Is the National Association of Realtors a Cartel?

TOPICS DISCUSSED

Reflection on the Total Solar Eclipse
National Association of Realtors Settlement
Outside of Politics: Indigo Girls

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TRANSCRIPT

Sarah Holland [00:00:07] This is Sarah Stewart Holland.

Beth [00:00:09] This is Beth Silvers.

Sarah Holland [00:00:10] You're listening to Pantsuit Politics.

Beth [00:00:12] Where we take a different approach to the news.

[00:00:14] Music Interlude.

Sarah Holland [00:00:29] Hello everyone, it's Sarah. I'm back from spring break and I missed all of you so very, very much. Now Beth is gone. She is enjoying time at the beach with her family this week. So today I am joined by my beloved husband, Nicholas Maxwell Holland Esquire. Full title.

Nicholas Holland [00:00:50] Yeah, that's the big one.

Sarah Holland [00:00:51] The big one. Because today he is joining me to talk about the National Association of Realtors settlement with basically everyone. He's a real estate attorney. So we're going to talk about that. Get excited.

Nicholas Holland [00:01:04] Yeah.

Sarah Holland [00:01:05] I mean, it affects everybody. I think we all should be excited to talk about it.

Nicholas Holland [00:01:08] It affects many people.

Sarah Holland [00:01:08] It affects anybody. Okay, but first we're going to talk about the total solar eclipse, which was magical and wonderful and incredible.

Nicholas Holland [00:01:16] 2.0.

Sarah Holland [00:01:17] And we're going to wrap up the show by talking about the Indigo Girls, because it is Indigo Girls week here in Paducah, Kentucky. We're going to tell you all about that at the end of the show Outside of Politics. Before we jump in, I wanted to remind you that it's Book Club Week. We have been wrapping up our winter cycle with discussions of Her Country by Marissa Moss on our premium channels this week. You guys, Her Country is amazing. And, y'all, we timed this perfectly because this book is the story of the beginning of the careers of Maren Morris, Kacey Musgraves who has an album out, Mickey Guyton, who's featured on Cowboy Carter. So, listen, it's women and country music time right now. We're going to talk about obviously Cowboy Carter when Beth gets back from vacation. But in the meantime, you should definitely join our premium community so you can talk about her country. We have also started the sale of our summer selections. So this is how this works. We partnered with Lisa, who you heard from earlier this week on the podcast at The Bookshelf, and she sends an actual physical book box if you're into that, if you like to get mail. Who doesn't like to get mail? It's not required, though, that you buy the box. This summer we asked our listeners to pick the books, okay? They pick The Displacements by Bruce Holsinger, which I read on spring break and was so good. You guys did a great job picking that one. And The Sentence by Louise Erdrich. So you can get the book from Lisa. You can buy the book yourself, you can get it from the library, whatever. But the discussions of the books happen on our premium community. We have the best conversations. They're post where you can just participate in the comment thread. We have interviews with the author sometimes. Sometimes Beth and I have conversations. Sometimes we talk with listeners. It's so much fun. If you're a book club person, I think we have one of the best book clubs out there, and that all happens on our premium community. So if you want to join Patreon and participate in our book club, the book boxes are now available for purchase for our premium members only, and will be on sale through the end of next week or until they sell out. So now is the time to act. It's book club time, so exciting! So please join us on the premium community for our book club. All right. Up next...

Nicholas Holland [00:03:28] The eclipse.

Sarah Holland [00:03:29] Total eclipse of the heart.

[00:03:42] Music Interlude.

[00:03:51] Nicholas, for the second time in seven years, Paducah, Kentucky experienced a total solar eclipse.

Nicholas Holland [00:04:04] It's pretty wild.

Sarah Holland [00:04:05] Why are we so blessed? And what the heck, now we have to travel to see one? Because now I'm hooked. Now I love it. And I got to go to Egypt.

Nicholas Holland [00:04:13] Yeah, that doesn't feel like something I want to do.

Sarah Holland [00:04:16] But they're going to get six minutes. Six minutes.

Nicholas Holland [00:04:20] It's a lot.

Sarah Holland [00:04:20] We actually didn't stay in Paducah for this total solar eclipse because last time we loved it so much. We got two minutes. And Carbondale in southern Illinois (it's about an hour north of here) got about the same amount of totality in 2017, but I think they were actually cloudy in 2017. Either way, they got twice as much totality as this time.

Nicholas Holland [00:04:39] Yeah, almost twice as much.

Sarah Holland [00:04:40] And so we were like, will we will drive an hour for two more minutes of totality for sure.

Nicholas Holland [00:04:46] Yeah

Sarah Holland [00:04:47] It was an hour there.

Nicholas Holland [00:04:49] It was two hours back.

Sarah Holland [00:04:50] It was two hours back.

Nicholas Holland [00:04:51] We ended up better off than lots of people because people who left a little after us, it was three or four hours from Carbondale to Paducah.

Sarah Holland [00:04:59] Yeah, crazy. Crazy.

