Jury Finds Realtors Conspired to Keep Commissions High (1 Viewer)

[Zow]

Well, this thread was timely. I can't get into specific details of course, but just had to deal with a realtor who is angry about my advice to a client (a seller) that a particular lien had to be disclosed to the buyer in a pending sale for fear of civil liability later and the realtor is very reluctant to disclose still. Fun!

 

[CletiusMaximus]

Well, this thread was timely. I can't get into specific details of course, but just had to deal with a realtor who is very reluctant to and angry about my advice to a client (a seller) that a particular lien had to be disclosed to the buyer in a pending sale for fear of civil liability later. Fun!

I have two broker lawsuits right now - in both cases the listing broker is being sued by the buyers for "undisclosed" conditions which were well-known and obvious, discussed, stated in the marketing materials, easily discoverable, etc.

 

[bigbottom]

Well, this thread was timely. I can't get into specific details of course, but just had to deal with a realtor who is angry about my advice to a client (a seller) that a particular lien had to be disclosed to the buyer in a pending sale for fear of civil liability later and the realtor is very reluctant to disclose still. Fun!

Wouldn’t the title company discover and disclose this? Or is the buyer paying cash and foregoing a title company?

 

[Sand]

Is this real?

I’m sorry - but a seller by now in this world of finding info on the internet can find out on their own the cost of selling a house. If they don‘t like the rate that’s on them to negotiate.

And there are plenty of resources available online to sell your house on your own. Seriously - is this an Onion article?

I would apply this question to car dealerships. Why do we have them?

Honest answer - because they have good lobbyists on the state level. In Alabama a new car must be sold through a dealership. No Tesla stores in state at all.

 

[culdeus]

I get it that there are good realtors, I'm sure some are good people too. The fact that good realtors exist doesn't mean that bad realtors should get paid the same rate.

If I find a house on zillow, and it meets my needs I should be able to hire a home inspector and get a title search and have the title company run the documents from there. I should be able to setup appointments to view the house without a buyers broker, and not pay extra for that service.

This is how it works in virtually the entire rest of the planet, yet we seem to think it can't possibly work here.

There's also very little reason to pay sellers brokers large % in the day of internet marketing. They aren't buying ads in newspapers and whatever anymore. Their work consists of running comps, which AI can easily handle today and organizing some photographs which can be arranged on a flat fee.

These stories of "ZOMG MY REALTOR SAVED MY ***" are disingenuous and probably akin to people saying they know somebody that died of a flu shot. Yeah, ok. It's a complicated transaction and if 1 in million go off the rails, well fine.

Realtors suck, they suck way too much equity out of the home process and should be the first group of leeches taken away by the aliens for anal probing.

 

[Chadstroma]

Well, this thread was timely. I can't get into specific details of course, but just had to deal with a realtor who is angry about my advice to a client (a seller) that a particular lien had to be disclosed to the buyer in a pending sale for fear of civil liability later and the realtor is very reluctant to disclose still. Fun!

For something that could have big negative implications for me with what the law requires....listen to a realtor... listen to a lawyer... what to do... what to do.

 

[Chadstroma]

I get it that there are good realtors, I'm sure some are good people too. The fact that good realtors exist doesn't mean that bad realtors should get paid the same rate.

If I find a house on zillow, and it meets my needs I should be able to hire a home inspector and get a title search and have the title company run the documents from there. I should be able to setup appointments to view the house without a buyers broker, and not pay extra for that service.

This is how it works in virtually the entire rest of the planet, yet we seem to think it can't possibly work here.

There's also very little reason to pay sellers brokers large % in the day of internet marketing. They aren't buying ads in newspapers and whatever anymore. Their work consists of running comps, which AI can easily handle today and organizing some photographs which can be arranged on a flat fee.

These stories of "ZOMG MY REALTOR SAVED MY ***" are disingenuous and probably akin to people saying they know somebody that died of a flu shot. Yeah, ok. It's a complicated transaction and if 1 in million go off the rails, well fine.

Realtors suck, they suck way too much equity out of the home process and should be the first group of leeches taken away by the aliens for anal probing.

There is a lot I don't really disagree with there but I will say 1 in a million is no where near realistic (though I am sure you are using hyperbole).

 

[Stoneworker]

If I find a house on zillow, and it meets my needs I should be able to hire a home inspector and get a title search and have the title company run the documents from there. I should be able to setup appointments to view the house without a buyers broker, and not pay extra for that service.

There's also very little reason to pay sellers brokers large % in the day of internet marketing. They aren't buying ads in newspapers and whatever anymore. Their work consists of running comps, which AI can easily handle today and organizing some photographs which can be arranged on a flat fee.

Realtors suck, they suck way too much equity out of the home process and should be the first group of leeches taken away by the aliens for anal probing.

I'm just looking for more ala carte services and pricing. Different types of bundles. Pick and choose what you want to DIY based on a consumer's own comfort level and then outsource that which may be too complex or labor-intensive.

Realtors/brokers can definitely add value but that value has been diminished with technology.

The fixed fee / all-or-nothing pricing model based on a home's valuation is beyond outdated.

As is the seller's agent guaranteeing the buyer's agent's compensation.

 

[culdeus]

I get it that there are good realtors, I'm sure some are good people too. The fact that good realtors exist doesn't mean that bad realtors should get paid the same rate.

If I find a house on zillow, and it meets my needs I should be able to hire a home inspector and get a title search and have the title company run the documents from there. I should be able to setup appointments to view the house without a buyers broker, and not pay extra for that service.

This is how it works in virtually the entire rest of the planet, yet we seem to think it can't possibly work here.

There's also very little reason to pay sellers brokers large % in the day of internet marketing. They aren't buying ads in newspapers and whatever anymore. Their work consists of running comps, which AI can easily handle today and organizing some photographs which can be arranged on a flat fee.

These stories of "ZOMG MY REALTOR SAVED MY ***" are disingenuous and probably akin to people saying they know somebody that died of a flu shot. Yeah, ok. It's a complicated transaction and if 1 in million go off the rails, well fine.

Realtors suck, they suck way too much equity out of the home process and should be the first group of leeches taken away by the aliens for anal probing.

There is a lot I don't really disagree with there but I will say 1 in a million is no where near realistic (though I am sure you are using hyperbole).

Explain why title insurance can cover the deed having some indian burial ground clause, but we can't have insurance for some catastrophic miss in due dilligence on the above ground side?

And that % commission covers that in the event it does happen? No. It is just at best one more set of eyes on things. Nowhere else on the planet requires this, how many residential RE transactions go crappy literally anywhere else? Hell, Canada?

 

[BassNBrew]

I get it that there are good realtors, I'm sure some are good people too. The fact that good realtors exist doesn't mean that bad realtors should get paid the same rate.

If I find a house on zillow, and it meets my needs I should be able to hire a home inspector and get a title search and have the title company run the documents from there. I should be able to setup appointments to view the house without a buyers broker, and not pay extra for that service.

