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This is Planet Money from NPR.

0:30

Maybe you've already heard of all the drama

0:32

going down in the real estate industry lately.

0:34

How there have been all

0:36

of these lawsuits about how realtors

0:38

get paid. The big one in

0:40

the news, Burnett versus the National

0:42

Association of Realtors. Today we've got

0:44

the behind the scenes story of

0:47

what went down. It starts in 2019

0:49

in Missouri with a lawyer named Mike

0:51

Ketchmark. What I'm picturing is

0:53

you at your desk, like

0:55

a shingle out front. You open the door

0:57

and a bell rings and somebody walks in and

1:00

is like, have I got a case for you? It

1:03

was my cell phone that went off and one

1:05

of my really good friends in Kansas City

1:07

is a lawyer, Brendan Boulware. And

1:09

he called me on a Monday and said, hey, can I

1:11

stop by your office and talk to you about a case

1:13

I want to get you involved in? And I said,

1:16

sure. Now, Mike was maybe an

1:18

unusual choice to work on something like this.

1:20

He doesn't know anything about real estate law.

1:23

He's actually a personal injury lawyer. I

1:25

represented families usually in

1:27

wrongful death cases where somebody had lost their life

1:29

because of a tragedy of

1:31

a product or a work related tragedy.

1:34

The friend wants him on the case

1:36

because Mike is great in front of

1:38

a jury. He's got this folksy charm

1:40

about him. He uses football and barbecue

1:42

metaphors and he'd won these

1:44

huge verdicts, one for the widow of a truck

1:47

driver who was killed on the job and another

1:49

against a corrupt pharmacist and a

1:52

handful of pharmaceutical companies. So

1:54

the lawyer friend drops by Mike's office

1:56

and pitches him the case. He

1:58

just explained it and told me. the story of

2:01

this couple in Kansas City, Rhonda and

2:03

Scott Burnett, who had bought

2:05

a house. When they went to sell it, they got

2:08

charged a commission, and they didn't

2:10

understand why. Scott and Rhonda sold

2:12

a house that they owned for $250,000. Out

2:16

of that amount, they paid about $15,000 in

2:18

commission that got split between two real

2:21

estate agents. One who represented

2:23

them, helped them list and show their home,

2:26

and one who represented the buyer, the

2:28

real estate agent on the other side

2:30

of the transaction. Mike's lawyer

2:32

friend is like, sure, this

2:35

is how selling a home in the

2:37

US usually works, but it

2:39

is also kind of weird. Rhonda and

2:41

Scott were essentially paying for both sides

2:43

on the sale of their home. A

2:46

seller's agent and a buyer's agent who

2:48

were both incentivized to get a high

2:50

commission. Kind of maybe

2:53

seems like a conflict of interest. A

2:55

conflict of interest that most

2:57

people never really question. I'm

3:00

like, well, this is how people buy and sell houses. I

3:02

guess I just never thought about it and

3:05

made me feel kind of dumb. I

3:07

thought, well, why didn't you know that? Another

3:10

problem for the Burnett's was just

3:13

how high that commission was. Back

3:16

when they first signed some paperwork to sell

3:18

their house, they were given a choice of

3:20

what to pay their real estate agent. They

3:22

could pay six or seven or eight or

3:24

nine percent commission. These are like these little

3:26

boxes that they can check on the paperwork.

3:29

And Rhonda is like, yeah, I'm going

3:32

to pick six percent commission, so I

3:34

pay less. She then

3:36

asks her realtor if she could negotiate

3:38

an even lower rate, and the

3:40

agent says no. Yeah,

3:43

five to six percent commission is kind of

3:45

the going rate in the US. It's

3:47

worth pointing out that this is really high

3:49

compared to most other countries, where it is

3:51

also way less common to have agents at

3:53

all who represent buyers. Now,

3:55

Mike's lawyer friend, he says, look,

3:58

the way commissions work in real

4:00

estate in this country, it isn't

4:02

just peculiar. It's

4:05

illegal. So Mike agrees to

4:07

take a closer look. I started looking

4:09

at this and taking into it and I was stunned. And

4:12

I just couldn't believe it. Mike was

4:14

like, it does look like

4:16

something illegal happened here. You

4:18

know what? I'm in.

