamental antitrust issues raised in the complaint fully. While allowing $0 cooperative compensation offers and requiring commission negotiation disclosures, the continued practice of blanket unilateral compensation offers to buyer brokers by sellers and listing brokers could perpetuate steering risks and obstruct genuine price competition.
Broad Release of Potential Antitrust Claims: The extensive release of antitrust claims against a wide range of parties, including NAR, REALTOR® associations, MLSs, and individual brokers and agents, is concerning. Given the settlement’s limited injunctive relief, this broad release might inadequately serve class members.
Insufficient Monetary Relief: The $418 million settlement fund, potentially inadequate for the damages at issue, may not ensure compensation for class members after litigation expenses and attorney’s fees. The settlement lacks a clear mechanism for maximizing class member payouts.
Potential Chilling Effect on Future Antitrust Challenges: The settlement could deter or complicate future anticompetitive practice challenges by immunizing modified rules from further scrutiny, making subsequent lawsuits more difficult.
Comparison to MLS PIN Settlement: Despite more extensive practice changes than the MLS PIN agreement, the settlement doesn’t effectively address core antitrust concerns, marginally improving over the MLS PIN agreement.
In conclusion, despite offering more monetary relief and practice changes than the MLS PIN agreement, the settlement inadequately addresses fundamental antitrust issues. The court must weigh whether the settlement’s limited benefits justify the broad release of claims and the potential chilling effect on future antitrust enforcement. As in the MLS PIN case, a more effective remedy might prohibit the seller-paid buyer broker commission model, fostering genuine market competition.
This is all based on publicly available information. We must wait to see the DOJ’s stance and whether the judge deems the settlement adequate.
Yesterday, I reported on the groundbreaking settlement proposed by the National Association of Realtors (NAR) to resolve the ongoing litigation surrounding broker commissions. Today, I want to dive deeper into the specifics of this settlement agreement and what it means for homeowners and real estate professionals here in the St. Louis area.
Key Points of the NAR Settlement Agreement
Broad Coverage: The settlement class is expansive, including home sellers who listed properties on MLSs anywhere in the U.S. during specified date ranges and paid a commission to any brokerage. For the St. Louis region, sellers are covered if they sold homes between October 31, 2018, and the date of the official Class Notice.
Released Parties: The settlement releases a wide range of parties from future claims related to broker commissions, including NAR, REALTOR associations, and MLSs that adhere to the required practice changes. Brokerages with 2022 transaction volumes under $2 billion are also released if they comply with the new rules.
Practice Changes: The agreement mandates significant shifts in industry practices, including:
“eliminate and prohibit any requirement by the National Association of REALTORS®, REALTOR® MLS, or Member Boards that listing brokers or sellers must make offers of compensation to buyer brokers or other buyer representatives (either directly or through buyers), and eliminate and prohibit any requirement that such offers, if made, must be blanket, unconditional, or unilateral;”
“prohibit REALTOR® MLS Participants, subscribers, other real estate brokers, other real estate agents, and their sellers from (a) making offers of compensation on the MLS to buyer brokers or other buyer representatives (either directly or through buyers) or (b) requiring that offers of compensation be made on the MLS to buyer brokers or other buyer representatives (either directly or through buyers);”
“require that REALTOR® MLS Participants who work with buyers enter into written agreements with their buyer clients that specify the broker compensation and how it will be paid, including if it will be paid by the buyer;”
“require that REALTOR® MLSs and REALTOR® MLS Participants provide, with any MLS listings that include a listing broker’s offer of compensation to a buyer broker or other buyer representative (either directly or through buyers), (i) disclosure as to the amount of that offer of compensation and (ii) a searchable field that displays buyer broker compensation offers;”
“prohibit REALTOR® MLSs, REALTOR® MLS Participants, and REALTOR® Member Boards from taking any adverse action against any Person making offers of compensation to buyer brokers at any price, or no price, either on or off the MLS;”
Financial Payout: NAR will pay a total of $418 million over four years to resolve the claims, with the first payment of $5 million due within 30 days of preliminary approval of the settlement. What This Means for St. Louis
What This Means for St. Louis
For homeowners in the St. Louis area, this settlement could bring more transparency to the commission structure when selling a home. By removing the requirement for listing brokers to offer buyer broker compensation through the MLS, the agreement aims to give sellers more control over how commissions are negotiated and paid.
Real estate agents and brokerages in our region will need to adapt to these changes, focusing on educating clients about compensation options and ensuring compliance with the new rules. At MORE, REALTORS®, we’ve been preparing for these shifts and are ready to guide our clients through the evolving landscape.
The full text of the NAR settlement agreement can be found below. As always, I’ll continue to keep you informed about how these developments impact our local market.
This morning, Kevin Sears, President of the National Association of Realtors (NAR), unveiled a proposed settlement designed to bring to a close the contentious litigation surrounding broker commissions, a move that could significantly alter the landscape of the real estate industry. This development comes on the heels of the Sitzer-Burnett verdict, which cast the traditional practices of real estate professionals, particularly those concerning hiring and compensation methods, into the spotlight, sparking a series of lawsuits and raising questions about the future of the industry.
