Editor’s Note: The following open letter was written by Jamie Tian, President of the Asian Real Estate Association of America (AREAA) to Judge Stephen R. Bough, who presided over the landmark Burnett class-action lawsuit, and to the U.S. Judicial System.
To Judge Stephen R. Bough and the U.S. Judicial System:
I am a real estate agent with over a decade of experience working in Southern California. Many lawsuits have recently been ruled on or filed regarding the state of real estate agent commissions. Although I cannot speak as a legal professional, I can speak as the elected President of the largest Asian American, Native Hawaiian, and Pacific Islander (AANHPI) trade organization in the country, the Asian Real Estate Association of America (AREAA). On behalf of this organization, and on behalf of the community members that we serve, I am here to voice my concern.
The ruling in the Sitzer/Burnett lawsuit has the power to dramatically shift the real estate industry. The plaintiffs have argued that this change will create lower home prices, and a more affordable home market, especially for newer buyers. However, I strongly urge you to consider the impact your ruling may have on the nation’s diverse communities including the AANHPI community.
As Pew Research shares, Asians are the largest group of new immigrants, and projected to become the largest immigrant group by 2055. Although this group tends to be highly educated, this group has language barriers as only 28% of AANHPIs are Limited English Proficiency (LEP). This means it is crucial for buyers within this community to receive guidance from educated professionals that are familiar with their language, culture and homeownership needs.
It is also critically important to assess which consumers will be most affected by changes to the commission structure. With sellers no longer covering the cost of buyer’s agents, it will then fall to buyers to handle this expense. Wealthy buyers will be able to afford this more easily, but this could pose a significant barrier to lower income buyers. Although AANHPIs have an average median income that is higher than the nation’s median, our community has the highest income inequality among racial groups. Many subgroups within the AANHPI community have an average income and household wealth that is significantly below the average. This means that, for a large part of our community, buyer’s representation will be treated more as a luxury than as a necessity.
This leads to another potential concern. If buyer’s agents are no longer held to the stringent standards of conduct that the National Association of REALTORS® (NAR) maintains, this opens the possibility of exploitation and discrimination. Reduced compensation and lack of certification could also lead to buyers receiving lower quality service. Without the local expertise and access that an experienced buyer’s agent provides, new homebuyers are at greater risk of being excluded from new communities.
Regardless of the effect that the lawsuit will have on the real estate market, it will remain deeply important for AANHPI homebuyers to have the option to seek professional guidance and support.
This lawsuit comes at a time when the American Dream for many Asian immigrants is under attack. Exclusionary bills like FL SB 264 are being considered around the country and limit the real property rights of many within our community; my Chinese parents would not have been able to become homeowners if bills like SB 264 had existed when we first came to America.
These concerns do not, of course, apply to the AANHPI community alone. As Gary Acosta, CEO of the National Association of Hispanic Real Estate Professionals (NAHREP) states, “Buyer-side agents, often sharing their clients’ cultural backgrounds, offer culturally competent representation, language access, and invaluable homebuyer education built on personal relationships…” These issues go beyond the AANHPI community, and raise serious questions for how this lawsuit will all affect marginalized communities.
It is important that, as significant shifts occur in the real estate market, AANHPIs retain their seat at the table. AREAA, with the help of important partners like NAR, will continue to advocate for representation, inclusion, and support for our community.
Sincerely,
Jamie Tian
President, Asian Real Estate Association of America (AREAA)
Well said.
Jamie Tian eloquently articulates the critical concerns surrounding the recent commission lawsuit, emphasizing the potential adverse impact on diverse communities, particularly the AANHPI community. Her insights underscore the importance of preserving fair representation, inclusion, and support for homebuyers amid significant shifts in the real estate landscape. The thoughtful commentary urges a careful consideration of the wider consequences of the lawsuit ruling.