This is how it works in virtually the entire rest of the planet, yet we seem to think it can't possibly work here.

There's also very little reason to pay sellers brokers large % in the day of internet marketing. They aren't buying ads in newspapers and whatever anymore. Their work consists of running comps, which AI can easily handle today and organizing some photographs which can be arranged on a flat fee.

These stories of "ZOMG MY REALTOR SAVED MY ***" are disingenuous and probably akin to people saying they know somebody that died of a flu shot. Yeah, ok. It's a complicated transaction and if 1 in million go off the rails, well fine.

Realtors suck, they suck way too much equity out of the home process and should be the first group of leeches taken away by the aliens for anal probing.

There is a lot I don't really disagree with there but I will say 1 in a million is no where near realistic (though I am sure you are using hyperbole).

Explain why title insurance can cover the deed having some indian burial ground clause, but we can't have insurance for some catastrophic miss in due dilligence on the above ground side?

And that % commission covers that in the event it does happen? No. It is just at best one more set of eyes on things. Nowhere else on the planet requires this, how many residential RE transactions go crappy literally anywhere else? Hell, Canada?

1. United States​

When it comes to the number of lawyers per capita globally, the United States easily has the lead. There are more lawyers per capita in the United States than in any other country. In the United States, there are 1.26 million lawyers. Most lawyers are centered in New York, with California and Florida close behind. Statistics show one lawyer for every 248 residents in the United States.

 

[BassNBrew]

I get it that there are good realtors, I'm sure some are good people too. The fact that good realtors exist doesn't mean that bad realtors should get paid the same rate

If I find a house on zillow, and it meets my needs I should be able to hire a home inspector and get a title search and have the title company run the documents from there. I should be able to setup appointments to view the house without a buyers broker, and not pay extra for that service.

You can. Anyone can market their property on Zillow. Any buyer can contact the seller or the agent representing them at no cost to them. Also the Realtors are financing Zillow.

This is how it works in virtually the entire rest of the planet, yet we seem to think it can't possibly work here.

There's also very little reason to pay sellers brokers large % in the day of internet marketing. They aren't buying ads in newspapers and whatever anymore. Their work consists of running comps, which AI can easily handle today and organizing some photographs which can be arranged on a flat fee.

These stories of "ZOMG MY REALTOR SAVED MY ***" are disingenuous and probably akin to people saying they know somebody that died of a flu shot. Yeah, ok. It's a complicated transaction and if 1 in million go off the rails, well fine.

Realtors suck, they suck way too much equity out of the home process and should be the first group of leeches taken away by the aliens for anal probing.

I'm not going to argue the value side as I've put a lot of thought into this and there are low cost options available if you look around. As a current car buyer, I will say it's nice not have to go to a half dozen internet sites and dealer sites to see all the inventory that's available. The Realtor are paying for the mls system. In the used car industry buyers and sellers can strike deals on their own, yet most people decide to buy and sell through a dealer. We could tear down the current system and migrate to one where a used home dealer buys your home 10-15% below market value and then sells it to a buyer and charges them a documentation and re-conditioning fee. Oh yeah...that model came out a few years back and didn't do so well. Despite all that, a majority of people buy and sell through dealers. If you could pay 6% to someone to get you top dollar for your car and your didn't have to market it, test drive it with them, worry about them shanking you, field the tire kicker calls, etc....you think that might have legs?

Not that you should be paying for this, but based on my experience Realtors are also a net benefit in fair housing

 

[Zegras11]

but based on my experience Realtors are also a net benefit in fair housing

this is a really good point.

All the anti-realtors in here I doubt have an understanding of the things you can and can not say/do/disclose when you try to sell a home. The risk to law suits in my mind goes up an insane amount when someone tries to sell their own home without prior experience. I took my 18.5 hours of classes last week to renew, the only two mandatory classes spent 7.5 of the hours talking about RE cases, 50% in Idaho, 50% the rest of the US. Almost of every deal has some degree of complexity to it.

The market already mostly takes care of rates by price, I think the answer here is to educate sellers that rates are negotiable to the point where it should be a signed, boxed out section of every listing agreement in the US, on page one.

Having buyers pay the buyers agent fee IMO is a real bad idea. I can prove in a heart beat that it would be discriminatory to minorities and people under 30, many of whom could not afford it.

 

[Stoneworker]

I'd still like to hear a good explanation from the realtors as to why the standard fee for a $1 million house ($60K) is double that for a $500K house ($30K).

What exactly is being done to execute the $1 million home transaction that warrants $30K more to the brokers?

The transaction process itself is no different. And no apparent reason why I couldn't use the same "high-quality" broker for both. It seems everyone just gets paid more to do the exact same things.

I get it that it's "negotiable," but in the practical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

 

[Stoneworker]

Having buyers pay the buyers agent fee IMO is a real bad idea. I can prove in a heart beat that it would be discriminatory to minorities and people under 30, many of whom could not afford it.

That's a government problem. Not a consumer problem.

 

[the moops]

Had a realtor we liked. Bought and sold two homes with him. On our third sale, he held an open house, and a guy showed up with no agent, and our agent ended up schmoozing him enough that the guy was ready to make an offer. With the guy having no agent, our agent offered to be his agent. Our agent called us and informed us he was going to be acting as a dual agent. We kindly told him to go **** off, but were still stuck with using him as our selling agent because of our contract.

It really soured me on him. He tried to convince us that he would be acting in out best interest, but when pressed, he admitted that he also would told the buyer that he would be acting in his best interest. When asked how that could possibly work, he gave some ******** answer about how he would find agreeable terms for both. I told him it sounded like he was acting in only his own best interest and not either buyer or seller. He got all huffy and hung up on me. Called back later and said that the potential buyer backed out anyway, so he was just out agent now.

Haven't talked to that sleezeball in years.

 

[DA RAIDERS]

Had a realtor we liked. Bought and sold two homes with him. On our third sale, he held an open house, and a guy showed up with no agent, and our agent ended up schmoozing him enough that the guy was ready to make an offer. With the guy having no agent, our agent offered to be his agent. Our agent called us and informed us he was going to be acting as a dual agent. We kindly told him to go **** off, but were still stuck with using him as our selling agent because of our contract.

It really soured me on him. He tried to convince us that he would be acting in out best interest, but when pressed, he admitted that he also would told the buyer that he would be acting in his best interest. When asked how that could possibly work, he gave some ******** answer about how he would find agreeable terms for both. I told him it sounded like he was acting in only his own best interest and not either buyer or seller. He got all huffy and hung up on me. Called back later and said that the potential buyer backed out anyway, so he was just out agent now.

Haven't talked to that sleezeball in years.

Should have negotiated the fee down to 3.5 or 4% prior to signing a contract. Or done an addendum to include it after it came up.

 

[whoknew]

but based on my experience Realtors are also a net benefit in fair housing

this is a really good point.