A Closer Look at the Proposed Settlement
The core aim of the proposed settlement is to resolve the ongoing litigation against NAR, its members, and associated real estate entities by addressing the claims related to broker commissions. Key components of the settlement include:
Liability Release: More than one million NAR members, along with various real estate entities, will be absolved from liability for claims akin to those highlighted in the lawsuits.
Compensation Offers: A pivotal change involves the elimination of compensation offers from MLS listings, a rule set to take effect in mid-July 2024.
Written Agreements: Starting mid-July 2024, MLS participants working with buyers will be required to engage through written representation agreements.
Financial Implications: NAR has committed to paying $418 million over a four-year span, a significant financial undertaking that will not result in an increase in the 2024 membership dues according to the release. (Noted is the fact they didn’t commit to no increases as a result beyond 2024)
Kevin Sears Weighs In
Sears articulated the objectives of the settlement, stating, “This proposed settlement achieves our goals to reduce strain on our members and chart a path forward for the industry.” He further emphasized the industry’s resilience and adaptability, expressing confidence that the agreement “allows us to move forward, preserving the right to real property for all.”
MORE, REALTORS® Prepared for the Future
Yes, this might come off as a shameless plug, but it would be a disservice not to mention how myself, alongside our brokerage’s leadership team, brokers, and agents, have been proactively preparing for the anticipated changes. We’ve delved deep into the issues raised by these lawsuits, identifying practices in need of rectification, regardless of the legal outcomes. Thus, while the shift away from MLS compensation offerings may catch many off guard, our team stands ready. We’re equipped to demystify the compensation process for our clients transparently, dedicating our focus to their needs. Discover more about our exceptional team at MORERealtors.com.
At a real estate conference in Boston on February 1, 2024, NAR President Kevin Sears addressed a pressing issue facing the National Association of Realtors (NAR) and its members. Sears candidly discussed the aftermath of a$5.4 billion verdict against NAR, drawing parallels to a sports scenario to highlight the disappointment of a loss despite believing in the righteousness of their policy and actions. He emphasized the importance of moving forward, focusing on the legal appeals process and the ongoing challenges with the Department of Justice (DOJ), which has been a persistent adversary for NAR.
Sears detailed the history of NAR’s interactions with the DOJ, including a settled agreement in 2020, which the DOJ later contested, leading to further legal battles. He highlighted a specific case involving MLS Property Information Network (MLS PIN) in Massachusetts, which faced a “copycat lawsuit” and encountered DOJ objections to settlement agreements, underscoring the DOJ’s significant influence on the real estate industry’s operations.
Kevin Sears provided a comprehensive overview of the National Association of Realtors’ (NAR) complex and ongoing interactions with the Department of Justice (DOJ), painting a picture of an enduring legal struggle that has deep implications for the real estate industry. He began by recounting a pivotal moment in 2020 when NAR reached a settlement agreement with the DOJ, a moment that seemed to mark the beginning of a resolution to their disputes. However, this sense of resolution was short-lived as the DOJ later contested the terms of the agreement, reigniting a series of legal challenges that have since persisted.
Sears’ narrative then shifted focus to a more recent and illustrative example of these challenges: the case involving the MLS Property Information Network (MLS PIN) in Massachusetts. This particular case, described by Sears as a “copycat lawsuit,” mirrored the broader issues at stake between NAR and the DOJ. The lawsuit led to a proposed settlement agreement between MLS PIN and the plaintiff’s attorneys, which, in a turn of events characteristic of the DOJ’s recent interventions, faced objections from the DOJ. The federal department’s refusal to endorse the settlement underscored its readiness to closely scrutinize and influence the outcomes of legal disputes in the real estate sector.
Through these examples, Sears emphasized the DOJ’s significant and active role in shaping the operational landscape of the real estate industry. He highlighted the DOJ’s apparent commitment to altering traditional practices within the industry, particularly those related to the compensation of buyer’s agents through commissions offered by sellers. This ongoing legal saga between NAR, its members, and the DOJ not only reflects the complexities of antitrust law in real estate but also signals a potentially transformative period for industry practices and professional relationships.
Key Points Made by Kevin Sears:
Acknowledged the $5.4 billion verdict against NAR, emphasizing the need to move forward through legal appeals and post-trial motions.
Highlighted the longstanding challenges with the DOJ, including a contested settlement and ongoing legal disputes.
Discussed the specifics of a lawsuit involving MLS PIN in Massachusetts, illustrating the DOJ’s active role in scrutinizing industry practices and settlements.
Stressed the importance of adapting to changes in the real estate industry, particularly regarding how businesses operate and how realtors are compensated.
Urged the audience to consider the future of the industry and the necessity of embracing change, whether willingly or as a result of external pressures.
