The National Association of Realtors (NAR) has reached a $418 million settlement after a federal jury ruled that the organization and major brokerages had conspired to inflate broker commissions. The Corcoran Group founder Barbara Corcoran joins Yahoo Finance Live to discuss the impact of this settlement on prices in the housing market.
Corcoran believes that the ruling will not alleviate high housing prices. She highlights that the low housing inventory and increased demand have led to even more price increases. Despite this, Corcoran explains why people looking to buy homes should do so “right now. “It’s always my mantra,” she adds, “Not because I’m an ex-real estate broker by any means…but it always is true that the minute you go out into the marketplace when everyone else is out, you’ll always pay more. Why would you way for that?”
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Editor’s note: This article was written by Angel Smith
Video Transcript
– So Barbara, you mentioned confusion, and I think a lot of people are confused, me included, about what this is going to do to the price of homes, right? Because you have the argument out there that if you’re not paying for a fee here, an agent fee, then it makes more sense for the home seller, maybe they could list their house, their home a little bit more– maybe they’ll list it less because they’re not having to deal with those fees.
Then you also have the other side of the argument where this could actually attract more people into potentially buying a home, and get them off the sidelines here if we do see a drop in fees. What’s the ultimate impact on home prices?
BARBARA CORCORAN: I don’t really believe either of those things are going to happen. It’s a neutral. Think of yourself. If you’re selling your home, and if you, let’s say you save 3% with a new ruling and say, I don’t want to pay the buyer’s broker the extra 3%, do you think you’re going to pass that along to the buyer, which a lot of people are saying is the case?
No. Sellers are greedy. It’s a one-time chance to get the most for your house and you’re not going to give that money away. So if you think prices are going to come down, definitely not the case. There is such a shortage of houses right now, that prices have gone up despite everybody singing the blues. 9% this year, pardon me, 6% this year, how did that happen? It happened simply because of supply and demand. There’s a lot of buyers and not enough houses to be available. And that’s what rules the market.
– Do you see prices continuing that move to the upside?
BARBARA CORCORAN: I think the prices are going to go through the roof, especially if interest rates come down another point by year end. I think everybody and their mother and their in-laws is going to come out looking for a new house. And the competition is going to be so fierce that house prices will have to go up.
– So when should people be buying?
BARBARA CORCORAN: Right now, but that’s always my mantra. Always the best time to buy [COUGHS] not because I’m an ex real estate broker, by any means, but I’m sure I’m biased in my attitude toward it. But it always is true that the minute you go out in the marketplace when everybody else is out, you always pay more. Why would you wait for that?