4:22

Hello, and welcome to Planet Money. I'm Amanda

4:25

Oronczyk. And I'm Keith Romer. That

4:27

case that Mike had just signed onto would

4:30

soon become a much bigger fight. A fight

4:32

about the way homes are bought and sold

4:35

in the U.S. at a time when home

4:37

prices seem like they just go up and

4:39

up. A fight about how real

4:41

estate agents have done business for more than 100

4:43

years. Today

4:46

on the show, how a personal injury

4:48

lawyer teamed up with a bunch of

4:50

Missourians to radically change the housing market.

4:58

This message comes from NPR sponsor E-Trade

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years. Right now,

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lifetime membership to 25 different languages

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for 50% off. Learn

5:42

more at rosettastone.com. Scott

5:47

and Rhonda Burnett, the couple that Mike Ketchmark

5:49

had agreed to represent, did not like how

5:51

things had gone down when they sold their

5:54

home. They especially didn't like the

5:56

part where 3% of

5:58

the proceeds from the sale had gone to the market. the

6:00

real estate agent who represented the buyers,

6:02

the people who bought their home. But

6:05

for a court to consider this illegal,

6:07

Mike was going to have to prove that

6:09

there had been some kind of conspiracy

6:11

between agents on the seller's side and

6:13

agents on the buyer's side to keep

6:15

that commission high. There's a

6:17

law, it's the Sherman and I

6:19

Trust Act, that says that you

6:22

cannot join with competitors to follow

6:24

a system that's designed to inflate

6:27

or stabilize prices. Mike

6:29

starts digging and pretty quickly it becomes

6:31

apparent to him that what had happened

6:33

to Rhonda and Scott Burnett wasn't just

6:35

some isolated case. They were not the

6:37

only ones who had paid an inflated

6:39

fee and didn't really seem to have

6:41

much choice about it. We started investigating

6:44

this and saw that this was happening

6:46

statewide in Missouri and it was a

6:49

system-wide practice so we decided to expand

6:51

the class. Within months

6:54

of joining the case, Mike and

6:56

the team expanded it to a

6:58

statewide class action representing 500,000 Missourians.

7:02

And they weren't just going to sue

7:04

the two companies that had worked on

7:06

the Burnett's house sale, but all told

7:08

four of the country's largest realtor franchises,

7:10

companies like Keller Williams and Home Services

7:12

of America, and also the National

7:15

Association of Realtors. I

7:18

had never heard of the National Association

7:20

of Realtors had been and when I

7:22

started looking into it, I thought, wait

7:25

a minute, they're the largest lobbyist in

7:27

the country, bigger than Big Pharma, bigger

7:29

than NRA, than all of these organizations,

7:31

and the answer is yes. The

7:34

National Association of Realtors has over a million

7:36

and a half members. It is

7:38

the biggest professional organization in the country

7:41

and it sets standards for the industry. They

7:44

even trademarked the word realtor to him.

7:47

And there's this one moment early on when

7:49

Mike starts to realize just what kind of

7:51

behemoth he's up against. He dialed into this

7:53

routine call to figure out some scheduling issues

7:56

with the defense. and

8:00

23 defense lawyers on the phone. And

8:02

I just thought, man, what have we done

8:05

here? It's possible that

8:07

Mike is exaggerating here, but? But

8:10

a lot of lawyers in any event. Definitely, yeah.

8:12

Definitely more lawyers than what Mike has at

8:14

his law firm where there are four. Mike,

8:17

Mike's best friend, Mike's son, and a lawyer

8:19

named Ben. To Mike, a

8:22

gabillion lawyers, that was

8:24

a sign. The other side

8:26

was scared. I'm

8:28

a trial lawyer, and in a

8:30

lot of ways, I feel that sometimes these corporations

8:33

are bringing a briefcase to a good old

8:35

street fight, and that's what jury trials are.

8:39

Jury trials, the street fight

8:41

of lawsuits. Now, unlike most

8:43

corporate litigation, this was

8:45

not going to be quietly sorted out

8:47

behind closed doors in arbitration, or

8:50

settled between the parties in a judge's

8:52

chamber somewhere. Mike was

8:54

determined to make his case before a jury.

