TMP equity was up $13K this month, mostly due to peculiar changes in the Valencia and 29th Ave estimates.

Even though we’re up $13K, I think it is mostly ‘noise’ in the data. For example, the Valencia house was up $6K, mainly due to a $13K increase according to Redfin.com.  The 29th Ave house was also up $13K, mainly due to a $36K (!) increase according to Realtor.com.

There is big news in the residential real estate market. CNN reports, incorrectly, that the National Association of Realtors (NAR) settled a lawsuit that “The 6% Commission on Buying or Selling a Home is Gone after Realtors Association Agrees to Seismic Settlement”. The lawsuit was not about the traditional 6% commission. It was about dual agency, the fact that the seller was paying the buyers agent. So how could the buyers agent really act in the best interest, as a ‘fiducary’, for the buyer? There are lots of other claims in this CNN article on the settlement that are misleading:

“The 6% commission, a standard in home purchase transactions, is no more.

In a sweeping move expected to dramatically reduce the cost of buying and selling a home, the National Association of Realtors announced Friday a settlement with groups of homesellers, agreeing to end landmark antitrust lawsuits by paying $418 million in damages and eliminating rules on commissions.

The NAR, which represents more than 1 million Realtors, also agreed to put in place a set of new rules. One prohibits agents’ compensation from being included on listings placed on local centralized listing portals known as multiple listing services, which critics say led brokers to push more expensive properties on customers. Another ends requirements that brokers subscribe to multiple listing services — many of which are owned by NAR subsidiaries — where homes are given a wide viewing in a local market. Another new rule will require buyers’ brokers to enter into written agreements with their buyers.

The agreement effectively will destroy the current homebuying and selling business model, in which sellers pay both their broker and a buyer’s broker, which critics say have driven housing prices artificially higher.

By some estimates, real estate commissions are expected to fall 25% to 50%, according to TD Cowen Insights.”

I don’t think that it “…effectively destroy(s) the current homebuying and selling business model”. There will still be seller’s agents and buyer’s agents. Their fees, at whatever level, will still come out of the proceeds of the transaction. There will be downward pressure on sales fees, i.e., commissions. This is the result of market forces, not this settlement. There will be more forms for buyers and sellers to sign to specify the “new” contractual arrangements. Our Jeff explains the impact better than I can in this informative video:

And Jeff is multi-talented. He is not just a real estate expert; he can also paint a room:

I’m renaming him Leonardo da Sutherlin, after Leonardo da Vinci. Here are two da Vinci masterpieces: The Mona Lisa and The Last Supper:

Those are good, but not as good as that room when Leonardo da Sutherlin finished his masterpiece.