Why buyers could flood open houses
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Sarah Grillo/Axios
Open houses could get busier.
Why it matters: A new real estate rule requires homebuyers to sign contracts with brokers to tour houses privately.
- And that's making open houses, which don't require such contracts, a smart option for shoppers who aren't ready to commit to an agent.
The big picture: Private showings traditionally represented an "opportunity for the agent to audition for the job," Stephen Brobeck, senior fellow at the Consumer Federation of America, tells Axios.
What they're saying: "Imagine walking into a store to browse and before you are let in the front door you have to sign a contract just to look," wrote a Reddit user on a discussion board for first-time homebuyers.
Catch up quick: The shift is part of a legal settlement the National Association of Realtors (NAR) reached last year that shakes up how agents get paid.
Reality check: Some agents say they're not sweating the change — buyers are already adjusting.
- Home sales have jumped recently but remain historically low, according to NAR data.
The latest: Many brokers are open to signing short-term agreements, like showing one particular home, so buyers don't feel "stuck with us indefinitely," says Nate Johnson, NAR's 2024 vice president of advocacy.
Between the lines: The U.S. Department of Justice has said the new contract rule could hamper broker competition for clients.
- Others say the agreements can be confusing for buyers to understand.
What we're watching: The Justice Department's concerns didn't stop a judge from approving the NAR settlement, though federal prosecutors could still step in.
- The DOJ has scrutinized the real estate industry for decades, including during President Trump's first term.