8:56

Remember, that is why his lawyer friend tapped

8:58

Mike in the first place. Mike

9:01

knows how to work a crowd, or a jury. So

9:04

as Mike and his team get their arguments

9:06

together, they practice, and they do

9:08

this in front of mock juries made up

9:10

of real people. We'd pull 24 people,

9:12

literally just kind of off the streets, and

9:15

we would present the case. I'd put on

9:17

the plaintiff's side, some of the lawyers I

9:19

was working with would put on the defense

9:21

side. We'd give them the jury instructions, and

9:24

we'd watch them deliberate. Mike says

9:26

that they ran these mock trials 18

9:28

separate times. This is

9:31

where Mike would try out

9:33

his Americana-laced metaphors. I

9:35

said, look, I live in Kansas City. I'm

9:37

a huge fan of the Kansas City Chiefs,

9:39

world champions. And I said,

9:41

when the Kansas City Chiefs host the

9:43

Denver Broncos, we don't pay for

9:46

their coach's salary. When you

9:48

sell your home, why are you paying the

9:50

buyer's agents? Mike's argument to

9:52

those mock juries was that the high

9:54

commission being paid to the buyer's agents,

9:57

that had become baked into the way

9:59

housing. are bought and sold. It was

10:01

at the very heart of this price setting

10:03

conspiracy. Mike explained that most

10:05

homes for sale in the U.S.

10:08

are posted on databases called multiple

10:10

listing services. Consumers can usually

10:12

search these databases, but they can't post

10:14

a listing of a house for sale.

10:16

Only realtors can do that. There are

10:18

about 800 of these

10:20

databases for different markets across the

10:22

country, including one around Kansas City.

10:25

When you logged into that, it would list every house

10:27

that's for sale in Kansas City. You pulled up and

10:29

you see 7,000 houses that are for sale. You would

10:31

see that these are the houses, if you're on the

10:33

buyer side, that you're going to get paid a 3%

10:35

commission on. This

10:38

is a rule. Real estate agents listing

10:40

a home on one of these databases

10:42

have to post how much commission they're

10:44

offering. Commission that will go to

10:46

the real estate agent on the other side of

10:48

the transaction, the agent representing the buyer. It's been

10:51

like this for decades on the MLS. It

10:53

had been a platform for collusion before.

10:56

It had been this vehicle for agents

10:58

who represent the sellers

11:00

and agents who represent the buyers to

11:02

kind of know pre-ahead of time what

11:04

the commission was going to be. Mike

11:07

explains all of this to the mock jury.

11:09

He says, here's where things

11:11

get a little thorny. Imagine

11:13

an agent lists a house on

11:16

the MLS and posts that this

11:18

sale comes with a 3% commission

11:20

for the buyer's agent. Great.

11:23

All of these agents are going to bring their clients to

11:25

come see this house. But

11:27

what if the agent posts a

11:29

listing offering a low commission, more

11:31

like 1%. The incentive

11:33

all of a sudden for buyer's agents to

11:36

show that house becomes much less.

11:38

Mike says he could tell that the mock

11:40

jury was totally buying his arguments. I'm

11:42

like, they get it. They understand. They

11:45

get it. Mike says that

11:47

posting the commission on a database can

11:49

lead to what is known as steering,

11:51

where agents steer their clients away from

11:53

homes with low commissions to homes with

11:55

big commissions where they're going to make

11:58

a lot of money. And

12:00

so when people want to list their homes

12:02

for sale, their agents push them to offer

12:04

a big commission, usually that 6% number,

12:07

to ensure that buyers' agents show their

12:09

house, bring in potential buyers. But

12:12

the problem with that, Mike says, is

12:14

that it is anti-competitive. Real

12:16

estate agents, we should say, disagree with

12:18

this characterization. Back in October,

12:20

Planet Money's daily podcast, The Indicator,

12:22

spoke to Ron Phipps, a former

12:24

president of the National Association of

12:26

Realtors. Ron is also

12:29

a Realtor, TM, and

12:31

he says, imagine you were looking to

12:33

buy a house. If you were to

12:35

come into my office, we would sit down and have a

12:37

conversation saying, these are the services I'm going to provide. And

12:39

we're going to have a conversation as to what the nature

12:41

of my fee structure is and what my compensation structure is.