Nicholas Holland [00:05:00] So lots and lots of people clearly traveled a little further west to get--

Sarah Holland [00:05:04] It was the greatest mass migration-- temporary migration or something.

Nicholas Holland [00:05:08] This year [inaudible].

Sarah Holland [00:05:08] Yeah. On the New York Times.

Nicholas Holland [00:05:09] It was interesting. My oldest brother came up to watch it. He had to drive back to Atlanta that night, and he left Carbondale at about 2:45 and got to Atlanta at about 1:45 a.m.

Sarah Holland [00:05:23] It's twice as long. However, wherever you're going, it takes twice as long to get there.

Nicholas Holland [00:05:26] It seemed like it.

Sarah Holland [00:05:27] That's basically the long and short of it.

Nicholas Holland [00:05:29] But it was worth it for us for sure. He said it was worth it for them, even with that long drive home. It's an incredible experience for anyone who hasn't done it. It really was worth chasing.

Sarah Holland [00:05:40] Yeah. In 2017, I was like, okay, a little bit, what's the big deal? Like, we had the theme food. We were excited, but after I saw it, I thought, okay, now I understand why people chase this. Even though I don't really remember totality that well. I was so concerned with Felix, who was barely two at the time, pulling his glasses off and hurting his eyes. My strongest memory from 2017 is the shape of the shadows, which was so cool during partial totality and then making sure Felix kept his glasses on. And the themed food. Those are my strongest memories from 2017. This year, I really felt like I got to look and absorb and enjoy the actual totality.

Nicholas Holland [00:06:24] It's interesting, though, because, you didn't have to wear the glasses [crosstalk].

Sarah Holland [00:06:26] I don't remember that from last time either. I don't remember feeling like, okay, now we take our glasses off. Do you remember that?

Nicholas Holland [00:06:32] [Inaudible]. Yes.

Sarah Holland [00:06:32] I do not remember that.

Nicholas Holland [00:06:33] [Inaudible].

Sarah Holland [00:06:34] But two minutes is such a short period of time.

Nicholas Holland [00:06:36] It did seem like it was much more of a nationwide fascination with it this time than when in 2017 for some reason. In '17 it was definitely news and was definitely newsworthy, but I didn't feel like there was always apps and all this coverage of what you can do and getting a calendar out.

Sarah Holland [00:06:53] It was still a lot of traffic. There was still the same situation.

Nicholas Holland [00:06:57] I know. It was east of us that had most of the totality, though. Hopkinsville I think had the most totality, which is about an hour east of us. West carmen was about an hour west of us. It just felt a little different this time. Just felt like people were more into it.

Sarah Holland [00:07:11] Yeah. And I think people were hungry for a shared experience. There was so much coverage of America has found something that united us. And people were talking about how they were crying. And I heard this woman on NPR as she was watching it say, like, peace on earth, peace for all of us. And I started crying. I cried a little bit during totality. I think there was something post-pandemic about having this beautiful, natural experience together that the vibe was different. The vibe was really, really positive I felt like this time.

Nicholas Holland [00:07:42] There was a lot more conspiracy theories around this [inaudible].

Sarah Holland [00:07:43] There was. Dan Evans joined us for totality, brought his telescope. Highly advise inviting him to your totality solar eclipse. But we were laughing that maybe we could just plug in ChatGPT like, write us a biblical conspiracy about the solar eclipse and see what it turned out, because it'd be pretty close to those long Facebook posts that I was finding.

Nicholas Holland [00:08:04] Yeah, there was a lot of stuff out there about this being that.

Sarah Holland [00:08:06] Well, I think because it was over the United States and hitting the same places. They thought the way they crossed was like Hebrew letters. It was a lot. And yet we are all still here. Although, I did hear this terrible story in Los Angeles. This woman who was a horoscope influencer said it was spiritual warfare and she killed her family and herself during the total solar eclipse. Sorry, I took the vibe down way hard. I'm sorry, but it did happen. Some people got swept up in the energy and conspiracy. Listen, I don't mean to bring the vibe down, but there is something that happened in my body in 2017 and 2024 where my animal brain was like, "Panic, girl. This is bad." It is a cellular experience. I felt it in my body where I was like, this is wild. Your heart rate kind of increases. I felt not anxious, but just hyped up a little bit until I had to like really both times tell myself it's okay, everything is okay. Because I think the shift of the temperature and the light and all of that, it really does set off a little bit of reaction in your body.

Nicholas Holland [00:09:22] And one thing I didn't appreciate last time, that kind of I maybe I should have, but the fact that the moon is just the right size and just the right distance so that when it passes in front of the sun all you see is corona, is a little bit weird. It's a little bit too coincidental I think for some people to be like that isn't some design. Because if the Moon was a little bit smaller or a little bit further away.

Sarah Holland [00:09:46] It wouldn't work.

Nicholas Holland [00:09:47] I guess it wouldn't work, right? I mean, it would be like something smaller.