All the anti-realtors in here I doubt have an understanding of the things you can and can not say/do/disclose when you try to sell a home. The risk to law suits in my mind goes up an insane amount when someone tries to sell their own home without prior experience. I took my 18.5 hours of classes last week to renew, the only two mandatory classes spent 7.5 of the hours talking about RE cases, 50% in Idaho, 50% the rest of the US. Almost of every deal has some degree of complexity to it.

The market already mostly takes care of rates by price, I think the answer here is to educate sellers that rates are negotiable to the point where it should be a signed, boxed out section of every listing agreement in the US, on page one.

Having buyers pay the buyers agent fee IMO is a real bad idea. I can prove in a heart beat that it would be discriminatory to minorities and people under 30, many of whom could not afford it.

Then won't they just lower the offer price of the house? Whether the broker agent fee is going through the seller or not, its always just reflected in the purchase price, right?

 

[Stoneworker]

Having buyers pay the buyers agent fee IMO is a real bad idea. I can prove in a heart beat that it would be discriminatory to minorities and people under 30, many of whom could not afford it.

Then won't they just lower the offer price of the house? Whether the broker agent fee is going through the seller or not, its always just reflected in the purchase price, right?

It's not the amount they're worried about. It's the cash out of pocket to pay the buyer's agent. In the current model they figure sellers can just take it out of their proceeds and not even notice it's gone.

 

[culdeus]

I'd still like to hear a good explanation from the realtors as to why the standard fee for a $1 million house ($60K) is double that for a $500K house ($30K).

What exactly is being done to execute the $1 million home transaction that warrants $30K more to the brokers?

The transaction process itself is no different. And no apparent reason why I couldn't use the same "high-quality" broker for both. It seems everyone just gets paid more to do the exact same things.

I get it that it's "negotiable," but in the practical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

Same reason why it takes so much effort to bring and open a $100 bottle of wine than a $50. You gotta have expertise to open those expensive bottles amiright?

 

[bigbottom]

Having buyers pay the buyers agent fee IMO is a real bad idea. I can prove in a heart beat that it would be discriminatory to minorities and people under 30, many of whom could not afford it.

Then won't they just lower the offer price of the house? Whether the broker agent fee is going through the seller or not, its always just reflected in the purchase price, right?

It's not the amount they're worried about. It's the cash out of pocket to pay the buyer's agent. In the current model they figure sellers can just take it out of their proceeds and not even notice it's gone.

Why can’t the buyer fee get rolled into the mortgage?

 

[Chadstroma]

Why can’t the buyer fee get rolled into the mortgage?

You could.... in the sense that you would take a higher rate for a lender credit. Lender credits can be applied to all closing costs but never down payment.

You can't roll it in in the sense of adding it to the balance. The big problem on that is that a big part of underwriting is that down payment which beyond giving 'skin in the game' helps provides for a buffer so to speak if values decrease and you need to sell, you can do it because of the equity in the property. One of the biggest issues with the 2008 RE crash was that so many loans were 100% LTV or even higher. All those properties became under water quickly and it left no options for the owner to sell and then the properties went into foreclosure.

 

[Chadstroma]

Had a realtor we liked. Bought and sold two homes with him. On our third sale, he held an open house, and a guy showed up with no agent, and our agent ended up schmoozing him enough that the guy was ready to make an offer. With the guy having no agent, our agent offered to be his agent. Our agent called us and informed us he was going to be acting as a dual agent. We kindly told him to go **** off, but were still stuck with using him as our selling agent because of our contract.

It really soured me on him. He tried to convince us that he would be acting in out best interest, but when pressed, he admitted that he also would told the buyer that he would be acting in his best interest. When asked how that could possibly work, he gave some ******** answer about how he would find agreeable terms for both. I told him it sounded like he was acting in only his own best interest and not either buyer or seller. He got all huffy and hung up on me. Called back later and said that the potential buyer backed out anyway, so he was just out agent now.

Haven't talked to that sleezeball in years.

Only about 8 or 9 states either heavily restrict or outlaw dual agency. I think it should be all 50 states.

The only positive of it is to the RE agent so they can get both sides of the deal. A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

 

[fruity pebbles]

Only realtors defend realtors

 

[Stoneworker]

A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

This is crazy good insight.

Over the summer there was a realtor open house on my street. Three days later the house was under contract (good for them).

But the funny thing is that exactly one week after that I had a text on my phone from the seller's agent saying she had a "buyer from out of state who just loves the neighborhood and is ready to buy and would I be interested in selling?"

Hardly a coincidence

 

[FatMax]

A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

This is crazy good insight.

Over the summer there was a realtor open house on my street. Three days later the house was under contract (good for them).

But the funny thing is that exactly one week after that I had a text on my phone from the seller's agent saying she had a "buyer from out of state who just loves the neighborhood and is ready to buy and would I be interested in selling?"

Hardly a coincidence

Every time I have went to an open house on my block, the house was full of ..... my neighbors, just checking the place out. The same reason I was there. None of us were buying.

 

[Chadstroma]

Only realtors defend realtors

No, I will defend the good ones all day long. There are really two problems, one is that well move than a majority are absolute trash. The second is that there are, IMO, severe issues that have not been addressed and are either based on this is how it has been done for 50 years or through the massive lobbying power of NAR. Largely because of those things not being addressed, fixed or improved is a reason why you have so many trash RE agents around. The bar is low and it is as seen as an 'easy' profession to make a lot of money in. Most of those going for the easy money are not interested in actually investing in themselves to get really good at what they do.

 

[Chadstroma]

A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

This is crazy good insight.

Over the summer there was a realtor open house on my street. Three days later the house was under contract (good for them).

But the funny thing is that exactly one week after that I had a text on my phone from the seller's agent saying she had a "buyer from out of state who just loves the neighborhood and is ready to buy and would I be interested in selling?"

Hardly a coincidence

You went to the Open House and signed in?

 

[fruity pebbles]

Only realtors defend realtors

No, I will defend the good ones all day long. There are really two problems, one is that well move than a majority are absolute trash. The second is that there are, IMO, severe issues that have not been addressed and are either based on this is how it has been done for 50 years or through the massive lobbying power of NAR. Largely because of those things not being addressed, fixed or improved is a reason why you have so many trash RE agents around. The bar is low and it is as seen as an 'easy' profession to make a lot of money in. Most of those going for the easy money are not interested in actually investing in themselves to get really good at what they do.

They are so few and far between in my dealings, I’m not even sure it’s worth bringing up. I’ve met one id consider a good one. The rest were there solely to make a buck at whoever’s expense. Personally, I’d put them in the same category as used car dealers. Few good ones but the profession as a whole is made up of shady characters.

 

[BassNBrew]

I'd still like to hear a good explanation from the realtors as to why the standard fee for a $1 million house ($60K) is double that for a $500K house ($30K).

What exactly is being done to execute the $1 million home transaction that warrants $30K more to the brokers?

The transaction process itself is no different. And no apparent reason why I couldn't use the same "high-quality" broker for both. It seems everyone just gets paid more to do the exact same things.