12:44

And if we come to terms and say, look, it is X

12:46

amount, when I start searching,

12:48

I'm going to show you everything in the market.

12:51

Ron says he's going to show you all of

12:53

the houses, the ones where he would get the

12:55

usual 3% commission and the

12:57

ones where he'll make much less, like 1%

12:59

commission. He says he is

13:01

not going to steer you away from the homes where he

13:04

gets paid less. Also he

13:06

says it makes sense to take commissions

13:08

for both the seller's agents and buyer's agent

13:10

out of the sale price of the home.

13:13

Because buyers are usually so stretched financially,

13:15

they wouldn't otherwise be able to afford

13:17

to pay an agent. And

13:20

Ron says the service agents provide is really

13:22

valuable. He thinks it is worth it to

13:24

have someone like him help you when you're

13:26

trying to make a big purchase like a

13:29

home. It's not like picking

13:31

a car or picking a meal. It's

13:33

a significant permanent investment that you really

13:36

want to have that expert

13:38

trusted advisor's advice. So

13:40

in a nutshell, those were the

13:43

realtors' arguments. The trial began

13:45

last October. It took place in a windowless

13:47

federal courtroom in Kansas City, kind of like

13:49

the sort of room you'd see in a

13:51

TV drama. And when personal

13:53

injury lawyer Mike walked in, he said there

13:55

were an uncountable number of defense lawyers on

13:58

the left and on the right. a

14:00

table for three. Him, his partner, and the

14:02

man who brought him the case in the

14:04

first place. Over the course of two weeks,

14:07

both sides make their cases. Mike

14:09

says, in his opinion, the Realtors'

14:11

arguments kind of missed the point. They

14:13

defended this case by saying, well, you

14:15

know, but people were happy when they

14:17

sold the house. But Mike was

14:19

like, this isn't about the quality of the

14:22

service. It's about collusion. Whether or not the

14:24

real estate agents were getting together and agreeing

14:26

on prices, which is bad

14:28

for consumers. Now, Mike,

14:31

he did not want to do

14:33

some long, boring explanation about how

14:35

competition works. He wanted to use

14:37

an example that the jury could relate to, like

14:39

buying chicken for a barbecue. The

14:41

way I described it to the jury is, if you think

14:43

about it, like if you have five companies

14:46

that are chicken producers,

14:48

they can't get together and

14:50

say they're going to charge $5 a

14:53

pound on chicken. It's just against the

14:55

law. It's collusion. Mike says

14:57

the same rules apply to Realtors, no

14:59

matter how happy their customers might

15:01

be. Well, that's like saying people at my

15:03

barbecue were happy because the chicken tasted good.

15:06

That doesn't matter, right? I mean, like,

15:08

you can't do that. It's not the

15:11

free market. Next, Mike went

15:13

after the argument that clients could always

15:15

negotiate their agent's commission. You know

15:17

what's even more compelling than a

15:19

folksy metaphor about barbecue or football?

15:22

A startling piece of video evidence.

15:25

On the second day of the trial, Mike played

15:27

a video featuring the CEO of Home Services of

15:29

America, a guy named Gino Blafari, at

15:32

a presentation training Realtors from different

15:34

companies to insist on a 6%

15:36

or more commission. For

15:39

example, when home sellers saw that I had

15:41

written in a 6% commission

15:43

into the contract and would ask

15:45

Gino, aren't commissions

15:48

negotiable? I would always

15:50

answer confidently. Yes, commissions are negotiable,

15:52

but I can only go up.

15:55

Then Mike played a video of

15:57

his deposition with Gino Blafari, asking

15:59

about... this training video. Mike

16:24

dropped the real shocker on the seventh

16:26

day of the trial. A video clip

16:28

of a podcast interview with Alan Dalton,

16:30

head of Real Living Real Estate, explaining

16:33

his best practices for keeping

16:35

a big commission. Oh

17:27

yes, I think everybody heard him loud and clear.