Sarah Holland [00:09:51] Yeah. I definitely didn't appreciate that. It's just so special, I'm telling you. Are you sure you don't want to go to Egypt for six minutes under the pyramids?

Nicholas Holland [00:10:00] We can just go to Egypt, but I don't know if I want to go to Egypt for the eclipse. It sounds like that might be a little wild.

Sarah Holland [00:10:05] I don't know, that's so tempting. Six minutes is a long time.

Nicholas Holland [00:10:09] Yeah, but four minutes wasn't a long time. We thought it was going to be a long time, and it blew by.

Sarah Holland [00:10:14] It did. It goes so fast.

Nicholas Holland [00:10:15] Here and gone.

Sarah Holland [00:10:16] But it was so beautiful. I was so skeptical listening to the Eclipse Chaser on the daily talk about how everyone is different. But this one did have this little sparkle in the bottom right corner that I do not remember from last time. It was not perfect. There was like a little sparkle. I don't know the word for it. There's probably a scientific term, but I'm going to call it sparkle. It was gorgeous.

Nicholas Holland [00:10:42] Well, I don't know the scientific term, that's not my specialty. But it was very fortuitous that we got good weather both times-- especially in April.

Sarah Holland [00:10:49] Yes. It rained the day before and the day after.

Nicholas Holland [00:10:51] It literally has poured rain. It has been overcast and cloudy for the last two days. I mean, we've gotten an inch and a half of rain according to my meter out there last two days.

Sarah Holland [00:11:02] Yeah. Well, and you know what? It's really interesting. The sense that we enjoyed it together. It was this unifying experience. Axios has had this email newsletter they wrote that went a little viral about like normal America and how we really don't disagree that much, and we're not all as divided as we think we are. And it's just that those voices are elevated. We all see the conspiracy theory on Facebook, but that literally represents like two percent of people that actually feel that way. And most of us are just raising our kids and planning these trips and enjoying the eclipse and enjoying each other. And it felt like the eclipse was a real manifestation of that sense of, hey, we're okay, we're in this together. Our politics and some of our systems are not functioning at max capacity right now, but we all do enjoy being here together. And the eclipse really felt like, hey, we enjoy being here together experience.

Nicholas Holland [00:11:59] And it was good. We had a president at this time that didn't decide to look at the [crosstalk].

Sarah Holland [00:12:02] Bless.

Nicholas Holland [00:12:05] DC did get partial again.

Sarah Holland [00:12:07] Yeah, it did get partial. But I understand why people are like, what's the big deal if they're just looking at partial? Because it is fun to look through the glasses at the partial, but it is nothing like being able to take your glasses off and look up into the sky and see a total solar eclipse. Annie Dillard tried. It's about the same as kissing a man versus marrying him. It's not the same.

Nicholas Holland [00:12:27] The last time I experienced a partial solar eclipse, actually, it was recently, but it wasn't it wasn't 90%, it was like 30%. It was in October.

Sarah Holland [00:12:36] That's cool, but it's not--

Nicholas Holland [00:12:37] It just gets dark and a little cooler. And you can play with the shadows a little bit, but that's about it.

Sarah Holland [00:12:41] No. When you can take your glasses off and look up and you see this thing that doesn't look like the sun or the moon because it's both, it's so incredible. So I hope all of you who were in the path of totality or got to the path of totality, also had an amazing total solar eclipse experience. Up next, we're going to talk about real estate.

[00:13:04] Music Interlude.

[00:13:12] Nicholas, let's talk about realtors, which is a trademarked word.

Nicholas Holland [00:13:17] I didn't know that until I started looking at this. The term realtor is a trademark of the National Association of Realtors.

Sarah Holland [00:13:22] They made the word up, right?

Nicholas Holland [00:13:23] I think so. I think that's the reporting that I saw, is that they effectively made up the word realtor.

Sarah Holland [00:13:27] Well, and here's the thing. As we start this conversation, we really need to distinguish between the National Association of Realtors and real estate agents. Obviously, you and I know and love very many real estate agents. My stepfather is a real estate agent. Several of my very good friends are real estate agents. Many of you are real estate agents. This is not about real estate agents. This is about the National Association of Realtors, which is an incredibly powerful trade association of 1.5 million members. It is the second largest spender as far as lobbying, after the Chamber of Commerce. It's been $81 million in 2022, and it uses that power. Believe it uses that power. And the thing about it is they are using that power on real estate agents as much as they are on the rest of us. They bully and control the real estate agents that are their own members as much as they are sort of using their power and their size within the industry itself. So I just want to make that clear. When I am using some strong language, it's really about the NAR not about the realtors themselves.

Nicholas Holland [00:14:40] Well, and I think that's a good point. And it's also worth saying because the reason a lot of this has not happened before, the reason that we are where we are with this, is because they have used their lobbying power to avoid much legislation against them. They've used it personally in ways I think are good too, but primarily to help them and make sure that they are still the A-1 place to go if you're a real estate agent and [inaudible] almost have to be a member of the NAR and pay the dues and whatever it is in order to be an effective realtor. Because until the settlement which has not been approved, of course, by the court and which was proposed to be entered, you couldn't even be on MLS, which is the Multiple Listing Service unless you are an NPR member.

