DOJ v. NAR and the Ethics of Real Estate Commissions

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Today’s HousingWire Daily presents the first ever episode of Homes in Motion, a US real estate miniseries hosted by Senior Real Estate Reporter. Matthew Blake

In our first installment, we discuss what lies ahead for Houses in Motion and chat with HousingWire Managing Editor James Kleinmann about Ministry of Justice the recent step towards withdrawing from the settlement with National Association of Realtors

We also interviewed Max Besbris, Associate Professor at the Department of Sociology University of Wisconsin-Madison and the author Boosting Sales: Estate Agents, Prices, and Inequality Between Areas.

Besbris discusses the skirmish between the Justice Department and the NAR, as well as broader economic incentives driving both real estate agents and consumers.

Here’s a small preview of the interview, which has been slightly edited for clarity:

Matthew Blake: Do you think agent commissions determine their behavior? Or do you think agents would behave in the same way if it were a salary-based model?

Max Besbris: I think the answer is complicated. To be sure, there are plenty of studies that show that real estate agents are not necessarily motivated to raise their prices because most people are quite limited in the amount they can spend.

So, in general, past research has shown that real estate agents, instead of trying to raise prices for individual transactions, are trying to conduct as many transactions as possible. They are interested in volume and speed, in particular, they want to sell houses very quickly.

HousingWire Daily reviews the most interesting articles published by HW Media. Every day, we provide our listeners with a deeper look at the stories that appear in our editorial office and help move the markets forward. Organized by the HW team and produced by Alsinna Lloyd and Elissa Branch.

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