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In a new lengthy conversation, National Association of Realtors President Kevin Sears accuses the Justice Department of being “disrespectful” and says the association is using a monopoly to avoid leaving other industry players high-handed. He said he had resolved the Prohibition Committee’s case.
Sears made the comments during an episode of Anthony LaMacchia’s podcast “Crush It In Real Estate” that aired live on Thursday. Sears, who spoke with LaMacchia, explained that NAR was involved in settlement negotiations before, during and after the Sitzer trial last year. Barnett Case — This trial ultimately ended with a jury verdict against the trade association and the major franchisor. Sears said on the podcast that several times he thought the NAR was close to an agreement, but each time “the finish line kept moving.”
Following the ruling, NAR had several options. One option was to appeal, but Sears said that because NAR didn’t have enough cash ($1.8 billion) to post bail, “we had to declare bankruptcy to appeal. ” he said. Sears said bankruptcy would have protected NAR from the verdict and copycat cases in litigation, adding that NAR might have been able to win the appeal.
“But these copycat cases would have moved slowly through the court system,” Sears added. “That means the agents, brokers, associations and MLSs named there would have paid millions of dollars in defense costs.”
Sears said filing an appeal and declaring bankruptcy would also limit NAR’s ability to conduct advocacy work in Washington, D.C.
For all these reasons, the option was a “non-starter” in his mind. So we settled.
Anthony LaMacchia (left) and Kevin Sears appear in a new episode of “Crush It In Real Estate.” Credit: Crush It In Real Estate
Still, Sears admitted he wasn’t completely satisfied with the deal. In particular, he lamented the exclusion of major securities firms with sales of more than $2 billion. Some securities company leaders are “understandably very angry with us” over this result.
“I’m a family man, and I feel like I left some of my family behind,” Sears said, adding that the plaintiffs refused to include large intermediaries in the NAR transaction. “That was one of those moments where the goal line moved and they hit us with a shot.”
Recently, Sears received emails from people asking how he could be happy when the settlement NAR announced in March just received final approval.
“We’re not satisfied, but we fought for the settlement, we fought to get it approved, and we’re going to fight to continue the appeal so we can put that possibility in the rearview mirror.” Because there is,” Sears said. “You can’t focus on the future. You can’t focus on what’s in front of you if it’s still in your head.”
Later in the conversation, Sears simply said the whole situation was “terrible.”
Mr. Sears also discussed the Department of Justice’s scrutiny of the NAR. The Justice Department is currently struggling to reopen an investigation into NAR, which has loomed large in the background of recent commission lawsuits.
Last week, the Justice Department further stated that the Sitzer|Barnett lawsuit came two days before final approval of NAR’s landmark settlement.
Mr. Sears denounced the filing.
“What the Department of Justice did last week was extremely disrespectful,” he said.
In particular, the Justice Department’s expression of interest balked at rules that require buyers and agents to enter into a written agreement before viewing a home. This is one of the key practice changes that took effect in August as part of the antitrust settlement. But Sears said this particular issue has not previously been an issue for the Justice Department.
“When I met with them in June, they never talked about it being a bad thing,” Sears said. “They never said there was a problem with their written contract with the buyer.”
Sears also said that during the meeting, one of the Justice Department attorneys referred to NAR “using the language you and I use when talking about murderers, human traffickers, and drug traffickers.”
“It’s very rude,” he added.
LaMacchia then asked what will happen next year when Donald Trump becomes president and has the opportunity to appoint new leadership for the Justice Department.
“I don’t think the Justice Department will necessarily go away,” Sears said, “but I think things will change a little bit.”
Sears explained that he believes some Justice Department attorneys may remain at the agency, but added that he is willing to work with the agency regardless.
“If we can negotiate peace, that’s what I want to do,” Sears said.
Watch the full episode of “Crush It In Real Estate” here:
Email Jim Dalrymple II