Yesterday, the Department of Justice filed a Statement of Interest concerning the Nosalek v. MLS PIN case. In the class action lawsuit Nosalek v. MLS Property Information Network, Inc., plaintiffs allege that mandatory commission agreements for buyer-brokers on the MLS system are anticompetitive, leading to artificially inflated commission rates for sellers, in violation of antitrust laws. Previously, a settlement was reached by the parties in the lawsuit, but the DOJ intervened, asking the court to hear the views of the United States before deciding whether to approve the settlement. This statement of interest was what the DOJ asked the court to wait for.
In the Statement of Interest, the Department of Justice conducts a critical examination of buyer agent commissions, suggesting that a transformative approach to real estate transactions is needed. The Department critiques the current practice of seller-offered commissions to buyer brokers for maintaining artificially high fees and stifling competition. It does not think the proposed changes in the settlement go far enough, stating, “as long as sellers can make buyer-broker commission offers, they will continue to offer ‘customary’ commissions out of fear that buyer brokers will direct buyers away from listings with lower commissions.” Their alternative? The DOJ states, “the parties could propose an injunction that would prohibit sellers from making commission offers to buyer brokers at all. That injunction would promote competition by empowering buyers to negotiate directly with their own brokers.” Ah, what I’ve been predicting for some time now, that a real estate agent will only be able to be paid by their client.
While this case is in Massachusetts and does not directly impact the St. Louis real estate industry, industry leaders throughout the country have been anxiously monitoring the suit to get a better idea of what the DOJ is going to want from the industry as a whole, which I think we clearly see with this filing.
Statement of Interest of The United States – Nosalek v MLS PIN
Recently, the real estate industry has found itself under increasing legal scrutiny, with multiple lawsuits challenging established norms. A critical point of debate is the REALTORS’ Clear Cooperation Policy. This policy mandates that within one business day of marketing a property to the public, agents must list the property on the MLS. While designed to promote transparency and cooperation among real estate professionals, it’s worth asking: Is this policy partly to blame for the industry’s legal challenges, or does it genuinely foster a fair and open market in compliance with the Sherman Antitrust Act?
The Sherman Antitrust Act, a cornerstone of U.S. antitrust law, prohibits any contract or combination that restrains trade. The Clear Cooperation Policy, by restricting agents’ freedom to market properties outside the MLS, potentially limits competition. Centralizing all listings within the MLS could be seen as creating a monopolistic environment, contrary to the principles of free trade the Sherman Act seeks to protect. On the other hand, proponents argue that the policy ensures equal access to property listings for all agents, thereby benefiting consumers by offering a comprehensive market view.
As legal battles unfold and regulatory bodies like the DOJ and FTC weigh in, the real estate industry awaits clarity. The coming months are crucial, and they will likely reveal whether the Clear Cooperation Policy aligns with the ethos of the Sherman Antitrust Act or contradicts it. As we navigate these complex legal waters, stay tuned to St Louis Real Estate News for the latest developments and insights. We’re committed to keeping you informed about how these critical issues will shape the future of real estate marketing and market fairness. Moreover, you can rely on the professional agents at MORE, REALTORS. They possess not only the knowledge and expertise to navigate through all the rules and regulations but also deliver exceptional results to their clients.
Highlights of the Clear Cooperation Policy
Mandatory MLS Listing: Properties must be listed on the MLS within one business day of public marketing.
Scope of Public Marketing: Includes flyers, yard signs, digital marketing, and more.
Office Exclusive Listings: Allows keeping listings off the MLS if not publicly marketed.
Filing Requirement: All exclusive listings must be filed with the MLS if publicly marketed.
Enforcement: Imposes fines and reporting mechanism for non-compliance.
Key Components of Sherman Antitrust Act Relevant to the Policy
Restriction on Trade: Prohibits practices that restrain trade or commerce.
Legal Consequences: Includes fines and imprisonment for violations.
Focus on Competition: Aims to maintain free and competitive markets.
Application to Real Estate: Includes practices affecting inter-state commerce.
Interpretation in Courts: Requires judicial determination on trade restraints.
The real estate industry stands at a pivotal juncture, where longstanding practices are being questioned and re-evaluated. Central to this introspection is the structure of the Multiple Listing Service (MLS), a tool indispensable to our trade. Current legal challenges (such as the Sitzer v NAR lawsuit) and scrutiny from the Department of Justice, particularly concerning policies like clear cooperation and offers of compensation, have brought to the forefront a crucial question: Is the current MLS system, tied as it is to REALTOR® association membership, serving the best interests of our clients and the industry?
The traditional model, which intertwines MLS access with REALTOR® association membership, implies that an agent or broker not aligned with the REALTOR® association is denied access to the MLS. This setup, while historically effective in maintaining a standard of practice and ensuring a level of oversight, now faces criticism for potentially limiting competition and choice in the market.