I get it that it's "negotiable," but in the practical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

I can only think of one reason and it's not particularly a good one. The million dollar commission is financing the the guy who is selling his mobile home. Realistically the % on a low dollar property should be 10-15%.

Why does the county tax twice as much on the million dollar home when the half million dollar home next door uses the same streets, schools, and poop drain?

Personally I discount based on price, distance, and condition on the front end before being asked. Mainly because I agree with your thesis.

 

[Chadstroma]

I'd still like to hear a good explanation from the realtors as to why the standard fee for a $1 million house ($60K) is double that for a $500K house ($30K).

What exactly is being done to execute the $1 million home transaction that warrants $30K more to the brokers?

The transaction process itself is no different. And no apparent reason why I couldn't use the same "high-quality" broker for both. It seems everyone just gets paid more to do the exact same things.

I get it that it's "negotiable," but in the practical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

I can only think of one reason and it's not particularly a good one. The million dollar commission is financing the the guy who is selling his mobile home. Realistically the % on a low dollar property should be 10-15%.

Why does the county tax twice as much on the million dollar home when the half million dollar home next door uses the same streets, schools, and poop drain?

Personally I discount based on price, distance, and condition on the front end before being asked. Mainly because I agree with your thesis.

One other thing is on those higher property value transactions is much more at risk for getting sued than the low value transactions. Every single individual lawsuit I have ever heard of in RE has been on the upper end of the housing market. Even if they should be sued on a $150K purchase for gross negligence the likelihood of that happening is almost non-existent but on the upper end I have heard of the most eye rolling lawsuits. Play with the big dogs and you might get bit. The puppies only try to bark.

 

[Zegras11]

I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

except for the first weekend, this is a true statement.

 

[Stoneworker]

A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

This is crazy good insight.

Over the summer there was a realtor open house on my street. Three days later the house was under contract (good for them).

But the funny thing is that exactly one week after that I had a text on my phone from the seller's agent saying she had a "buyer from out of state who just loves the neighborhood and is ready to buy and would I be interested in selling?"

Hardly a coincidence

You went to the Open House and signed in?

No, I didn't go to the open house. Not sure how the seller's agent got my info.

 

[Stoneworker]

ical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

I can only think of one reason and it's not particularly a good one. The million dollar commission is financing the the guy who is selling his mobile home. Realistically the % on a low dollar property should be 10-15%.

Why does the county tax twice as much on the million dollar home when the half million dollar home next door uses the same streets, schools, and poop drain?

Personally I discount based on price, distance, and condition on the front end before being asked. Mainly because I agree with your thesis.

Thanks for the reply. Your bolded statement is a useful analogy, but I would make a distinction.

When a county taxes property, the county is funding public works infrastructure and therefore (ostensibly, at least) the tax rates are part of a voter-approved progressive tax system.

The "extra" fees from one private real estate transaction should have no obligation to directly or indirectly subsidize those from other private citizens' transactions (IMO).

 

[Chadstroma]

A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

This is crazy good insight.

Over the summer there was a realtor open house on my street. Three days later the house was under contract (good for them).

But the funny thing is that exactly one week after that I had a text on my phone from the seller's agent saying she had a "buyer from out of state who just loves the neighborhood and is ready to buy and would I be interested in selling?"

Hardly a coincidence

You went to the Open House and signed in?

No, I didn't go to the open house. Not sure how the seller's agent got my info.

huh... interesting.... well, I respect the hustle.

 

[Stoneworker]

One other thing is on those higher property value transactions is much more at risk for getting sued than the low value transactions. Every single individual lawsuit I have ever heard of in RE has been on the upper end of the housing market. Even if they should be sued on a $150K purchase for gross negligence the likelihood of that happening is almost non-existent but on the upper end I have heard of the most eye rolling lawsuits. Play with the big dogs and you might get bit. The puppies only try to bark.

I can see this, as well as perhaps a higher standard as it relates to more "polished" presentation skills from the agents (as potentially with the $100 vs. $1k bottle of wine that others have brought up.

Just not to the degree of $30k difference is of course my point.

 

[Stoneworker]

A RE agent I talked to recently told me that there is only one reason to do open houses and one reason only- gain buyer clients.

This is crazy good insight.

Over the summer there was a realtor open house on my street. Three days later the house was under contract (good for them).

But the funny thing is that exactly one week after that I had a text on my phone from the seller's agent saying she had a "buyer from out of state who just loves the neighborhood and is ready to buy and would I be interested in selling?"

Hardly a coincidence

You went to the Open House and signed in?

No, I didn't go to the open house. Not sure how the seller's agent got my info.

huh... interesting.... well, I respect the hustle.

Yep. No problem with it either just underscored your point that the new buyer client came from the open house

 

[Buckna]

I'd still like to hear a good explanation from the realtors as to why the standard fee for a $1 million house ($60K) is double that for a $500K house ($30K).

What exactly is being done to execute the $1 million home transaction that warrants $30K more to the brokers?

The transaction process itself is no different. And no apparent reason why I couldn't use the same "high-quality" broker for both. It seems everyone just gets paid more to do the exact same things.

I get it that it's "negotiable," but in the practical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

I can only think of one reason and it's not particularly a good one. The million dollar commission is financing the the guy who is selling his mobile home. Realistically the % on a low dollar property should be 10-15%.

Why does the county tax twice as much on the million dollar home when the half million dollar home next door uses the same streets, schools, and poop drain?

Personally I discount based on price, distance, and condition on the front end before being asked. Mainly because I agree with your thesis.

I agree with the thesis as well. I think the only other thing I can think of to add is true higher end properties do sometimes require a lot more work. I’m not talking about high priced areas where $1MM gets you a 3-2 starter home though. On the higher end you are paying for a true marketing plan with a team and real advertising (sometimes nationwide even international), i’ve seen some fun stuff like where open houses are serving champagne and catered with live entertainment. It’s well beyond what many of the realtors out there promise as marketing which might only be a website and an open house. This is going to apply to only the high-end market though.

Aside from that would be just the general reminder we’ve been in a sellers market (to an extreme sellers market post Covid) for nearly a decade. Most people either don’t remember or are too young to have been through a balanced market or much less a buyers market. I mean the general consensus is a “balanced market” is the average house takes 6 months to sell, not 6 days or first weekend people were seeing two years ago. It was such a bonanza lots of people became agents chasing the easy money and hence a lot of the stories about “my agent didn’t have to do anything.” Thankfully the massive slam on the brakes by the Fed will shake out a lot of the part timers and many of the ones who don’t really know what they are doing.

I was laughing at a reddit story the other day, some guy agent was posting about how he was quitting for essentially reading through the lines because things had gotten too hard. He had grown his business to a team and was rolling in money the last few years but now they’d had to let people go and they weren’t making any money. When did the guy get started? 2016! He’s never had to hustle and apparently did a crap-tastic job taking care of his previous clients who weren’t coming back for repeat business due to good service or great relationships. The guys business model was basically to ride the tide on a historic bull market in houses. Rightfully people ripped into his “woe-is-me” story about how hard the real estate biz is now that rates have gone up.