Sarah Holland [00:15:26] So let's talk about the status quo before we get into the settlement. Okay, so currently if you are selling a house, you are essentially locked in to paying a brokerage fee for listing your house on the MLS, which is a Multiple Listing Service, and that supplies Zillow, that supplies all the things we check. If you have your house and you're not just sticking a sign in your yard that says For Sale By Owner, you want people to know about it, you have to use the MLS. So you are usually locked in to paying 5% or 6% really sort of depending on where you live. But once you sold your house, half goes to your agent that helped you list it and half goes to the buyer's agent. And this practice, which has been standard in the real estate industry in America for several decades, has led to a lot of accusations that this was basically a cartel, that they were controlling the industry in ways that incentivized agents to direct buyers to more expensive houses away from houses where maybe there was a lower commission being offered. So we were talking a lot of money from this five to six percent. Americans pay roughly $100 billion in real estate commissions annually.

Nicholas Holland [00:16:38] $100 billion?

Sarah Holland [00:16:39] Yes, $100 billion. And so what you were talking about, this is the genius of the Sherman Antitrust Act, which offers a private legal action because when you're talking about an association that spends millions and millions of dollars every year to lobby, the idea that you're going to get at this legislatively is...

Nicholas Holland [00:17:00] Pretty slim.

Sarah Holland [00:17:01] Pretty slim. Pretty slim.

Nicholas Holland [00:17:04] And some of those dollars from the realtors, they're not interested in upsetting that applecart.

Sarah Holland [00:17:08] Right.

Nicholas Holland [00:17:09] So what the result was, and what this group of plaintiffs said, was that as sellers and as buyers both, it was harming sellers and buyers. It was costing sellers more and it was leading to higher home prices, because the theory goes that the commissions were sort of being built into the price. So if you thought if you had a home that you would want to sell for $300,000, because of the real estate commissions, you would list it for 6% more or some other amount more in order to make sure that you're getting the proceeds that you want to get, the net proceeds that you want to get at the end of the day. I don't know if I really buy that as much. I do think the market sets the value of homes. And I when we sold our home, I never really thought, oh, this 6% is going to be this much and so we should list it for this much. I definitely took the guidance of our realtor about what we should list the home for, and maybe they were building in that 6%, but I don't think that most home sellers are doing that math necessarily.

Sarah Holland [00:18:06] Yeah, but I think you worked in the real estate law and we understood this. I think what you read a lot from these, particularly the Missouri plaintiffs which is where this started, this was a big class action in the state of Missouri, where they got a $1.78 billion judgment against the National Association of Realtors for just the people in Missouri. And so I think you hear their stories and they didn't know. They're about to sell the house and they're like, oh, by the way, 6% gets split between the real estate agents. And they're like, I'm sorry, what? I don't think understood that. I know that's hard for us to think about because we are so consumed. My dad's a mortgage broker, my step dad's a real estate agent, you work in real estate law, but I think some people just didn't know.

Nicholas Holland [00:18:47] Yeah, I think that may be true.

Sarah Holland [00:18:49] And especially when you tell them. Oh, by the way, you're also paying the buyer's agent. People are like, I'm sorry, what?

Nicholas Holland [00:18:54] Right. Sure. But I think savvy people in the main knew that, people who bought or sold a house more than one time- which many people do. People move multiple times over their lifetime, buy a house. We've bought two or three, I guess, really. So it's not like everyone is new to this experience the first time every time they do it. They kind of get it. But so what did the actual settlement with the realtors actually do I guess it's the next question.

Sarah Holland [00:19:20] Well, the first settlement in Missouri led to a million copycats with everybody going, I want a piece. And then the National Association of Realtors fully panicked, and they made a national settlement of 418 million. Now, like Nicholas said, that has to be approved by the federal court. But if it's approved by the federal court, here's what happens. Okay. It covers all of National Association Realtors members and its affiliated multiple listing service, and they have agreed to eliminate the Cooperative Commission role. So that means that the sellers will not be also paying the buyer's agent.

Nicholas Holland [00:19:52] Well, it means that you can't list that on the MLS and say that's what you're offering. It doesn't mean that practice is outlawed. If you want to negotiate the very same thing outside of the MLS, you can still do so. It's just that you can't list that on the MLS. And it's not sort of a requirement to be on MLS to use that brokerage.

Sarah Holland [00:20:11] Well, and that's the other thing. It ends the requirement that brokers subscribe to the MLS because the MLS was really a monopoly. The Association of Realtors is more like a cartel. You have lots of parties participating in this and agreeing to do this. The MLS is more like a monopoly. You got one player in the game and that's it basically. So it also mandates that all the arrangements between buyers and agents be put down in writing beforehand. So now I think you could have more of a flat fee or a market that's saying I want to offer a lower commission because there's a lot of real estate agents out there. You would think that you would see some of this because you have 2 million real estate agents and 5.5 million homes for sale each year. Okay, that math does not work out. The math does not work out that people are earning salaries selling two homes a year. So we have too many real estate agents. There's a lot of people I think who do it as a side hustle. There's a lot of people who just do it or who get their license because they flip homes and they just want to be able to keep the commission or whatever. And I think the first thing we're going to see is that numbers are going to drop dramatically. I think you'll see a lot fewer real estate agents.