In the St. Louis area, like in many parts of the country, this structure has been the bedrock of real estate transactions. The MLS, governed and in many times owned by REALTOR® associations (such as is the case in St Louis), has long been a symbol of professional adherence to ethical standards and cooperation. However, the landscape is changing. The industry is evolving with technology and a more informed consumer base, leading to questions about whether this model still serves its intended purpose effectively.
Recent events have brought to light concerns about whether these practices stifle competition and limit consumer choice. The clear cooperation policy, for instance, mandates that all listings be made available to all participating MLS members, tying access closely to association membership. The question arises: does this limit the ability of non-association brokers to compete fairly, subsequently negatively impacting the consumer?
In an ideal scenario, the MLS should be a tool that enhances the market by ensuring wide visibility of listings, fostering competition, and upholding professional standards. But when access to this crucial tool is contingent on association membership, we must ask if we’re inadvertently creating barriers that go against the very principles of open market competition and consumer choice.
As we delve deeper into this issue, a compelling argument arises for decoupling the MLS from REALTOR® association memberships. Such a change could potentially open the market to a broader range of professionals, encouraging innovation and perhaps even leading to improved services and tools. This decoupling could also align with antitrust laws, addressing legal concerns around competition.
However, this proposed change is not without its challenges. The association-MLS model provides a framework for ethical standards and professional conduct. Decoupling might require the development of new systems to ensure these standards are upheld, which could be complex and resource-intensive.
While currently there are more questions than answers with regard to the issues of race, I think one thing that is certain is that we are likely to see changes to the current system on some level in the coming months.
Why This Webinar Is Critical for Your Career The Sitzer v. NAR verdict marks a significant turning point in our industry. This webinar is crafted to help you understand and leverage these changes for your professional growth. Expect to gain:
Comprehensive Insights on the Sitzer v. NAR Verdict: Delve into the verdict’s details and its broader legal implications.
Industry Impact Evaluation: Discover how these shifts will influence your business and the real estate market at large.
Strategies for Navigating Change: Learn effective ways to adapt and thrive in the evolving real estate environment.
Exploration of Innovative Tools: Uncover cutting-edge resources to enhance your business operations and market analysis.
Panel of Experienced Voices As your host, Dennis Norman, with 45 years in the St. Louis real estate scene, I aim to share insights that blend practical experience with strategic foresight. Joining me are my business partners, John Williams and John Donati, both seasoned professionals with deep insights into these recent developments. Our collective experience in leadership within the REALTOR® organization and MLS will provide you with a rich perspective on adapting to industry changes.
Growth and Networking Opportunities This webinar is more than a learning experience—it’s a platform for professional growth and networking with peers dedicated to excellence and adaptation in real estate. It’s an avenue for you to connect with trends, tools, and strategies that will define the future of our industry.
Reserve Your Spot Now Ensure your participation in this pivotal discussion by securing your place at the webinar. Visit MORETrainingCenter.comor scan the QR code below to register. Let’s embark on this journey of growth and adaptation together in the St. Louis real estate market.
Seller impersonation fraud, also known as deed fraud, is a growing concern in the real estate industry. This type of fraud involves forging the property owner’s signature to illegally transfer ownership of the property. A recent case in the City of St. Louis serves as a cautionary tale for homeowners.
A Disturbing Case in St. Louis
Bernadette Brown, a member of the Royal Realty Group LLC, recently discovered that a property owned by the LLC at 1129 Penrose Street, St. Louis, MO 63107, was conveyed to Keith Brown via a Quit Claim deed. Bernadette Brown claims her name was forged on the deed, which was then notarized by a non-existent notary. This alarming incident underscores the need for homeowners to be vigilant in monitoring their property records.
How to Protect Yourself
Fortunately, there are several ways homeowners can protect themselves from becoming victims of deed fraud:
Property Fraud Alert Services
Many counties offer free services that alert property owners when deeds or other documents related to their property are filed. Property Fraud Alert is one such service, available in 23 counties in Missouri, including the City of St. Louis, St. Louis County, St Charles County, Jefferson, and Franklin. These alerts can serve as an early warning system, allowing you to take immediate action if you suspect fraudulent activity.
Title Reports
If you have concerns about your property, you can order a title report from a local title insurance company for a modest fee. M&I Title* in St. Louis, MO, is one such company that can provide this service. A title report will confirm the name under which the property is registered and identify any deeds of trust against it.
REALIST Reports
Agents from MORE, REALTORS can assist you by pulling a REALIST report from the MLS at no charge. This report will provide some basic information about your property, offering another layer of protection against fraud.
For more insights and advice on the St. Louis real estate market, stay tuned to StLouisRealEstateNews.com.
*Disclosure: I have a financial interest in M&I Title.
According to the latest MLS data reported by MORE, REALTORS®, there is currently a 1.38-month supply of homes for sale in the 5-county core market of St. Louis. While this may not seem like a significant inventory, it’s worth noting that for the past few years, the supply was below half a month. It gradually increased to over one month and reached 1.38 months at the end of September. This represents the highest level of inventory, based on months’ supply, that the St. Louis area has seen in over three years. However, this is still well below the historical norm of a 4 to 6-month supply.
