What happens to buyers’ agents if the bombshell lawsuit succeeds?

It’s Friday July 8, and today’s focus on the bombshell buyers’ agent lawsuits zeroes in on what happens to agents and the industry if the lawsuits succeed. As our own Jim Dalrymple II writes, “The sky is the limit.” Read on for more. 

What happens to buyers’ agents if the bombshell lawsuit explodes?

THE NEWS: The Moehrl and Sitzer/Burnett suits are still being litigated. But Mark Nadel, an attorney who has researched and published on real estate commissions, told Inman that the lawsuits — as well as the DOJ case — could ultimately lead to a more diverse compensation landscape. “Once the dam breaks, in my view, then you’ll have different models,” he said.

A 2021 paper Nadel published in the Berkeley Business Law Journal found that commissions ultimately generate around $90 billion per year. While speaking to Inman, he said that number has since climbed and is now closer to $100 billion. Nadel expects the industry to consequently resist change, though he thinks it’s coming anyway. “I’m going to bet that it will break,” he said, referring to the dam metaphor and the pressure building thanks to current litigation.

BEHIND THE NEWS: Other experts agreed that change is likely. Steve Brobeck, executive director of the Consumer Federation of America, pointed to the erosion of agents’ fiduciary roles in places such as Florida and said “the future of buyer agents does not look promising.” “If Moehrl succeeds in effectively prohibiting sellers from compensating buyer brokers, these brokers would face significant challenges,” Brobeck told Inman.

The sky is the limit when it comes to what might happen as a result in the future. But one possible outcome that Nadel envisions is that buyers agents may begin offering more a la carte services. In other words, buyers would just pay for the specific tasks that they want completed, but the agents would no longer collect a percentage-based commission. “We should still have all these services,” Nadel suggested, pointing to the various tasks buyers’ agents already do. “But we should sell them a la carte. I would like to see companies offering that.” Read the full story here.

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Gen Zs, Millennials have taken over the vacation rental market

THE NEWS: Move over Boomer — there’s a younger crowd swarming the vacation rental market these days. Younger generations have watched the fluctuating economy and are ready to invest their savings in something they feel is a more solid bet than the stock market: vacation rental homes.

Gen Z and millennials now make up the majority of vacation rental homebuyers at a composition of 51 percent of all vacation rental homebuyers, according to vacation rental management platform Vacasa’s latest Vacation Rental Buyers Report.

BEHIND THE NEWS: The typical vacation or short-term rental homebuyer today is an experienced homeowner who wants to enjoy their rental on a personal level and as an investment property. Short-term rental buyers are primarily motivated by generating income on their property and/or having a place to vacation with family, Vacasa’s report found. Still, the younger generations are thinking more about their property’s investment potential. Read the full story here.