Nicholas Holland [00:21:13] I think that's probably true. I think people who just do it part time or do it as a side hustle, it's hard to say. It's a pretty big hustle.

Sarah Holland [00:21:23] Yeah, seriously.

Nicholas Holland [00:21:25] It's not easy, and it requires a lot of energy and time and communication and dealing with people who are occasionally not very fun to deal with.

Sarah Holland [00:21:32] But if you look in other countries, they have way fewer real estate agents. They also have much lower fees. So commissions in the U.S are two to three times as high as Australia, Canada, Ireland, the Netherlands and the UK. There you're looking at like 1 to 2%. And so I think if you're talking about market competition and you're talking about a cartel and something that disrupted the usual function of a market, it's hard to argue that that's not what was going on here, I think especially compared to other countries.

Nicholas Holland [00:22:06] That's wrong. I do think that it's going to be disruptive. And I think it's going to be really interesting to see how it all shakes out, because as you mentioned each buyer's agent now has entered into a written agreement with the buyer about what their fees will be or how they will be compensated. And so it'll be interesting to see what kind of they come up with and how it shakes out. But I think you in some situations you also end up with kind of an ala carte list of services. If you want me to show you a home, it's going to be $100.

Sarah Holland [00:22:37] Yeah.

Nicholas Holland [00:22:37] If you want me to manage your home inspection and recommend inspectors and meet the inspector, it's going to be X dollars. I could see that. I could also see it kind of maybe still be an old status quo, because all the realtors are probably going to still want to do a commission that's based on a percentage of the sales price. I think what a lot of realtors would probably say is I think that they're either overpaid or underpaid on every house they sell. And it kind of evens out in the end. Sometimes you don't do a ton of work and you get a big commission because the sale price is big. Sometimes you kill yourself to sell a home as a buyer's agent. You show them 35 thousand homes. I mean, your stepdad has a million stories of people who look at homes and look at homes and look at homes and look at homes. He's meeting them, he's spending money on gas and his time, and then they call him up and they say, "Hey, we bought a for sale by owner."

Sarah Holland [00:23:22] Yeah. That's what bugs me. If the National Association of Realtors was really here for the realtors, it feels like you guys should have been lobbying and thinking and problem solving ways to improve that side of the market. You know what I mean? Like, regulations that help realtors on that side of things, where people can't just peace out and leave them with all this unpaid work. But I don't feel like they pay attention to that. They pay attention to lots of people becoming realtors, so they pay dues to their association and then do things like fight Fannie and Freddie doing fees for high risk loans. That's not a good use of your time. That's not protecting your members, that's protecting your profits. Let's make sure people who maybe can't afford their mortgages get them. No, why don't you make sure that people don't piece out and buy for sale by owner? I mean, I guess that's what they were trying to do with the monopoly of MLS, that they're trying to protect the MLS so people don't go to for sale by owners. But it wasn't working, none of that has really improved that much. I don't think.

Nicholas Holland [00:24:25] Yeah, I don't know. I think it's big in the news right now of trying to bring the cost of homeownership or the cost of buying a home.

Sarah Holland [00:24:33] Yeah. I read a piece that was like, here's another way to get at inflation. It's to get at fees and stuff like this, it doesn't all have to be through the fence.

Nicholas Holland [00:24:40] And at the same time they're doing the same thing with title insurance, which is close to my business, because obviously we are title agent and we sell title insurance. So they're working on a system where certain types of refinances won't require title insurance, will just require an attorney opinion letter. So that's [inaudible]. I don't know that any of them necessarily are going to get enough done to make homeownership affordable for everyone.

Sarah Holland [00:25:00] Well, the problem is that we don't have enough homes. We don't have enough units, that's the problem.

Nicholas Holland [00:25:05] We're struggling with-- mortgage rates and inventory are obviously big problems. But what I would say is that it's going to maybe work at cross-purposes because a lot of buyers they just are saving up enough just to get-- so they are closing fees or closing costs on their down payment. And then now you're talking about, well, you're also going to have to be out of pocket for buyers will take realtor.

Sarah Holland [00:25:31] As opposed to getting taken out of the--

Nicholas Holland [00:25:32] After having the seller who's going to get these big proceeds, or hopefully going to get a certain amount of money, is paying that. And they're paying both sides and-=

Sarah Holland [00:25:40] Well, and a buyer is not going to have a lot of negotiating power around that because there's lots of buyers and not a lot of sellers.

Nicholas Holland [00:25:46] Well, not right now. Yes.

Sarah Holland [00:25:47] Yeah, especially with the interest rates.