17:40

When this played in the courtroom, people were like,

17:42

oh. The

17:44

realtor's side said that not only was

17:46

this video totally vulgar, it wasn't even

17:49

on the exhibit list. So

17:51

they tried to get the judge to declare

17:53

a mistrial, but motion

17:56

denied. The video was a smoke and

17:58

gun. It's like you're accusing somebody of robbing a bank. you

18:00

got a video of them doing it. But

18:02

Mike's argument wasn't just that realtors

18:04

were refusing to negotiate on commissions

18:06

with their customers, but

18:09

that there was collusion, that sellers

18:11

agents and buyers agents were working

18:13

together to ensure high commissions. You

18:16

know what's even more compelling than folksy metaphors

18:18

and vulgar videos? Data.

18:21

Data. Data that they said

18:24

proved that the realtors had colluded.

18:26

Mike's team had hired an economist who looked

18:28

at homes in the Kansas City area that

18:31

had been sold by three big realty companies,

18:33

thousands and thousands of transactions. And

18:35

he was looking to see what commission was

18:37

being given to the buyer's realtor. Now,

18:40

in a truly competitive market where people

18:42

are negotiating back and forth, you

18:45

would see a range, 1% commission,

18:47

2%, sometimes 4% commission, but

18:49

that is not what was happening in Kansas City. To

18:52

help drive home the point, Mike puts up

18:54

a chart of the economist's analysis. It

18:57

was a very visual image. If

18:59

it's a randomness to it, you would expect

19:01

on a chart like all these dots all

19:03

around. But because it wasn't, it was

19:05

a single bar graph. It was basically one

19:08

red line, practically all the dots, right

19:10

there at 3%. In

19:13

almost every sale, over seven years, in fact in 92.6%

19:15

of the home sales in Kansas City,

19:19

the realtor representing the buyer was

19:21

getting the exact same commission, 3%,

19:25

3% of the total value of the home. The

19:27

economist told the jury that this

19:29

was one of the clearest cases

19:31

of collusion and price fixing he

19:33

had ever seen. The prices were

19:35

so stabilized that that's exactly what

19:37

the commissions were. And the chances

19:40

of that happening without collusion was

19:42

almost zero. Then Mike's team

19:44

presented evidence that this wasn't happening

19:46

only in Kansas City, but also

19:48

in other markets across Missouri, Columbia

19:50

and Springfield. And each of those

19:52

individual markets had their own

19:54

data. And in each of those

19:57

markets, they saw the same thing. A

19:59

commission rate? was basically fixed.

20:01

Finally, both sides had finished calling

20:03

on their witnesses and presenting all

20:05

their evidence, vulgar and otherwise. And

20:08

Mike turns to the jury to make his closing

20:10

argument. What I told the jury was that they

20:12

had the chance to hit the reset button on

20:15

the housing market and that

20:17

they had the ability and the power to

20:19

say follow the law. Don't

20:21

collude with your competitors. Don't

20:23

fix and set prices to benefit you.

20:26

On October 30 of last year,

20:28

Mike wraps up his statement. The

20:30

realtor side says their piece and

20:32

then... The jury goes out and

20:35

then you sit there and you get a pit in the bottom

20:37

of your stomach because they're literally

20:39

just answering five questions. It's like, you

20:41

know, question number one, do you find

20:43

that there was a conspiracy? And

20:45

then they answer yes or no. If it's no, the case

20:47

is over. The four and a half years

20:49

that Mike and his team had spent preparing for this

20:51

trial, everything hinged on

20:53

the jury's decision. Coming

21:00

up after the break, the jury returns

21:02

with their verdict, an update on

21:04

where things stand today. And what does

21:06

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22:46

let'smakeaplan.org. Hi,

22:49

Mary Childs here. A Bernie Madoff

22:51

inspired Ponzi scheme is the backdrop to

22:54

the 2020 novel The

22:56

Glass Hotel. To write it

22:58

Emily St. John Mandel read books

23:00

and court transcripts from the Madoff

23:02

trial but she says it's the

23:04

victim impact statements that really stood

23:06

out. The line that stayed with me is

23:08

she said he makes you feel

23:10

like you were joining a special club and

23:14

that kind of speaks to why the

23:16

crime worked. In our latest bonus episode

23:18

my conversation with Emily St. John Mandel

23:20

you can check that out now if you're a Planet Money Plus

23:22

listener. If that is not you it

23:25

could be. You get bonus content,

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23:29

support our work. Just go to plus.npr.org.