 

[Chadstroma]

I'd still like to hear a good explanation from the realtors as to why the standard fee for a $1 million house ($60K) is double that for a $500K house ($30K).

What exactly is being done to execute the $1 million home transaction that warrants $30K more to the brokers?

The transaction process itself is no different. And no apparent reason why I couldn't use the same "high-quality" broker for both. It seems everyone just gets paid more to do the exact same things.

I get it that it's "negotiable," but in the practical world not really since there is no way on this planet the $1mm house gets done at 3%. And if it were, that would just prove that the extra $30K is pure profit.

I can only think of one reason and it's not particularly a good one. The million dollar commission is financing the the guy who is selling his mobile home. Realistically the % on a low dollar property should be 10-15%.

Why does the county tax twice as much on the million dollar home when the half million dollar home next door uses the same streets, schools, and poop drain?

Personally I discount based on price, distance, and condition on the front end before being asked. Mainly because I agree with your thesis.

I agree with the thesis as well. I think the only other thing I can think of to add is true higher end properties do sometimes require a lot more work. I’m not talking about high priced areas where $1MM gets you a 3-2 starter home though. On the higher end you are paying for a true marketing plan with a team and real advertising (sometimes nationwide even international), i’ve seen some fun stuff like where open houses are serving champagne and catered with live entertainment. It’s well beyond what many of the realtors out there promise as marketing which might only be a website and an open house. This is going to apply to only the high-end market though.

Aside from that would be just the general reminder we’ve been in a sellers market (to an extreme sellers market post Covid) for nearly a decade. Most people either don’t remember or are too young to have been through a balanced market or much less a buyers market. I mean the general consensus is a “balanced market” is the average house takes 6 months to sell, not 6 days or first weekend people were seeing two years ago. It was such a bonanza lots of people became agents chasing the easy money and hence a lot of the stories about “my agent didn’t have to do anything.” Thankfully the massive slam on the brakes by the Fed will shake out a lot of the part timers and many of the ones who don’t really know what they are doing.

I was laughing at a reddit story the other day, some guy agent was posting about how he was quitting for essentially reading through the lines because things had gotten too hard. He had grown his business to a team and was rolling in money the last few years but now they’d had to let people go and they weren’t making any money. When did the guy get started? 2016! He’s never had to hustle and apparently did a crap-tastic job taking care of his previous clients who weren’t coming back for repeat business due to good service or great relationships. The guys business model was basically to ride the tide on a historic bull market in houses. Rightfully people ripped into his “woe-is-me” story about how hard the real estate biz is now that rates have gone up.

I made about 20 introduction calls to new agents today. I actually got a hold of three. Two of them told me that they are leaving the industry. These are producing RE agents too so not just part timers. There is a massive exodus of RE agents and MLO's right now.... just like there was a massive influx of new ones over the past few years. It is getting harder and harder... and many are bailing out.

*for clarification purposes "new agents" are not newly licensed agents but new to me with no prior relationship

 

[Chadstroma]

RE/MAX has no regrets over $55M commission lawsuit settlements.
(HousingWire by Brooklee Han). When we look at history, commission rates have been shown to follow supply and demand," RE/MAX CEO Nick Bailey said. In light of the recent verdict in the Sitzer/Burnett commission lawsuit, RE/MAX executives expressed great satisfaction about their decision to settle the suit - as well as the Moehrl and Nosalek lawsuits - for $55 million before it headed to trial.

"While it came as a significant financial cost, we believe it was absolutely the best decision for all of our stakeholders, affiliate, employees, shareholders, and debt holders alike," Steve Joyce, RE/MAX's CEO, told investors and analysts during the firms third quarter 2023 earnings call with investors Friday morning.

Although some have speculated that the approval of RE/MAX's settlement, as well as the settlement reached by Anywhere Real Estate, may be put into jeopardy by Judge Stephen Bough's yet to be announced injunction and final ruling on the suit (as well as a potential DOJ action), RE/MAX executives told analysts on the call that they were confident it would be approved. Executives also expressed confidence that the terms of the settlement agreement would not have a significant impact on the firm's profits and financial viability moving forward. "In the settlement we agreed to certain business practice changes, many of which we already do," Nick Bailey, the president of RE/MAX said. "Apart from payment of the settlement amount [of $55 million], we do not expect the terms of the proposed settlement to have material impact on results of operations and cash flows." According to Bailey, the franchisees and brokers he has spoken with are pleased with the settlements.

"Most of the brokers are really working hard to keep their agents focused on the business," Bailey said. "There are still people out there buying and selling, but as things progress, if there are additional changes that affect the manner in which they do business, then they will make those changes." Regardless of what these changes may look like, Joyce told investors that the strength of the RE/MAX brand would help carry the firm through any unexpected challenges that may arise.

What happens to commission rates? Buyer's agency?
Despite the executives' confidence and reassurances, analysts asked Bailey and Joyce to walk them through a variety of scenarios of what the fallout from the Sitzer/Burnett, as well as Moehrl, Nosalek and Gibson lawsuits, may look like. One of the largest concerns expressed was what the impact to commission rates will be.

"When we look at history, commission rates have been shown to follow supply and demand," Bailey said. "Commission rates went down in the mid-2000s, they came back up during the Great Recession and they've come down even sub-5% since then," Bailey said. "I think that we are going to see much of the same - that this is going to be driven more by supply and demand."

Bailey was also asked to weigh in on buyer's agency and the viability of buyers' brokers if cooperative compensation goes away. "In some of those countries where we operate, where there is no buyer's agency, it can be very difficult of buyers and difficult for consumers as a whole. In some of them it is just a 'buyer beware' mentality," Bailey said. For this reason, Bailey said RE/MAX firmly supports buyer's agency and believes that "it serves consumers very, very well."

"A dozen years ago, when tech really started to take a center seat, not just on home search, but just in all the data that has became available to potential buyers, we found, and the data showed this, that consumers are using agents at a higher rate today than they ever have before," Bailey added.

 

[Stoneworker]

This was the actual recording used in the trial between discount brokerage REX and a buyer's agent, used as evidence that properties not listed in the MLS are blacklisted and not shown to sellers who might want to use an alternative brokerage model. Source: WSJ Interview

REX rep: Thank you for calling REX. This is Logan.

Buyer's Agent: Hey, I'm calling because I see an active listing on your website here, but it's nowhere to be found in our MLS.

REX rep: All right, I do see that one here. The reason why you didn't see it on the MLS is because we actually don't advertise any of our properties on the MLS. With that being said, our sellers are not obligated to pay that buyer's agent commission. However, we'd never want you to work for free. Typically, with a buyer agent in your position, the way you're compensated would be by the buyer. But we do make that process very simple with our offer online submission process.

Buyer's Agent: Don't worry about it. I won't bother to show it. Who's your local agent though? Because I'll make sure and tell people not to work with them.