Nicholas Holland [00:25:49] So I'm rambling a little bit on this, but I'm not 100% sure that it's going to ultimately make it cheaper to buy a house. It might make it more complicated and it might make it so that you have to save up more because you're going to have to pay [crosstalk].

Sarah Holland [00:26:01] Well, I think you'll see some--

Nicholas Holland [00:26:03] And maybe that's okay. Maybe that's the intent here, but--

Sarah Holland [00:26:05] I think you'll see some players that have been trying to get into it for a while, like these low cost tech solutions. They're now going to find an opening to finally break in and get in there. I mean, it's amazing Zillow has done as well as it has because of the way that the NAR had this sort of stranglehold on the MLS. But I think you'll see players like that, like tech solutions come out, and really get at this. But where we live, and because of the fact that there's not a lot of inventory, what a really good realtor offers is networking and access, knowing that there's a house that's not on the market that's about to be on the market. And there's no tech solution to that, and that is worth paying for. And people will want to pay for, I think, buyers, agents who they feel like understand what's out there and know before anybody else does that a house is coming on the market.

Nicholas Holland [00:26:54] Sure, but is that making it cheaper or more accessible for people to buy a home, or is it making it less accessible? Because if you know so-and-so's the best buyer's agent in town, their price will be sky high. So only the most wealthy buyers [crosstalk].

Sarah Holland [00:27:08] Yeah, that's true. I mean the best way to make affordable housing is to build more damn houses.

Nicholas Holland [00:27:13] Sure.

Sarah Holland [00:27:14] I mean, you know I also have some ideas about our locked in mortgage rates to that is also not similar around the world.

Nicholas Holland [00:27:22] Yeah. I mean...

Sarah Holland [00:27:23] Messed up.

Nicholas Holland [00:27:23] [Crosstalk] fixed rate mortgage.

Sarah Holland [00:27:24] Messed up.

Nicholas Holland [00:27:26] It's not messed up.

Sarah Holland [00:27:26] It is messed up.

Nicholas Holland [00:27:28] It was intended to encourage homeownership, and it has had a lot of knock on effects that maybe are not great for sure.

Sarah Holland [00:27:33] Yeah. I mean, you have people in golden handcuffs who can't even think about selling because they have a 2% mortgage rate. Maybe they would be ready to downsize and open up that home to a new buyer, but they can't because they have a 2% mortgage rate. What are they going to do, go buy a house for a percent interest rate?

Nicholas Holland [00:27:48] I think it's fair to say that there are a lot of different things that are affecting the market right now and making it so difficult to find a home, and home prices going up and making homeownership expensive. The most biggest issue right now why home ownership mom is so expensive is the interest rates.

Sarah Holland [00:28:01] Well, I think it's the interest rates and the lack of inventory.

Nicholas Holland [00:28:06] Sure, but definitely having a 3.5% mortgage and a 7% mortgage, the math is astronomical.

Sarah Holland [00:28:11] And yet our parents were thrilled when they would get like 8%.

Nicholas Holland [00:28:14] Yeah, they were used to that. And the thing is that we have grown up in an age when the rates have been historically low, especially following the crash. And then during Covid, things were just so low that we kind of got used to the idea of like, well, 4.5% is normal, when really 7%, 8.5%, this is a more normal market historically.

Sarah Holland [00:28:35] I know.

Nicholas Holland [00:28:36] You also hear horror stories. Our parents in the 70s who had like 18%.

Sarah Holland [00:28:40] Yeah.

Nicholas Holland [00:28:42] So it's not unprecedented, certainly. If the goal is to make homeownership more affordable, I'm not sure that this really gets at that.

Sarah Holland [00:28:52] No, I think it will help. And, to me, it's not about making it more affordable, it's about really creating a market that can serve buyers and sellers, which I don't think this was. Not because I think real estate agents are bad at their job, but because I think the National Association of Realtors was a cartel, is a cartel and needs to-- in all areas of American life, not just this, there needs to be more competition. One of my favorite things that the Biden administration has done and focused on is looking at these anti-competitive practices that really disrupt the market, because we're not going to get any regulation out of Congress. So the most we can hope for is competition. And, for example, it's not like the Justice Department wasn't paying attention to this.

Nicholas Holland [00:29:37] Right. I think that they're involved or offered a settlement to the National Association of Realtors, which they then withdrew under the Biden administration fairly recently, because they felt like it was too kind and too lenient to the NAR, especially as it relates to future investigations or future [crosstalk].

Sarah Holland [00:29:56] So they've opened up another investigation that will focus on whether the group's rules inflate the cost of selling a house. And so that should be interesting. So even if this settlement gets approved, or by some happenstance doesn't get approved by the federal court, although I think it will be approved and this takes effect in July, you'll still have a Justice Department investigation that could lead to even more changes in this industry.