Home sales for 12-month period ended September 3oth were, as the report below shows, down nearly 20% in the St Louis area and home prices were up 3.77%.
Below is the St Louis Real Estate Market Report for June 2023 for the City and County of St Louis combined from St Louis Real Estate Search (the Official site). You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below.
In the relentless tug-of-war that characterizes today’s real estate market, it’s imperative not to base your choices on misguided data!
The present property market leaves little room for errors, thanks to a deficit of listings and aggressive buyer interest. A combination of these factors has sparked not just bidding contests, but “conditions wars”, making the process exceedingly tough for many. To outshine the competition, buyers often eliminate contingencies from their bids and stretch their financial limits. Frequently, they’re ready to pay a premium beyond the property’s actual worth. As I elaborated in an earlier article, “Are Today’s Homebuyers Exorbitantly Overpaying and Setting Themselves Up for Regret?“, this strategy can be valid, as long as it’s backed by well-informed reasoning.
In order to make such informed decisions, one needs reliable data and a seasoned, professional real estate agent capable of dissecting that data and tailoring it to your specific circumstances. This is what makes me incredibly proud of our team at MORE, REALTORS®. Our representatives are experienced professionals adept at steering both buyers and sellers towards a rewarding outcome amidst the complex dynamics of the current market.
To assist our representatives and clientele, I devote substantial time to accumulating, examining, and disseminating market intelligence and data. My goal is to offer the most exact data possible, enabling shrewd, educated decision-making. Although no data set can claim absolute precision, inching as close to perfection as we can substantially boosts the probability of making prudent decisions.
Doesn’t every agent have the same data at their disposal?
It’s a reasonable assumption that all agents, particularly those affiliated with REALTORS®, can access the same information. In our region, every REALTOR® can indeed tap into the broadest and most detailed reservoir of data for the St. Louis residential real estate market — MARIS, the REALTOR® Multiple Listing System (MLS). However, merely gaining entry to this database is just the initial step. It’s similar to the internet: although nearly any data you desire is available online, the real test is in knowing where to look and identifying the most credible sources. This same notion applies to the property market data present in the MLS.
While most agents aren’t data enthusiasts and usually rely on consolidated data shared by others, our agents, to some degree, follow a similar pattern. Yet, they stand out due to their proficiency in setting parameters and producing bespoke reports for their clients using our exclusive software. Additionally, they don’t merely accept the data we deliver — they scrutinize it, cross-check it, and pinpoint any discrepancies they come across. This degree of dedication, though humbling, reflects their commitment to precision, even when dealing with data from a dependable source like our firm..
Below is the St Louis Real Estate Market Report for May 2023 for the City and County of St Louis combined from St Louis Real Estate Search (the Official site). You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below.
In this competitive market don’t make decisions based upon bad data!
Today’s real estate market is unforgiving for homebuyers, driven by a scarcity of inventory and robust buyer demand. This, coupled with not just bidding wars but “terms wars”, has made it challenging for many. In an effort to stand out, homebuyers are waiving contingencies from their offers and pushing their budgets to the limit. Quite often, these buyers are willing to pay more than the actual worth of the property. As I previously addressed in my article, “Are Homebuyers Today Grossly Overpaying for Homes and Making Decisions They’ll Regret?“, this approach is acceptable, provided it’s a well-informed decision.
To make such decisions, you need accurate data and an experienced, professional agent who can interpret that data and apply it to your unique situation. This is why I take immense pride in our team at MORE, REALTORS®. Our agents are skilled professionals who can guide both buyers and sellers through the intricacies of the current market to a successful outcome.
To support our agents and clients, I invest considerable time in gathering, scrutinizing, and reporting on market information and data. I aim to provide the most precise data possible to empower smart, informed decision-making. While it’s true that no data can be 100% accurate in all respects, getting as close to that ideal as possible improves the odds of making sound decisions.
Don’t all agents have the same data?
It’s logical to think that all agents, especially those who are REALTORS®, have access to the same data. Indeed, in our area, all REALTORS® can access the most extensive and comprehensive source of information for the St Louis residential real estate market — MARIS, the REALTOR® Multiple Listing System (MLS). Yet, simply having access to this wealth of information is only the first step. It’s akin to the internet: while you can find nearly any information you seek online, the real challenge lies in knowing where to find it and determining the most accurate sources. The same principle applies to real estate market data available in the MLS.
While most agents aren’t data nerds and often depend on aggregated data provided by others, our agents, to some extent, do the same. However, a notable difference lies in their ability to define criteria and create their own reports for their clients using our proprietary software. Furthermore, they don’t simply accept the data we provide — they scrutinize it, cross-verify it, and highlight any errors they discover. This level of commitment, while humbling, is a testament to their dedication to accuracy, even when the data comes from a trusted source like our company.
Copy and Paste Culture Among Many Agents...