WSJ RE Expert: It gives us insight into what the plaintiffs are arguing happens, which is that it's a very chummy, close-knit business, and that agents are steering their clients away from homes where they're not going to get paid as much. That, in turn, essentially penalizes sellers who might want to try a new option, an option that is a lower commission option.

 

[BassNBrew]

@Chadstroma

I was just reading an appraisal and MLS is referenced 16 times. If the MLS goes away as the go source for information, I wonder how much cushion lenders want for loans because appraisals won't be as accurate?

 

[Chadstroma]

@Chadstroma

I was just reading an appraisal and MLS is referenced 16 times. If the MLS goes away as the go source for information, I wonder how much cushion lenders want for loans because appraisals won't be as accurate?

I did not even consider that. It is a major data point source. My guess is that MLS will not go away but more along the lines of changes to how commissions are charged. From my understanding, the major crux of the whole legal argument against the system as is that it conspiracy among the brokerages to fix prices. I don't see MLS elimination being the solution to that but could it eventually end up going away because the profits of the transactions are no longer there to support it from the RE agent fees? I don't know. That is a very interesting point and something to consider.

I have listened to a few very smart people in RE, law and lending and when it comes down to it what is known now is that nothing is really known including whether these rulings will hold up or when they will go into affect and then how that will change things.

 

[Caveman33]

the whole RE industry always seemed like fat that could be cut out. For many years, 6% was standard. My father was a home builder and I grew up working on one of his developments. The homes sold themselves. Friends of owners would often stop and talk to my father on the job site. None of the homes were built on spec. Meanwhile, my father's brother had a real estate license. He had worked for my father as a carpenter at different times over the years. My father loved to tell stories about how bad his brother was. Like the time he gave him some money to get water from the store and his brother came back with beer, said it was cheaper. Maybe I understood that I was more like his brother than my father so I always said that if it was my brother and I did not trust him to handle the real estate paperwork, I would just do it myself and allow the brother/sister with the license to get the money. I eventually paid $450 for an online real estate course and then passed the licensing test but I think you rely too much on family connections in the beginning and I had none to work with. I had been planning to use the license on my own projects but that didn't pan out.

 

[Chadstroma]

Real estate industry trembles over commissions on home sales​

Story by Julian Mark

Florida Realtor Alexandré Worthington is already bracing for a shift that threatens a tear down a compensation system that has ruled his industry for more than a century.

“It’s the perfect time to pick up the pieces,” Worthington said. “It’s a perfect time to reflect on the changes that could be coming and how to prepare for them.”

In a federal civil case, a Kansas City jury last month found the National Association of Realtors (NAR) and major brokerages conspired to keep commissions artificially high. The result has left the real estate industry holding its collective breath, as experts say it is on the cusp of a radical reorganization that could affect everything about the business.

“There’s a lot of speculation out there around how this will play out,” said Ryan Tomasello, who covers the real estate technology sector for Keefe, Bruyette & Woods. Although much remains uncertain, “we have a high degree of confidence that, at the conclusion of this storyline, significant changes will be made to the commission structure in the U.S.”

The most immediate and striking blow could come as a result of the federal case in Kansas City, Mo. The judge overseeing the case has the power to issue an injunction that could break up the century-old “bundled” or “cooperative” commissions system, in which sellers’ and buyers’ agents split a commission that typically ranges between 5 and 6 percent of the home sale price. The timing of such an action remains unclear.

A settlement in which NAR agrees to change the system is also possible, according to Michael Ketchmark, the lead plaintiff attorney. “We’re in the process of having conversations with the [Justice Department] and NAR, and we remain hopeful that we’re going have a resolution that brings relief to millions across the county,” he told The Washington Post.

In 2019, a group of home sellers sued NAR and brokerages Keller Williams and HomeServices of America in the Kansas City federal court, accusing the organizations of conspiring to keep commissions artificially high by requiring sellers to make the cooperative commission offer before listing homes on a widely used property database — the Multiple Listings Service — that allows for-sale properties to receive notice. The plaintiffs alleged that the system stifled competition and inflated commissions for buyers’ agents.

NAR, Keller Williams and HomeServices of America have denied those allegations and vowed to appeal the Oct. 31 verdict that awarded $1.8 billion to a half-million Missouri home sellers, an amount that could swell to $5 billion. Those organizations say the existing commissions structure is transparent, and they denied that the payment structure was anticompetitive. NAR said after the verdict that the “matter is not close to being final.”

Mantill Williams, an NAR spokesman, said the association is open to a resolution that “maintains a way for buyers and sellers to continue to benefit from the cooperation of real estate professionals and eliminates our members’ risk of liability for the claims alleged.”

“That being said,” he added, “we remain confident we will prevail on our appeal.”

But the verdict has already sent convulsions through financial markets and the real estate industry.


Shares of Zillow plunged nearly 7 percent after the jury rendered its verdict, as investors saw potential changes as a threat to the company’s revenue model — a large portion of which comes from advertising for buyers agents, according to analysts. During an earnings call a day after the jury verdict, Zillow chief executive Richard N. Barton sought to reassure Wall Street analysts that buyers agents would not go extinct and that the company’s revenue model was safe.

He added that possible developments to the commissions system “look like good initial steps at more transparency and education for consumers,” though added that he believed any change would come slowly.

Changes to the commissions structure could eventually result in a 30 percent reduction in the $100 billion total that U.S. consumers pay in real estate commissions, according to a report by Tomasello and his team. Analysts and real estate experts said prices for buyers’ agents would adjust more accurately to the value of their services. If buyers’ agents are no longer guaranteed 3 percent of the commission, their fees might fall because they would have to compete on the price of their services, experts said.


Worthington, the Florida Realtor, said buyers’ agents could shift to an “a la carte” service model, in which potential home buyers choose their level of service and pay accordingly. A 1 percent commission, for example, could buy a customer automated emails with new homes for sale, based on the preferences of a prospective buyer, he said.

For a 3 percent commission, “I’m actually going to walk into my office every morning and scrub our system and every resource I have to find the house that you’re looking for,” he said.

Sophia Gilbukh, an assistant professor of real estate at Baruch College’s Zicklin School of Business in New York, said breaking up the buyers’ and sellers’ agent commissions could also result in lower listing prices for homes.

High fees borne by sellers result in higher listing prices, Gilbukh said, because sellers want to cover their costs. Higher prices increase mortgage payments for buyers, she said.

Breaking up the commission system, Gilbukh said, would result in lower prices overall but also lead to bigger upfront costs for buyers, who indirectly pay the costs of the commissions in the form of higher mortgage payments. Without the structure of the current cooperative system, buyers would need to directly pay their agents immediately after a sale.

“That might put a lot of buyers at a disadvantage, especially liquidity constrained buyers,” she said. “They might not be able to afford a higher-fee agent — even if it’s worth it for them — because they just don’t have the money to pay for it upfront.”