Nicholas Holland [00:30:16] Sure. I think that there's no doubt a change of some type is coming. It will be interesting to see how it all shakes out, in part because it's sort of an interesting career. You can be on both sides. Most renowned Realtors are both seller's agent and buyer's agent in some context, right? So it's just going to be interesting to see how that all shakes out with what they decide to do individually or as a group. And, like you said, what tech solutions might come along and what that means for buyers. As a buyer, I think I was pretty grateful for the fact that I wasn't paying anybody to buy a house. As a seller, I wasn't thrilled about it, but I understood it. You know what I mean? And now I think everyone's just going to be like [crosstalk].

Sarah Holland [00:30:55] I don't know, I just think there's so many parts of our American regulatory system and our markets that we just assume are normal. And then you hear that they pay 1 to 2% in Britain and you're like, wait, what? Or you think, why does Apple require me to download a different version of the app for their app store? There's just so many things that are the water we swim in, because we've had so little antitrust enforcement for decades, that you look around, you're like, wait, that sucks. I don't want to do it like that. There's just a lot of ways in which you absorb anti-competitive practices until sort of the older fish swims by and says, "How's the water?" And you're like, "What's the water?"

Nicholas Holland [00:31:39] That's right. I think this has been in place for so long that it's just what's expected and just everybody kind of knows that's how the deal is going to be. And does that seem anti-competitive just on the face of it? Yeah, it does. But why is it always going to be that way? And what the NAR will tell you is you could always negotiate your brokerage fees. There was never any prohibition against it. But what the lawsuit said and what was found is that doesn't really matter, because effectively you're not going to list it with no seller or no buyer broker tree because that means you're not going to get me buyers. You're not getting any realtors to bring buyers to your door because they're not getting paid to do it. So again, I agree 100%. This is probably good in the long run, but I think it's going to be some pain in the short run.

Sarah Holland [00:32:23] My Sherman anti-trust practice, because I need one personally as an individual, is to not believe monopolies or cartels when they play the victim personally. That's just my philosophy.

Nicholas Holland [00:32:34] Well, NAR is just clarifying or saying it wasn't true. What the media reported, in some places was a little bit haphazard. A suggestion that you couldn't previously negotiate those rates wasn't true, but it just in practice it wasn't happening.

Sarah Holland [00:32:52] Also, they had the head of the NAR get fired for sexual harassment and then another one left for other-- they've no great leadership over there.

Nicholas Holland [00:33:00] NAR has some issues for sure that we're going on during this. But this has been a long time coming. [Inaudible] This lawsuit has been on the horizon for these realtors for a long time and for the NAR for a long time. And there have been some other settlements with some just individual agencies. I think RE/MAX previous to this one. This is just big because it's global and everybody in NAR and that's about three quarters of a real estate agents in the country.

Sarah Holland [00:33:25] Yeah. And I think more and more people want to buy a house and can't. The pressure is just going to increase. We have an affordable housing crisis in this country. And so any piece of that puzzle that can get attention is good.

Nicholas Holland [00:33:38] Yeah. I think that's the goal of the current administration, is let's figure out every way we can [inaudible] they think people are being nickel and dimed, and stop getting them being nickel and dimed. The bigger problem is, for indicators, we don't have much inventory and our interest rates are too high. That's going to open another real estate market if that's your concern is having more inventory and having more affordable housing and getting the interest rates to where people feel like they can afford those houses.

Sarah Holland [00:34:04] Well, like you said, this is just the beginning. I think there'll be lots more changes to this industry.

Nicholas Holland [00:34:09] Yeah, I'm sure that the continuing education, real estate folks are gearing up to provide a lot of education around this in the near term. So it's good for somebody, I guess. But it's 100% going to just change the way we do it, and it doesn't affect my business that much, but it definitely affects the fees and whatnot that are reflected on the settlement and closing statements that we do. But I almost have to say it anecdotally, I think as it comes along, and what happens and who gets paid what.

Sarah Holland [00:34:38] Well, we're in those golden handcuffs, so we won't be selling our house anytime soon.

Nicholas Holland [00:34:41] No, I have no intention of selling our house anytime soon because you don't want to sell our house.

Sarah Holland [00:34:46] I don't. I love our house. I have nightmares where people sell the house out from underneath me.

Nicholas Holland [00:34:51] People.

Sarah Holland [00:34:52] You.

Nicholas Holland [00:34:54] Me. I've no desire for that

Sarah Holland [00:34:55] No. Thank goodness. All right, we look forward to hearing from all of you real estate agents, buyers, sellers I'm sure all of you will have lots of feedback. We look forward to hearing it.

[00:35:03] Music Interlude.

[00:35:12] Nicholas, it's Indigo Girls week here in Paducah, Kentucky.

Nicholas Holland [00:35:14] That's what I'm told. Yeah.

Sarah Holland [00:35:15] The Indigo Girls are performing at our Carson Center on Sunday night. And last night, Wednesday, we went and saw the new Indigo Girls documentary at our local independent theater, Main Alley: It's Only Life After All. And it was amazing.

Nicholas Holland [00:35:31] It was.

Sarah Holland [00:35:31] Do people not know who the Indigo Girls are? Should we clarify?