Contrary to the scrutiny that our agents apply to our data, many agents merely copy and paste infographics or reports they receive, without cross-checking the information. Take, for example, the infographic below showing the median sale price of homes in May 2023 for the city and county of St Louis combined as $255,000. Yet, numerous agents are sharing a report that states the median sale price for that market in May was $285,000. That’s nearly 12% higher than the actual figure, a discrepancy I deem significant. If you’re a buyer basing your offer, even partly, on market data, wouldn’t it be better to know the median price is actually $255,000 and not $285,000? Your next question might be, ‘How do you know your data is accurate?’ I’ve discussed this in detail in a previous article, which remains applicable today.”
First and foremost, let me emphasize that home selling methods and practices are not a “one size fits all” approach. There are certainly situations where a different or unique strategy is required, including, in extreme cases, one that may not be in the seller’s best financial interest but favors a higher priority for the seller. For instance, I once handled a home sale for a woman with a stalker ex-husband who wanted her home sold discreetly – no sign, no ads, no MLS, etc. In her case, privacy and conducting the sale “under the radar” for her personal safety were more important than money. This article addresses the broader market and my opinion will apply to most sellers looking to sell their homes.
Now, let’s discuss an “office exclusive” listing.
Understanding this concept is a great starting point and highlights one of the reasons I’ve been writing articles about St. Louis real estate, St. Louis REALTORS®, and the St. Louis real estate industry. I believe that, in general, consumers lack sufficient knowledge about these matters to make the best choices for themselves when selecting agents to work with. As a result, I aim to share the insights I’ve gained from over 40 years in the industry. For example, most non-agent readers may not know what an “office exclusive” listing entails or whether it’s advantageous or disadvantageous for them as sellers. So, what is an office exclusive listing? In short, it’s a listing that the agent will “keep secret” to a large extent, only informing agents within their real estate brokerage and withholding your listing from the REALTOR® Multiple Listing System (MLS). Consequently, your listing will not be distributed to the thousands of websites that obtain listing information from the MLS (Zillow, Realtor.com and StLouisRealEstateSearch.com?agent_id=02107 to name a few).
Let me begin by saying that I’m not a sensationalist, nor am I an advocate for everything I write about. Additionally, I am not an attorney, so this not a legal opinion. I am simply a real estate broker that has been very active in the profession and industry for over 40 years now. I strive to stay on top of industry and market changes so that the agents in our firm, MORE, REALTORS®, and their clients can avoid surprises and be prepared. Another reason I do this is to share what I have learned with consumers. I believe that by sharing good, relevant and accurate information to consumers, they will be equipped to make better decisions when it comes to buying or selling real estate, including how to choose an agent to best represent them.
So, what is going to turn the real estate industry upside down?
Yes, I made a rather bold statement in my headline, but I believe it to be an accurate depiction of what is coming to the world of residential real estate, including right here in St Louis. The source of this disruption is not a single entity, but rather many. While there is a common theme to the multiple threats, they are coming from different sources. Over the past few months, I have written about all the issues I’m referring to, so below is a summary of them and links to the original articles:
Moerhl v NAR Lawsuit. 3/22/2019 – This suit was filed against The National Association of REALTORS® (NAR), Realogy Holdings Corp, HomeServices of America, Inc, Re/Max Holdings, Inc and Keller Williams Realty, Inc. The suit alleges that the defendants were “conspiring to require home sellers to pay the broker representing the buyer of their homes, and to pay at an inflated amount, in violation of federal antitrust law.” At the heart of this claim is the NAR rule that requires sellers to offer compensation to the buyer’s agent in order to be eligible for listing in the MLS.
Department of Justice (DOJ) Complaint against NAR. 12/01/2020. The DOJ filed a complaint against NAR, as well as a settlement agreement, focused on two primary issues; 1. Allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; 2.Enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential home buyers;
Below is our St Louis Real Estate Market Report for September 2022 for the City and County of St Louis combined. You can access the full infographic, containing data for St Charles, Jefferson and Franklin Counties as well by clicking on the image below. Worth noting and remembering is not all data is created equally nor is all of what you see reported accurate. Given the challenging and rapidly changing economic times we are in which are having an direct impact on the St Louis housing and real estate market, now, almost more than ever, you need to be sure the data you base your real estate decisions on is accurate and the agents you are trusting to get you through the process have the knowledge, information and accurate data they need to do so. At MORE, REALTORS® we have developed proprietary software which uses the database we have created from the REALTOR® MLS (MARIS) to produce what we believe is the most accurate and relevant data and reports for the St Louis residential real estate market. For example, currently, there are other sources reporting (and many, many real estate agents sharing the information without verifying) that the median price for homes sold in the City and County of St Louis during September was over 6% higher than our data shown below. Think what an impact that could have on you if you base your decision to buy or sell a home on pricing data that is over stating the value.
