DOJ's Real Estate Crackdown: Implications for Fair Housing

All right, friends, we're still dealing with this proposed settlement in real estate. And this is, of course, wave number 1, because we have so many more lawsuits burbling around out there. And we have a very vicious DOJ attacking organized real estate, attacking property rights, and attacking hardworking realtors. So what do we need to be focused on? I will tell you, one of the concerns that I have has to do with fair housing. Now, before you turn off this video, because I know some of y'all think, I don't want to talk about this, you need to be wildly aware of what's going on, because fair housing is more than just a bunch of checkboxes for protected classes. It's about making sure that anybody who is a citizen of this country has an opportunity at the American dream when it comes to housing. Now, why does that matter? Think about this, y'all. Real estate is the fifth biggest piece of GDP. That's a lot of the American economy. And it's where most people have their home savings, their life savings, their only chance at a reasonable retirement lies in their primary residence. We have the data, it goes back for years and years, that an adult who gets through life as a renter will accumulate on average $6,000 in savings. That's $6,000. Because yes, Americans don't save very well. We're very materialistic and We've got a lot of budget leaks in the form of iPhones and fingernails and things that we maybe should pull back on. But hey, we just enjoy things, and there's nothing wrong with enjoying life. However, when you hit the age where you can't work anymore, most people would like to be able to enjoy and relax and look back on a fruitful working life. Now, that same person at the age of retirement, if they own a home, their number's closer to $300,000. Now, that number is fluctuating right now when you look at the data points simply because equity has gone up so much since the COVID era started. Now look at that, it's a pretty stark difference, $6,000 versus $300,000. That's a lot of money. And for most people, that $300,000 is not liquid. It's not laying around in a safe in the bedroom or buried in mason jars in the backyard. It's the equity in their home. Now it's something that can be tapped in the form of home equity lines. People can take out a note against the house. They can do a reverse mortgage. They have collateral. Most importantly though, when you own that home, after that 30-year note is paid off, and a lot of people love celebrating, talk about some happy moments as a realtor when somebody pays off their note. They now just have to worry about taxes and insurance, which is a topic for another day. But the renter over here is continually experiencing rental increases. They don't get out of the house payment. They don't get out of the rent payment. It doesn't just go away over 30 years. They're continually paying somebody else's mortgage. So when you look at that, you realize what a big deal the primary residence is. Let's start there. The primary residence is, for most people, their savings. Now, a lot of the negative Nancys on the internet are going to say it's forced savings. Well, yes, it is forced savings, but I'm okay with that because until we instill better disciplinary savings habits in ourselves and in our kids, I'm okay if my neighbors get forced into having a better retirement, because that's more reliable than Social Security or anything else, because inflation is eating everything alive. Okay, now when you think about how important this is, those numbers, they're agnostic of any of the protected classes, they're agnostic of skin color, who you're sleeping with, what language you speak, where you came from. The numbers don't care. The numbers say if you own a house, you're over here, and if you don't own one, it's harder to get there. So why am I concerned about the challenges that we're facing under these settlements? Understand this, friends. In fair housing, every REALTOR® represents somebody, whether it's buyer or seller. And typically REALTORS® represent somebody within their close quarters, their community, somebody from church or from the hair salon, the grocery store, the PTA. They might go for a run with them, volunteer with them over here. We just know people, family, friends, cousins. That's your, your little circle of people. You're serving your little circle of people. And when they want to buy or sell something, in the past, our Multiple Listing Service has allowed you, the REALTOR® who knows this little tiny circle of people, to put what they have to sell into the system to be seen by all of your colleagues so that each one of your colleagues whose circle is being served by them They get to see what you're putting into the system. It is the broadest array of outreach for that listing. And when it comes to buying, this agent serving your little circle of people, you get to take their needs and go shop in the broadest possible pool. That's what our Multiple Listing Service represents. It is a free and fair marketplace that doesn't care if the agent has sold zero houses or 40,000 houses. The system does not care if you have any preference at all or look like anything. The system just says, have you paid your dues or not? Hey, hey, you're in, you're out. And then you have access to everything. The other beauty of that is that as the agent, when you're able to shop on behalf of your buyers, you were guaranteed cooperative compensation. Now those numbers were all over the place. They weren't all the same number. They weren't all some it's something that you were comfortable with, because your buyers may pay you something different. But there was something out there that was offered to every agent regardless of who that agent is. It was very fair. Actually prohibited boycotts, actually stopped discrimination amongst agents, because you couldn't say, well, this one agent, I don't like her, she cannot get paid on my listing. No, if you offer it to one, you offered it to all. That's very fair. So my concern comes in because as compensation goes away from our Multiple Listing Service, and that's happening in all of our systems around the country by the middle of August, that means if your seller's offering compensation, you're offering it. It's right here. It's hidden in your little hand. So now an agent calls you and says, hey, is your seller willing to compensate my buyer? You're like, well, I don't like her. Tell them no. No, we ain't paying you nothing. And then you get another phone call from somebody over here and say, Oh, I like him. We'll give him the whole compensation. The agent on the listing side and the seller are going to