Nicholas Holland [00:35:38] I think they are, especially now with the Barbie movie.

Sarah Holland [00:35:40] Yes. So if you watched Barbie, when Barbie's singing the song Closer to Fine, that is a very, very famous Indigo Girl song. The Indigo Girls are Amy, Ray, and Emily Sawyers from....

Nicholas Holland [00:35:51] Decatur, Georgia.

Sarah Holland [00:35:52] Nicholas, how old were you when you saw your first Indigo Girls concert?

Nicholas Holland [00:35:55] I was probably like five or six.

Sarah Holland [00:35:56] In the Decatur town square.

Nicholas Holland [00:35:58] Yeah.

Sarah Holland [00:35:59] They've been around a while, it's what we're trying to say.

Nicholas Holland [00:36:00] They've been around a while. They've been in my life a long, long time because they used to play when they were first starting out as a folk group. They used to play the concerts on the square in Decatur, which are-- I'm not sure that's still going on. I imagine they do. But the square has changed. But was just sort of like Saturday night concerts during the spring and summer months.

Sarah Holland [00:36:19] But they're not folk. They talk about this in documentary. They're acoustic.

Nicholas Holland [00:36:23] They call themselves acoustic. But either way, that wasn't the focus of the concert on the square. They were all kinds of different bands that came and did that. But so when I was very young and they were starting out and very young, relatively, they would play on Decatur Square for free for the whole town.

Sarah Holland [00:36:38] I discovered the Indigo Girls in high school. I had some friends who were really into them. I remember Least Complicated was the song that I fell in love with of theirs, and have been listening to them ever since.

Nicholas Holland [00:36:51] When that album came out, I remember that there was a Tower Records release party for that album when I was a freshman in high school, I guess, that everybody went to. I didn't get to go. My parents were not party people.

Sarah Holland [00:37:05] But if you have never listened to the Indigo Girls, they are brilliant. They have amazing harmonies. They are poetic. Used as an insult occasionally in the documentary across several male rock critic reviews, which they talk about. The film is great because their long term friendship and partnership and activism, they were both out lesbians way before there were a lot of out celebrities. There have been very, very active politically throughout their entire careers, and it's just fascinating. Amy was like an archive this whole time filming their whole career. So they had all this amazing...

Nicholas Holland [00:37:44] Crazy footage from all kinds of stuff. Yeah.

Sarah Holland [00:37:46] And we've seen them probably, what, 5 or 6 times in concert?

Nicholas Holland [00:37:49] Yeah.

Sarah Holland [00:37:50] And now we get to see them up close and personal in Paducah on Sunday night, because we haven't seen it in a while. We were supposed to see them open for Brandi Carlile, but somebody got Covid. We don't know. But we've seen them several times. One of the best, best Indigo Girls experiences I ever had was when I worked at the Capitol, they were coming to lobby for AM radio.

Nicholas Holland [00:38:07] Low Power FM.

Sarah Holland [00:38:08] Power FM radio. And they came into this room and I was sitting in the chairs and I was sitting behind Amy. I was so close I could see her tattoos through her shirt in front of me. It was incredible. And they stood up and sang and we it was the staff. The staff had filled the room. There were clearly lots of Indigo Girls fans in the United States Congress at the time, probably like 2008. And they start singing and we're all just standing there very quietly because there were several congresswomen and congressmen in the front row. And Emily goes, "Hey, if y'all know the words, you can sing." And the entire room bust out, start singing, and all the congress people are turning around like, oh, wow, you guys really know the words to this song. It was so funny.

Nicholas Holland [00:38:59] Well, and this is my home town now. They came from my hometown, and they're in my hometown.

Sarah Holland [00:39:04] In your hometown? That's right. If you guys have not listen to the Indigo Girls, let me just recommend it to you. It will heal you. It will heal your spirit and your soul. And, I think, make you a better person really at the end of the day. Their songs, I think, are visual. There's a hilarious part in the documentary where Amy's like, is there a acoustic lesbian Christian genre?

Nicholas Holland [00:39:29] Right.

Sarah Holland [00:39:30] It's so good. It's been really fun to see the documentary, and I can't wait to see them in concert. And we just love them. Just take this moment Outside of Politics to say the Hollands are big Indigo Girls fans. I have a feeling, I have just a slight hunch that there could be a few Indigo Girl fans in our audience.

Nicholas Holland [00:39:50] I bet. Maybe five or six.

Sarah Holland [00:39:53] Maybe five or six. Okay, can't wait to hear from those people as well. Thanks for joining me, Nicholas.

Nicholas Holland [00:39:58] It's been fun.

Sarah Holland [00:39:59] So next Tuesday, Beth and I will be back together to catch up on the news. We're looking forward to that and we hope you'll join us then. Do not forget to head to our premium channels to become a part of our book club. And until next week, keep it nuanced y'all. Music Interlude

[00:40:25] Music Interlude

Sarah: Pantsuit Politics is produced by Studio D Podcast Production.

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