The cooperative compensation structure was established in 1913, when National Association of Real Estate Exchanges, the precursor to NAR, said its member agents should share commissions with agents that produced buyers, according to a 2015 study by economists Panle Jia Barwick and Maisy Wong. The commissions rate hit 5 percent in 1940 and has remained virtually unchanged ever since, according to the study.

Commissions work differently in countries such as the United Kingdom, where sellers pay typically less than 2 percent, and buyers pay their own agents, according to the study.

U.S. regulators have long scrutinized America’s commission system, Tomasello, the analyst, said. In 2020, the Justice Department sued NAR and proposed a settlement in which the association would have to change its rules to bring more transparency to its commission system. The settlement also sought to stop NAR from saying buyers’ agent services are free. But less than a year later, the Justice Department withdrew from the settlement to “permit a broader investigation of NAR’s rules and conduct to proceed without restriction.”

The Justice Department has also filed statements of interest in the Missouri case and a similar civil case in Illinois that clarify the parameters of a 2008 settlement between NAR and the Justice Department involving online listings. It did not respond to a request for comment on settlement negotiations in the Kansas City case.

Echoing the Missouri and Illinois cases, a new group of Missouri residents filed a proposed lawsuit Oct. 31, alleging that real estate agents are conspiring to keep commissions high, restraining price competition and harming consumers in violation of federal antitrust laws. The lawsuit seeks damages for home sellers nationwide.

Carole Higgins, a real estate agent in Suttons Bay, Mich., said changes are long overdue because agents have largely failed to appropriately explain contracts and commissions to consumers.

“We’ve grown so sloppy with the way that we are training our Realtors that this was the natural outcome,” Higgins said of the lawsuits. This “is a wake-up call.”

 

[Chadstroma]

Commission lawsuits pile up: NAR, Keller Williams named in new South Carolina case.
(HousingWire by Brooklee Han). Another day, another commission lawsuit - this time in South Carolina. A new commission lawsuit filed in South Carolina accuses NAR and Keller Williams of allegedly colluding to inflate agent commissions. On Monday, plaintiff Shauntell Burton filed a federal antitrust lawsuit in the U.S. District Court in South Carolina, alleging that the National Association of Realtors (NAR) and Keller Williams colluded to artificially inflate agent commission rates, increasing costs for home sellers.

Compared to other lawsuits filed in recent weeks and the Moehrl, Nosalek and Sitzer/Burnett suits, the Burton lawsuit is relatively small, as Keller Williams is the only corporate brokerage named in the suit and Burton is the only plaintiff.

Similar to the other commission lawsuits, the 107-page complaint identifies NAR's Clear Cooperation policy as the cornerstone of the alleged conspiracy. The policy requires agents to provide a blanket offer of compensation to the buyer's broker in order to list a property on the MLS. "The effect of these rules is not simply that the seller must pay the buyer broker's compensation," the complaint states. "These rules effectively take the compensation structure out of the view of the buyers and sellers, masking who pays the buyer broker's compensation. "Indeed, a buyer broker may not even present an offer to a seller that is conditional on the seller reducing the buyer broker commission."

Like other plaintiffs, Burton is seeking class-action status for all home sellers in South Carolina who have sold a home on a NAR-affiliated MLS with a Keller Williams agent since November 2019.

Burton sold her house with the help of a local Keller Williams agent in Spartanburg, South Carolina, in September 2023. According to the complaint, Burton paid the buyer's broker a 2.5% commission and the listing broker a 3.5% commission. The complaint demands a jury trial, a currently unknown amount of damages and for NAR to end its Clear Cooperation policy. "The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible," Mantill Williams, NAR's vice president of communications, wrote in an email. "Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. The National Association of REALTORS® is reviewing this new filing and will respond to it in court."

Keller Williams did not wish to comment on the new filing and attorneys for the plaintiff did not return a request for comment.

 

[ChiefD]

Commission lawsuits pile up: NAR, Keller Williams named in new South Carolina case.
(HousingWire by Brooklee Han). Another day, another commission lawsuit - this time in South Carolina. A new commission lawsuit filed in South Carolina accuses NAR and Keller Williams of allegedly colluding to inflate agent commissions. On Monday, plaintiff Shauntell Burton filed a federal antitrust lawsuit in the U.S. District Court in South Carolina, alleging that the National Association of Realtors (NAR) and Keller Williams colluded to artificially inflate agent commission rates, increasing costs for home sellers.

Compared to other lawsuits filed in recent weeks and the Moehrl, Nosalek and Sitzer/Burnett suits, the Burton lawsuit is relatively small, as Keller Williams is the only corporate brokerage named in the suit and Burton is the only plaintiff.

Similar to the other commission lawsuits, the 107-page complaint identifies NAR's Clear Cooperation policy as the cornerstone of the alleged conspiracy. The policy requires agents to provide a blanket offer of compensation to the buyer's broker in order to list a property on the MLS. "The effect of these rules is not simply that the seller must pay the buyer broker's compensation," the complaint states. "These rules effectively take the compensation structure out of the view of the buyers and sellers, masking who pays the buyer broker's compensation. "Indeed, a buyer broker may not even present an offer to a seller that is conditional on the seller reducing the buyer broker commission."

Like other plaintiffs, Burton is seeking class-action status for all home sellers in South Carolina who have sold a home on a NAR-affiliated MLS with a Keller Williams agent since November 2019.

Burton sold her house with the help of a local Keller Williams agent in Spartanburg, South Carolina, in September 2023. According to the complaint, Burton paid the buyer's broker a 2.5% commission and the listing broker a 3.5% commission. The complaint demands a jury trial, a currently unknown amount of damages and for NAR to end its Clear Cooperation policy. "The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible," Mantill Williams, NAR's vice president of communications, wrote in an email. "Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. The National Association of REALTORS® is reviewing this new filing and will respond to it in court."

Keller Williams did not wish to comment on the new filing and attorneys for the plaintiff did not return a request for comment.

So, didn't Burton actually sign a contract with her agent that spelled out those fees?

Suing after the fact seems like some BS. This whole lawsuit makes absolutely no sense to me.

 

[Chadstroma]

Commission lawsuits pile up: NAR, Keller Williams named in new South Carolina case.
(HousingWire by Brooklee Han). Another day, another commission lawsuit - this time in South Carolina. A new commission lawsuit filed in South Carolina accuses NAR and Keller Williams of allegedly colluding to inflate agent commissions. On Monday, plaintiff Shauntell Burton filed a federal antitrust lawsuit in the U.S. District Court in South Carolina, alleging that the National Association of Realtors (NAR) and Keller Williams colluded to artificially inflate agent commission rates, increasing costs for home sellers.

Compared to other lawsuits filed in recent weeks and the Moehrl, Nosalek and Sitzer/Burnett suits, the Burton lawsuit is relatively small, as Keller Williams is the only corporate brokerage named in the suit and Burton is the only plaintiff.