23:35

After two weeks at trial Mike and his

23:38

team sit at their table for three and

23:40

wait for the jury's decision. Mike's

23:43

parents, a bunch of his cousins are also

23:45

there sitting behind him in the gallery. Finally

23:48

after a couple of hours of deliberating the

23:50

jury comes back into the courtroom to

23:53

present their verdict, their answers to a

23:55

series of questions. Was

23:57

there a conspiracy? Did you find it

23:59

these days? defendants engaged in it. Did

24:01

you find that it harmed the plaintiffs?

24:04

The jury says yes, yes,

24:06

and yes. And then the final question,

24:09

how much in damages is owed to the

24:11

victims? And they awarded to the

24:13

penny what we asked for. How much were

24:15

you asking for? One point eight billion dollars. The

24:18

amount of commissions that were taken that they shouldn't

24:20

have had to pay. One point

24:23

eight billion dollars for the five hundred

24:25

thousand Missourians who recently sold their homes.

24:28

Now, one interesting thing about antitrust

24:30

cases is that they sometimes fall into

24:32

this category of cases where the law

24:34

says the penalties should be more than

24:36

just a refund of what is owed.

24:39

Under the law, it's called trebling damages.

24:41

Under the antitrust laws, you automatically triple

24:43

that amount. So it's going to be

24:45

tripled to five point four billion dollars.

24:47

Mike, is this the biggest case you've

24:49

ever done? Oh, yeah, by far, hands

24:51

down. By far. Yeah, by, yeah.

24:54

Can't compare anything else to it. In

24:56

the months that followed the verdict, things went from

24:59

bad to worse for the National Association of Realtors

25:01

and the big real estate firms. In

25:03

addition to the Missouri case, they were soon

25:05

facing more than a dozen similar lawsuits with

25:07

similar sets of facts in a bunch of

25:10

different states. And Mike, he

25:12

has been working to expand the case,

25:14

this time from Missouri to the entire

25:16

country. Mike knew that the

25:18

damages the companies and the NAR

25:20

owed were so large that they

25:22

could go bankrupt. And he

25:24

says that this case, it wasn't just about

25:27

the money, the people he was representing wanted

25:29

to change the whole system. So with all

25:31

of that in mind, Mike went to the

25:33

NAR with an offer. You can either

25:36

go on appeal if you lose it, we'll

25:39

collect this money, we'll seize your assets,

25:41

your corporate buildings. They've got these beautiful

25:43

corporate buildings in Washington, D.C., in Chicago

25:45

and all around. Or

25:47

you can pay the money now and change

25:50

the practices. And so that's what they agreed

25:52

to do. A couple of the realty

25:54

companies paid tens of millions of dollars to

25:56

settle. And then, a couple

25:58

weeks ago, the NAR settled as

26:00

well. And while they would not acknowledge any

26:02

wrongdoing, they did agree to pay $418

26:06

million and make a few fundamental changes

26:08

to the way realtors do business. The

26:10

biggest practice changes that

26:12

this MLS, it's a multiple listing services

26:15

the way that homes are listed. The

26:17

biggest change is that homeowners are no

26:19

longer required to make an

26:21

offer of compensation to a buyer's agent. Once

26:23

the settlement goes through, sellers agents will no

26:25

longer be able to use the MLS to

26:28

offer a particular commission to the buyer's agent.

26:30

That box will be scrubbed from the database.

26:33

Also, all realtors who are members of

26:35

NAR, they will be required to provide

26:37

prospective home buyers with a written agreement,

26:40

paperwork that clearly lays out

26:42

exactly what commissions the agents are going to

26:44

get paid. After the big settlement,

26:46

we checked in again with Ron Fitz from

26:48

the National Association of Realtors. He

26:50

was watching the whole trial the way it all played out.

26:53

Did you agree with the verdict? No,

26:57

I thought it was sad. I

26:59

thought it was a mischaracterization and misrepresentation

27:02

of the value we bring to consumers.