Oh, how do we know we’re right? We have proof, straight from the MLS, see the image below our infographic which is a screen shot straight from the MLS showing date for closed sales during the month of September in the city and county of St Louis. You’ll find that the median price from the MLS is $250,000, the same as our data computed, the number of sales is a little higher in the MLS (20 or just over 1%) because while about 99% of sales are sent out in “feeds” to broker websites etc (including Zillow and Realtor.com) there are a few listings that are not and the DOM (days on market, or days to sell) at 10 is very close to our 12 (this is due to us using a slightly different method to compute median for the data).
St Louis Real Estate Report for September 2022
(click on infographic for complete report including other counties)
Maybe you’ve received an unsolicited offer recently to buy your home via email or postcard from Opendoor, a home buying firm. OpenDoor will make an offer on your house, bypassing the traditional method of selling your home via a REALTOR® using the MLS (which reaches 13,000+ REALTORS®) and entices you with catchy phrases on their website like “Get an instant offer and get paid” and “Skip showings and repairs”. It can sound good and SIMPLE but, according to the FTC complaint against OPENDOOR LABS, Inc. (Opendoor) and the agreement and consent order, “…consumers who sold to Opendoor have lost money compared to what they would have received through a traditional sale.”
According to the latest data from HUD and the US Census Bureau, there is a 9.3 month supply of new homes for sale in the U.S. as of June, 2022. As the chart below illustrates, this is the largest supply of new homes for sale since May 2010 when there was also a 9.3 month supply. It wasn’t that long ago, August 2020 to be exact, when the supply hit a record low level of 3.3 months.
St Louis New Home Supply is a little lower…
It’s a little hard to pinpoint the new home supply in St Louis for several reasons. One, not all new homes that are for sale are listed in the MLS and then the MLS allows new homes to be listed in two categories, both new construction and normal residential, so that can skew the data as well. Nonetheless, we do the best we can to sort through the data. As our table at the bottom shows, there is currently a little over a 7-month supply of new homes for sale in St Louis, so still higher than a historical “norm” but about 2-months less than at the national level.
If you’re heard it once, you’ve likely heard it a hundred times, “all real estate is local”. This is why you can’t put too much faith in national news or data if you are interested in buying or selling a home in St Louis. This is also why at MORE, REALTORS®, we put so much time, effort and money into producing the best and most accurate local data we can. We think it’s important to bring the data and information down to the local level.
“Homebuyers are canceling deals at highest rate since start of COVID” was the headline earlier this week on Inman News, an online real estate industry publication read by many brokers and agents. My usual response to news like this is “I wonder if that’s true in St Louis?” and I set out to pull the data to see.
There is not really a way to count “canceled” deals…
While I don’t know exactly what the writer of the Inman article was referencing in terms of “canceled” deals. However, in a typical contract to purchase a home in St Louis only gives the purchase one way to “cancel” a contract and that is in the building inspection contingency where the purchaser has the right to terminate the contract for no reason. When that happens it is not reported to the REALTOR® Multiple Listing Service (MLS) as a “canceled” listing however, it is simply put back on the market. There are certainly other reasons contracts fail and listings come back on the market such as the buyer’s inability to get financing, appraisal issues, etc.
In an article published yesterday, I referenced the Sitzer vs National Association of REALTORS law suit and said I would have a more in-depth discussion about that suit and here it is. The lawsuit was filed by Joshua Sitzer, Amy Winger, Scott and Rhonda Burnett and Ryan Hendrickson on June 21, 2019 against the National Association of REALTORS® and the parent companies of major real estate companies and franchises including Coldwell Banker, ReMax, Keller Williams and Berkshire Hathaway Homeservices.
The Sitzer lawsuit was filed in the United States District Court for the Western District of Missouri sought to be certified as a class action lawsuit on behalf of “all persons and entities who listed properties on one of four Multiple Listing Services…and paid a broker commission from at least April 29, 2015 until the Present…“. The four MLS’s listed in the suit that this applies to are:
Heartland MLS (Kansas City, MO)
MARIS MLS (St Louis, MO)
Southern Missouri Regional MLS (Springfield, MO)
CBOR MLS (Columbia, MO)
Last Friday, April 22, 2022, Stephen R. Bough, a Federal Judge for in the Western District of Missouri, issued an order granting the class action status for the lawsuit the Plaintiffs sought.
The past several days have not been good for the National Association of REALTORS® (NAR) from a legal perspective at least.
First, last Friday, April 22, 2022, Stephen R. Bough, a Federal Judge for in the Western District of Missouri, certified a lawsuit against NAR as a class action suit.The suit, known as the “Sitzer” suit as the original plaintiffs were Joshua Sitzer and Amy Winger, alleges that the defendant, the National Association of REALTORS® “created and implemented anticompetitive rules which require home sellers to pay commission to the broker representing the home buyer“. The plaintiffs in the suit also allege that the other defendants, which include Realogy Holdings Corp, Homeservices of America, Inc., Re/MAX LLC and Keller Williams Realty, Inc., “enforce those rules through anticompetitive practices.” I believe this action by the court was expected and likely did not come as a surprise to anyone but it was not good news for NAR or the other defendants. In the coming days I’ll be doing an in-depth article on this one.