be able to evaluate based on who's calling in whether or not they say yes. Now, I'm not saying that's right. I'm saying that's possible because there will be a complete lack of transparency. Now, how will we ever prove this? I don't know that we'll be able to prove it unless you get a string of text threads and phone calls that you can subpoena out of somebody's hands, but that's sure a bad lack of privacy, and you probably don't have a warrant for that. But just think about this, y'all. It's entirely possible that you could have a vindictive agent out there that refuses to call anybody back except for this one friend over here, or maybe this brand over there. That's what concerns me about fair housing, because what that means is this agent who serves this little circle of people, suddenly this agent and the people she serves don't have the same access. That's not fair and equal. That is probably going to hurt the consumer, especially when we're thinking about the most competitive marketplaces. Now, every market's not the same. Some are moved into a buyer's agent stasis like Austin, Texas, and some have continued to stay hot like Raleigh, North Carolina. So you see different market conditions everywhere, and we have different agents everywhere. We're going to see different results everywhere. I'm really concerned about what that means. So what my challenge is to you, if you're the person who's now feeling your blood pressure rise a little bit, first of all, make sure that you are the best possible example in your REALTOR® marketplace, that you communicate as much as you can with your sellers. Let them know what's changing and then lay down some guidelines. Let them know that, hey, seller friend, if we're going to offer compensation to one, we should offer it to anyone who reaches out because we do not want to discriminate and it's just not good for the public. Go ahead and let your sellers know that you do have that concern. I think it's important that we as professional agents let our clients know when we are absolutely going to fight for fair housing, because fair housing is frankly good for sellers. It opens up their marketplace to more buyers, and it's good for our buyers because they have access to anything they might have the money to purchase. The second thing I want you to do after you communicate with your sellers and build a plan with them is be that communicator with your colleagues, return the phone calls and return the texts. And if you can't, then have a colleague available to backstop you. Maybe you'll be with relocation people for 2 solid days and won't be on your phone. Get a colleague who can take your phone for you and look at your texts and respond on your behalf so that we can keep our markets very open, very active, and in the best possible place for buyers and sellers. To me, that's what it means to serve every neighbor in every zip code, that we don't allow the external actions of government agencies or lawyers and judges to upend what we've done that's very good, which is create more and more opportunities for our buyers and sellers to live where they want to live and sell what they want to sell in an effort to pursue the American dream. Now, you should also know there's a third thing you need to do. You need to let your elected officials know that we, the realtors, did not create the possible coming problems that they're going to see. I, for one, would love to know that the Office of Housing and Urban Development, HUD, I would like more consumers and more realtors to reach out to them and say, we don't like that the DOJ has gotten involved in our very fair and free marketplace. And we do not want to see any problems occur. Maybe we should just be louder as a voting group and as a bunch of small micro-businesses and let the government agencies know that we're not going to be pushed around because we don't want to lose opportunities for our buyers and sellers. Because let's just be honest, this is not about money for us. For us, it's about service. And I know this because I talk to realtors all over the country. I know how hard you work and I know how much you love the people you serve. I know that the ones that require the most work and the most handholding are typically the lowest price points you serve, and you wouldn't trade a minute because you know how valuable it is for them. I don't believe that our government sees the clients that we serve in the same light that we do. They are doing a whole lot of condescending talk here about wanting to do good things for those people instead of realizing that realtors have served every neighbor with honor for years. Now, the other thing I want you to remember is this. I learned this on day one when I got into the business, and I'm pretty sure if you're following me, you know a lot about my path in real estate. My dad never believed in discriminating based on price point. My dad taught me that if somebody felt the call, the, well, the urge to call me or reached out to me through my website or anything else, that I should realize what an honor it is to get that phone call, that email. We didn't have text at the time, you know, but now I'm honored to get a text because the consumer could have called anybody. I'm going to challenge you not to look down on the people who are in the lowest possible price points that are going to have a hard time figuring out how to compensate you as a buyer's agent. You just need to go out and fight for them, find ways for them to compensate you that are fair to you and fair to them. And that most of all, don't leave them frustrated to the point where they no longer pursue the American dream. I know some of y'all are luxury agents, and that's wonderful, but being a luxury agent shouldn't mean that you withhold the knowledge and skill that you have from those that are in a lower price point, first-time buyers, people with a little bit of a challenge ahead of them. I'm going to challenge you to dig in and help those people even more, because the last thing I want to see is the next generation winding up as a generation of renters when it's we, the realtors, who've always bridged that gap. So keep bridging that gap and keep your eye on the goal. And you know what that goal is? It's not your pocketbook or mine. That goal is that every neighbor in every zip code have access to the information that they need so they can pursue the American dream if that's what they want to do. And that we stop the government overreach and the regulatory burden that's getting in their way. We can do this and we can fix it, but we can't do it by ourselves. That's you, that's me, that's our consumer public, and we'll make sure real estate is protected.