Similar to the other commission lawsuits, the 107-page complaint identifies NAR's Clear Cooperation policy as the cornerstone of the alleged conspiracy. The policy requires agents to provide a blanket offer of compensation to the buyer's broker in order to list a property on the MLS. "The effect of these rules is not simply that the seller must pay the buyer broker's compensation," the complaint states. "These rules effectively take the compensation structure out of the view of the buyers and sellers, masking who pays the buyer broker's compensation. "Indeed, a buyer broker may not even present an offer to a seller that is conditional on the seller reducing the buyer broker commission."

Like other plaintiffs, Burton is seeking class-action status for all home sellers in South Carolina who have sold a home on a NAR-affiliated MLS with a Keller Williams agent since November 2019.

Burton sold her house with the help of a local Keller Williams agent in Spartanburg, South Carolina, in September 2023. According to the complaint, Burton paid the buyer's broker a 2.5% commission and the listing broker a 3.5% commission. The complaint demands a jury trial, a currently unknown amount of damages and for NAR to end its Clear Cooperation policy. "The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible," Mantill Williams, NAR's vice president of communications, wrote in an email. "Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. The National Association of REALTORS® is reviewing this new filing and will respond to it in court."

Keller Williams did not wish to comment on the new filing and attorneys for the plaintiff did not return a request for comment.

So, didn't Burton actually sign a contract with her agent that spelled out those fees?

Suing after the fact seems like some BS. This whole lawsuit makes absolutely no sense to me.

That is our legal system.

Lawyers smell blood in the water. Lawyers love nothing more than a large class action lawsuit. Sure, the class may get a couple of dollars but the lawyers get millions and millions.

 

[Stoneworker]

Commission lawsuits pile up: NAR, Keller Williams named in new South Carolina case.
(HousingWire by Brooklee Han). Another day, another commission lawsuit - this time in South Carolina. A new commission lawsuit filed in South Carolina accuses NAR and Keller Williams of allegedly colluding to inflate agent commissions. On Monday, plaintiff Shauntell Burton filed a federal antitrust lawsuit in the U.S. District Court in South Carolina, alleging that the National Association of Realtors (NAR) and Keller Williams colluded to artificially inflate agent commission rates, increasing costs for home sellers.

Compared to other lawsuits filed in recent weeks and the Moehrl, Nosalek and Sitzer/Burnett suits, the Burton lawsuit is relatively small, as Keller Williams is the only corporate brokerage named in the suit and Burton is the only plaintiff.

Similar to the other commission lawsuits, the 107-page complaint identifies NAR's Clear Cooperation policy as the cornerstone of the alleged conspiracy. The policy requires agents to provide a blanket offer of compensation to the buyer's broker in order to list a property on the MLS. "The effect of these rules is not simply that the seller must pay the buyer broker's compensation," the complaint states. "These rules effectively take the compensation structure out of the view of the buyers and sellers, masking who pays the buyer broker's compensation. "Indeed, a buyer broker may not even present an offer to a seller that is conditional on the seller reducing the buyer broker commission."

Like other plaintiffs, Burton is seeking class-action status for all home sellers in South Carolina who have sold a home on a NAR-affiliated MLS with a Keller Williams agent since November 2019.

Burton sold her house with the help of a local Keller Williams agent in Spartanburg, South Carolina, in September 2023. According to the complaint, Burton paid the buyer's broker a 2.5% commission and the listing broker a 3.5% commission. The complaint demands a jury trial, a currently unknown amount of damages and for NAR to end its Clear Cooperation policy. "The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible," Mantill Williams, NAR's vice president of communications, wrote in an email. "Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. The National Association of REALTORS® is reviewing this new filing and will respond to it in court."

Keller Williams did not wish to comment on the new filing and attorneys for the plaintiff did not return a request for comment.

So, didn't Burton actually sign a contract with her agent that spelled out those fees?

Suing after the fact seems like some BS. This whole lawsuit makes absolutely no sense to me.

Was the fee conspiracy by the realtors disclosed in the contract prior to signing?

Contracts that have been rendered impossible to fulfill are “void,” as are contracts involving illegal activity.

Under What Circumstances is a Contract Voidable? | Binnall Law Group

Voidable contracts may be terminated without liability for breach. Learn more about the circumstances giving rise to voidable contracts.

www.binnall.com

 

[Chadstroma]

“I don’t think there’s any evidence to suggest that there will be pressure on commissions,” Compass CEO Robert Refkin said in an earnings call one week after a jury sided with plaintiffs in the Sitzer/Burnett case.

 

[Zow]

Commission lawsuits pile up: NAR, Keller Williams named in new South Carolina case.
(HousingWire by Brooklee Han). Another day, another commission lawsuit - this time in South Carolina. A new commission lawsuit filed in South Carolina accuses NAR and Keller Williams of allegedly colluding to inflate agent commissions. On Monday, plaintiff Shauntell Burton filed a federal antitrust lawsuit in the U.S. District Court in South Carolina, alleging that the National Association of Realtors (NAR) and Keller Williams colluded to artificially inflate agent commission rates, increasing costs for home sellers.

Compared to other lawsuits filed in recent weeks and the Moehrl, Nosalek and Sitzer/Burnett suits, the Burton lawsuit is relatively small, as Keller Williams is the only corporate brokerage named in the suit and Burton is the only plaintiff.

Similar to the other commission lawsuits, the 107-page complaint identifies NAR's Clear Cooperation policy as the cornerstone of the alleged conspiracy. The policy requires agents to provide a blanket offer of compensation to the buyer's broker in order to list a property on the MLS. "The effect of these rules is not simply that the seller must pay the buyer broker's compensation," the complaint states. "These rules effectively take the compensation structure out of the view of the buyers and sellers, masking who pays the buyer broker's compensation. "Indeed, a buyer broker may not even present an offer to a seller that is conditional on the seller reducing the buyer broker commission."

Like other plaintiffs, Burton is seeking class-action status for all home sellers in South Carolina who have sold a home on a NAR-affiliated MLS with a Keller Williams agent since November 2019.

Burton sold her house with the help of a local Keller Williams agent in Spartanburg, South Carolina, in September 2023. According to the complaint, Burton paid the buyer's broker a 2.5% commission and the listing broker a 3.5% commission. The complaint demands a jury trial, a currently unknown amount of damages and for NAR to end its Clear Cooperation policy. "The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible," Mantill Williams, NAR's vice president of communications, wrote in an email. "Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. The National Association of REALTORS® is reviewing this new filing and will respond to it in court."

Keller Williams did not wish to comment on the new filing and attorneys for the plaintiff did not return a request for comment.

So, didn't Burton actually sign a contract with her agent that spelled out those fees?

Suing after the fact seems like some BS. This whole lawsuit makes absolutely no sense to me.

That is our legal system.

Lawyers smell blood in the water. Lawyers love nothing more than a large class action lawsuit. Sure, the class may get a couple of dollars but the lawyers get millions and millions.

Yes, we all have nightly wet dreams about massive, time-consuming and complicated class action lawsuits that may take 100s of hours of collective work with no guarantee of payment.