Then, yesterday, the United States Court of Appeals for the 9th Circuit delivered another and this time, a likely unexpected, blow to the National Association of REALTORS® in the form of a reversal of a suit against NAR that had been dismissed previously by a lower court. The suit, PLS.com v. the National Association of REALTORS®, is another suit alleging anti-trust violations by NAR and the other defendants which are all MLS’s. The suit was brought originally by PLS.com as a result of NAR enacting its “Clear Cooperation Policy” which for all intents and purposes, dictates to agents and brokers how and when they can market their listings. I’ve written several articles specifically on this policy in the past which can be found using the following links:
What an interesting real estate market we’ve experienced in St Louis over the past few years! Seller’s fully expect their homes to sell the first weekend after hitting the market, with a feeding frenzy by buyer’s and bidding wars that drive the price above the list price. Buyer’s come to realize if they are going to be successful in buying a home they have to think fast, take chances and move quick! Heck, with a market like this, it’s no wonder a lot of folks, particularly sellers, don’t necessarily see a need for a real estate agent.
However, the reality is that sellers and buyers need a great agent now more than ever. Yes, I emphasized great as, like in any profession, there are varying levels of knowledge, experience and professionalism among real estate agents. In addition to having a great agent that agent needs timely, accurate market data, along with an understanding of the market resulting in complete market knowledge. Unfortunately, this combination is not easy to find.
In spite of the challenge of a low-inventory housing market, St Louis City and County, St Charles County and Franklin County all saw double-digit increases in the number of homes sold in April while Jefferson County saw a double digit decline. As the charts below illustrate, the median price of homes sold in those counties increased from a year ago in all the counties, two of them in the double digits.
Not all housing data is the same….nor accurate for that matter…
One thing worth noting is that there are housing market reports out there from many different sources, including many credible ones that may or may not be accurate. In most cases this is not due to an error on the part of the person or entity sharing the data but a result of either bad data, inaccurate data or misinterpreted data. For example, when preparing to write this article I noticed two different reports on “St Louis” home prices for homes sold in April. One, which indicated it was for St Louis City and County combined, reported $250,000 and one which reported the “St Louis area” was $266,000. In the case of the latter, my first guess was that they were reporting data for the St Louis MSA but when I checked that the actual sold price in April was only $223,750 so I have no idea where the data came from. For the former, the $250,000 median price is not only higher than the median price for St Louis City and County, it’s higher than the median price for the whole MSA and while the source is indicated, I’m not sure how this number was arrived at.
So what does it matter?
In the crazy market we are in where buyers are getting in bidding wars to get a home, I think it’s more important than ever to have good, relevant and accurate data available to your agent so your agent can help you make an informed decision. You ultimately may decide to pay above what you think the current value of the home is but it would help to know what the real value is. If you look at my chart below for St Louis City and County you’ll see the median price of homes sold in April was $230,000 which is quite different than the $250,000 price and $266,000 I saw reported elsewhere. Would being $20,000 – $36,000 off on the value matter to you? I think it might.
So how do I know I’m right?
Well, for starters I’m a data junky and for the past dozen or so years I’ve probably spent, on average about a dozen hours a week or more studying market data for St Louis. In addition, for the past 6 or 7 years we have worked to develop our own proprietary software to compile and report housing data and are constantly checking and double checking the output. Finally, we have a very credible source for data, the REALTOR® MLS and we constantly update and check the data. Put all of this together and while there’s no way to say it’s 100% correct, but I’m confident it’s about as close as you can get.
I have a lot of people ask me about what to invest in and how.Not every time, but often, the self-directed IRA investments can be great options for people that are in the real estate industry.For this post, I wanted to go over the basic concept and give some actual real-life examples.Once you read this, if you still need help or have questions, you are more than welcome to reach out.We are here to serve and help!
What is an IRA and what does a “self-directed” IRA mean?This is an Individual Retirement Account.There are two options:
Roth IRA – contributions are post-tax and then the growth is tax-free for life
Traditional IRA – contributions are pre-tax and then the growth deferred
During the 2020 year, you can contribute $6k a year and add $1k if you are over 50. There are income limits for contributions for the Roth IRA and the tax-deductible traditional.However, you can always contribute to the traditional but the income limit determines if the IRA is tax-deductible or not.All traditional IRA’s are tax-deferred.The Roth IRA is the only tax-free growth IRA.
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Last week, 
Panel of Experienced Voices As your host, Dennis Norman, with 45 years in the St. Louis real estate scene, I aim to share insights that blend practical experience with strategic foresight. Joining me are my business partners, John Williams and John Donati, both seasoned professionals with deep insights into these recent developments. Our collective experience in leadership within the REALTOR® organization and MLS will provide you with a rich perspective on adapting to industry changes.
So, what is going to turn the real estate industry upside down?