27:05

Ron still thinks that the way it's been

27:07

working, where the commission for both realtors is

27:09

part of the sale price, but

27:11

that makes sense and that buyers agents

27:13

provide a valuable service worth paying

27:15

for. But now, without this

27:18

kind of guaranteed compensation baked in,

27:20

it is not at all

27:22

clear what will happen to all those buyers

27:24

agents. Do you think there's a chance that

27:28

real estate agents who represent buyers will

27:30

just disappear completely and everyone who wants to

27:32

buy a house will just go on Zillow and they'll

27:34

watch some videos and they'll figure out the house that

27:36

they want to buy on their own? I

27:39

think that there will be some agents that do not stay in

27:41

the industry. I think that's possible.

27:43

I'm not terribly concerned about that. I'm

27:45

actually looking forward to the people that think that they

27:48

can search online, see a couple videos

27:50

on a website and then master getting through

27:52

the process of obtaining a house. I

27:55

just we're gonna hear stories on that where people go,

27:57

I had no clue. These changes

27:59

are special. to happen this July, so

28:01

it is a little early to say exactly

28:03

how this is going to disrupt the housing

28:05

market. But there are a

28:07

few possible scenarios floating around out there.

28:10

In the rosiest version of things for

28:12

consumers, commissions come way down,

28:15

buyers and sellers save tens of billions of

28:18

dollars every year, and maybe

28:20

even home prices come down a

28:22

little. Or

28:24

realtors could just figure out a workaround

28:26

to the new rules about not including

28:28

a commission offer on every listing on

28:30

the MLS databases. Real

28:32

estate agents are still allowed to send an

28:34

email or a text to the person on

28:36

the other side of a deal and just

28:38

agree on a commission. So maybe

28:41

commissions do not end up coming down all that

28:43

much. Or maybe everything lands

28:45

somewhere in the middle. Some home buyers

28:47

and sellers pay their agent the old

28:50

way, and maybe now in

28:52

this new world, some people

28:54

decide to negotiate with their agent, get a

28:56

lower rate, or they just

28:58

pay agents for services a la

29:00

carte, pay a fee for help searching

29:03

for homes or like running some price

29:05

comparisons. Mike, the personal injury lawyer at

29:07

the center of this story, he also does not know

29:09

how this will all shake out. For

29:11

now, he and his team are working on

29:13

putting together a list of the home sellers

29:16

who are eligible to receive money from the

29:18

settlement. They think the number is something like

29:20

40 to 50 million people.

29:22

So what happens in cases

29:25

like this, we have to give

29:27

notice to people. And so we're in

29:29

the process now of sending out notice to all

29:31

of the people who have sold homes in the

29:33

United States so that this money

29:35

can be returned to them. So

29:38

now some news you can use. If you sold

29:40

your home in the last several years, you might

29:43

want to keep your eye out for a postcard

29:45

about the settlement. Looks a bit like junk mail.

29:47

It isn't. Or you

29:49

can head on over to

29:51

realestatecommissionlitigation.com. Coming

30:06

up next on Planet Money, how one of

30:08

the world's most vibrant, advanced economies fell

30:11

down one day and could not get back up.

30:13

That's when the people started to

30:15

think this is unprecedented

30:18

and we may be in

30:20

a recession for a long time. The

30:23

spooky story of Japan's lost decades

30:25

and how it changed modern economics.

30:29

Today's episode was produced by Willa

30:31

Rubin with help from Sam Yellowhoard-Kessler. It

30:34

was edited by Keith, thanks so much

30:36

Keith, and it was engineered by Valentina

30:38

Rodriguez-Sanchez with help from Robert Rodriguez.

30:41

And it was fact checked by Sierra Juarez. Thanks

30:43

today to Professor Roger Alford, Christopher

30:45

Ballog, to Andrew Jeffrey, Paul Paglia,

30:48

and Elizabeth Cohen. Also to Adrian

30:50

Ma and Weilin Wong, two of

30:52

the hosts on The Indicator. If

30:55

you have not listened to The Indicator, stop issuing. Go

30:57

listen right now. I'm Keith Romer.

30:59

And I'm Amanda Oroncik. This is

31:01

NPR. Thanks for listening. This

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