Above: Tracy Kasper
In her most detailed comments regarding the state of the residential real estate industry since the Burnett vs. NAR federal class action lawsuit, National Association of REALTORS® (NAR) President Tracy Kasper stressed that buyer agents are still as vital to the home-buying process as ever, and cautioned that any deemphasizing of them could result in many hopeful buyers not purchasing homes at all.
In a Dec. 14 interview on CNBC’s The Exchange, Kasper noted that the potential of buyers having to pay upfront costs for representation could have a negative effect on total future home sales in the U.S.
“We’re going to talk about first-time homebuyers, the first-generation and even our middle- and low-income buyers,” she said. “We cannot disenfranchise them simply because they can’t pay out of pocket for professional representation. (Because) then what would happen? Do they come into the market on their own, try to navigate a complex situation with the process of getting from point A to point B and actually closing on the home? What we don’t want to see, and this would be the tragedy of all of it, is that those buyers simply don’t come into the market.”
Kasper explained that she’s also concerned for sellers, who as a result of the Burnett case might find that their homes are not seen by as many buyers as possible in order to get the highest price.
“First and foremost, I’m a REALTOR®,” said Kasper, broker/owner of Berkshire Hathaway HomeServices Silverhawk Realty, in Boise Valley, Utah. “I work with buyers and sellers every single day, and I get to work with my agents. When I heard the verdict that day, my first thought went to my buyers and sellers. Sellers have (agent) options in the market. They’ve always had options, whether it’s a flat fee, an hourly rate or even a percentage. We’ve talked with them and explained how we can help bring more buyers into the market for them.
“The seller wants that. They want as many buyers as possible. That helps them get the best price for their home. Conversely, our buyers, for the most part, struggle to come up with a down payment. They’re struggling to come up with their closing costs in addition to that. And what we don’t want to see is the marginalization of those buyers. That is why we will continue to fight. We want to take care of those consumers.”
The Burnett verdict was the second major issue for NAR in 2023, following a sexual harassment lawsuit and its fallout. In an interview with RISMedia shortly after taking over as NAR president in November, Kasper had vowed to guide NAR into a better place.
“There is a tremendous amount of work ahead of us if we are to strengthen and stabilize NAR for the future, and if we are to ensure that people continue to benefit from the multitude of valuable resources and activities that are available through this association,” she said then. “I know NAR is up for the task, and I intend to work with the leadership team, our executive committee and the board of directors to enact policies and procedures that improve culture, promote accountability and ensure this organization is a force for good in real estate.”
The Burnett trial at the end of October, in which a Missouri jury found that real estate power players conspired to inflate commissions in violation of federal law, has only added to the organization’s turbulence, but Kasper is steadfast in her belief that things will work out, with an appeal planned. She insisted that MLSs still provide consumers the best pathway to find houses, information and more.
“The MLS is the vehicle by which all of us as brokers share information, which is good for the consumer,” she says. “That way they don’t have to be disenfranchised. It’s not fragmented. They don’t have to go look here or go look there. That MLS is also accurate. A lot of the (national) portals, they’re just grabbing data and trying to get the consumer to come to them. But at the end of the day, our rules at NAR and with our MLSs make sure that our data is accurate. We’re making sure that it’s transparent. We’re making sure that we have an efficient marketplace so consumers don’t have to shotgun it and head to one direction or the other, but can go to one place.
“It’s interesting because I hear that buyers don’t need a REALTOR®. They can find their home on the internet and go to the seller and get it bought. But even just that process of finding a home, I can walk in with them and say you qualify for your loan, but the house isn’t going to qualify for the loan. The loans are particular, and we can put that expertise to work for them before they go down a path of heartbreak or expense. Or they’ve paid for home inspections, they’ve paid for an appraisal, just to find out that the house doesn’t qualify.”
Kasper noted that there is still a shortage of inventory, which is another challenge, but that builders are filling the gap in the market and are incentivizing buyers. She pointed out that the market has normalized over the last 18 months with a 4% increase, which is a welcome change.
“We have such a lack of inventory that the builders are the gap fillers,” she said. “They’re the ones that are being successful in the market right now. They’re doing a lot to help incentivize buyers by offering incentives and that sort of thing to help get them in the market. It’s the existing inventory that we really are crunched on. We’re starting to see a normalization of the market, and it’s something that is very welcome.
“To be honest, we were looking for this kind of normalization in 2018, 2019,” she admitted. “We thought 2020 would be that year, but we had the pandemic. So having two years of double-digit year-over-year increases in pricing, that’s really what has stymied the market. So now here we are over the last 18 months and things have normalized. (Prices) have only increased about 4%. Those are the single-digit increases we’ve been waiting for, and they’re here and we’re looking forward to that. That’s a good, normal market.”
