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In a lengthy new interview, National Association of Realtors President Kevin Sears called the Justice Department “disrespectful,” and said his organization settled antitrust commission cases to avoid leaving other industry players high and dry.
Sears commented on an episode of Anthony Lamacchia’s podcast, Crush It In Real Estate, that premiered Thursday. Speaking to Lamacchia, Sears explained that NAR had settlement discussions before, during and after last year’s case in Sitzer | The Burnett case – a trial that ended in a jury verdict against a trade association and major franchisors. Sears thought NAR was close to a deal several times, he said during the podcast, but each time “the goal line kept getting moved.”
After the decision, NAR had several options. One was to file an appeal, but Sears said “in order to file an appeal we would have had to declare bankruptcy” because NAR did not have enough money – $1.8 billion – to post a bond in the case. Bankruptcy would have protected NAR from judgment and copycat lawsuits during the trial, Sears said, adding that he believes the organization would have won the appeal.
“But those copycat cases would have slowly made their way into the court system,” Sears added. “For agents, brokers, agencies, MLSs to name a few there would have been paying millions and millions of dollars in defense costs.”
Sears said filing for bankruptcy would also limit NAR’s ability to do advocacy work in Washington, DC.
For all those reasons, the option was a “non-starter” in his mind. So, the fix.
Anthony Lamacchia, left, with Kevin Sears on a new episode of Crush It In Real Estate. Credit: Crush It In Real Estate
Still, Sears admitted it wasn’t fully satisfied with the deal. Among other things, he complained that large brokerages with sales of more than $2 billion were left out — a result that meant some brokerage leaders were “rightfully angry.”
“I am a family man; “I feel like we left out some of the family,” Sears said, adding that the plaintiffs refused to include major brokerages in the NAR settlement. “That was one of the times when the goal line went away, when they came at us.”
Recently, Sears has received emails from people asking how happy he can be that the settlement — announced by the NAR in March — just received final approval.
“It’s not that I’m happy, but we fought for a resolution, we fought for it to be approved, we will fight for the case to continue to be appealed, because that way it can be in our rearview mirror,” said Sears. “We couldn’t look to the future, we couldn’t focus on what’s in front of us, if that was still hanging over our heads.”
Later in the interview, speaking about the whole situation, Sears simply said “it’s bad.”
Sears also discussed the Justice Department’s investigation of NAR. The DOJ is currently fighting to reopen the investigation into NAR and has been coming up behind the commission’s lawsuits in recent years.
Last week, the DOJ also filed a statement of interest in Sitzer | Burnett’s lawsuit two days before the NAR officially settled the case received final approval.
Sears has criticized the filing.
“What the Department of Justice did last week was disrespectful,” he said.
Among other things, the DOJ’s statement of interest conflicts with laws that require buyers and sellers to make written agreements before visiting homes — one of the key changes that went into effect in August as part of the antitrust settlement. But Sears said that issue has never been the DOJ’s contention.
“When we met with them in June, they never once talked about that being a bad thing,” Sears said. “They never once said they had a problem with the written agreement with the buyer.”
Sears also said that at the meeting, one of the DOJ attorneys referred to the NAR as “using a term that you and I would use when talking about murderers, human traffickers or drug traffickers.”
“It’s very disrespectful,” he added.
Lamacchia later asked what might happen next year, when Donald Trump takes office and has the opportunity to appoint new leadership over the DOJ.
“I don’t think the Justice Department is really going to go away,” Sears replied, “but I think things are going to be a little bit different.”
Sears explained that he believes some DOJ attorneys may stay, but even so, he added that he is willing to cooperate with the agency.
“If we can negotiate peacefully,” Sears said, “then that’s what I want to do.”
Watch the full episode of Crush It In Real Estate here:
https://www.youtube.com/watch?v=vUKUk98weUc
Email Jim Dalrymple II
