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(continued from last week)
Dear Dave,

Wow, holy headlines!  Can you please give your insight into this new real estate lawsuit and if it’s really “The biggest shake up in real estate in the last 100 years.”  I’d love to get your thoughts on it!

Bob – Mack, CO

Installment #3.

Let’s get down to the “unintended or intended consequences” and ultimate loser of this proposed NAR settlement!

The ultimate loser in all of this is the consumer, the very people this settlement is supposed to help!   Maybe all this is about “better and more transparent disclosure”, but despite the rhetoric, what it does not accomplish is protecting the consumer and providing them a path to affordable housing.  The consumer is who will be penalized the most… particular the entry level price points, first time home buyers who are at the center of the “affordability war”.   In a time when 56% of Americans cannot afford a $1000 emergency fund, how many do you think can afford to pay their buyer’s agent?……at least if they want a good one that might really look out for their best interests and not be a glorified door opener.    Buyers are already paying moving costs, closing costs, down payment, and various other costs incurred when moving.  When you add an agent fee on top of it you potentially eliminate them from having the opportunity of home ownership…..maybe that is the ultimate goal.  Food for thought……maybe the goal is to remove enough of the potential buyer pool that you drive overall home values down to achieve the affordability you seek to create.  Maybe that is the desired back door to make up for the housing shortage and runaway costs.  Build as many rentals as possible so people have “affordable housing” and create an environment where “home ownership” is only for a few…notice the difference in semantics “affordable housing” vs. “home ownership”…..but I digress.   

Listen, everyone seems to agree that we need an affordable path to home ownership, however adding on more out of pocket fees does not seem like the way to accomplish that if that really is the goal.  Costs are skyrocketing across the board, but the lack of affordable housing has very little to do with commissions and everything to do with development red tape raising costs and causing delays, building codes, government oversight, supply chain issues, worker shortages, high-interest rates, high insurance costs and the list goes on and on.  Ask any builder/developer and they will tell you that their costs have soared 20-25% in the past 5 years.  Let’s do the math, of all the issues obstructing affordable housing, the least of them is real estate commissions.  We have seen this movie before, but through a different lens.  In the end it is these types of decisions that are sold as being done in the name of consumer advocacy that leads to a wider wealth gap between the haves and the have nots. 

I know the rebuttal here…..why listen to the real estate agent talk about real estate commissions?  You don’t have to listen, or agree, but I believe the people who lose are the same people who seem to typically lose…….the working class are already struggling to get ahead.  Real estate commissions are built into the home price and paid by the seller and when that seller goes to buy another home, they will get the same benefit in return……it is a cycle that balances out from one move to the next.  Next week we will tie it all together!

Dave Kimbrough
The Kimbrough Team



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