Posted on 10/31/2023 1:46:34 PM PDT by NohSpinZone
A U.S. jury on Tuesday said the National Association of Realtors and several real estate companies, including units of Warren Buffett's Berkshire Hathaway (BRKa.N), must pay $1.78 billion in damages for conspiring to artificially inflate commissions that home sellers pay to buyers' brokers.
The verdict followed a two-week trial in the Kansas City, Missouri, federal court, where the case had drawn widespread attention for challenging widely used real estate industry practices.
The jury award will be automatically tripled under U.S. antitrust law to more than $5.3 billion, said Michael Ketchmark, the lead lawyer for the plaintiffs.
"Today was a day of accountability," Ketchmark said.
The defendants included Berkshire-owned HomeServices of America and two subsidiaries, as well as Keller Williams.
Plaintiffs in the class action included sellers of more than 260,000 homes in Missouri, Kansas and Illinois between 2015 and 2022.
(Excerpt) Read more at reuters.com ...
The judge can award treble damages and likely should.
FSBO is always an option if you want to opt out. I have done it both ways, and both have their advantages.
We can’t have starving lawyers...
Next to price fixing in healthcare.
upwards of 6% ?
What does that mean? 6% has been standard as long as I remember, but you can get 5%. When I probated and sold my brothers buildings and house, the State mandates 5% commission.
I worked with a smart agent, who was also a broker, that only took 2.5%. Buying agents hated working with him because they were getting less than half they would get from other listing agents. Buying agents would often try to get their clients to steer away from his listings even if the homes met the buyer’s needs. Complete BS.
Since most buyers are represented by a broker you need access to MLS as a seller to Market your property fsbo. There are cheap ways of getting on there but I’m not sure their Nationwide. Regardless this will probably Ripple into the commercial Arena as well
I’ve been on both sides of the fence ... a good realtor earns his money.
Why a buyer needs a realtor is a bit of mystery to me ...
but if he wants one he should pay him/her.
As far as I can tell, it's because they had special access to MLS listing data. But with Zillow and Redfin, all that is pretty much moot.
99% of the victims do not even know they have been victimized.
Most of the $1.8 billion - if it survives appeal - is going straight to the Plaintiff lawyers and to a small group of their class action Lead Plaintiffs.
The finance, insurance and real estate industries are built on a foundation of consumer fraud.
“Financial advisors” and “mutual fund managers” are the worst of the worst:
https://www.bogleheads.org/wiki/How_much_do_you_lose_to_annual_fees_after_many_years%3F
Not moot at all as zillow, realtor.com, Redfin Etc all need to contract with mls in order to get access. Not every municipality gives them access
that 6% was the “standard” was EXACTLY the issue! That is collusion.
Everything is negotiable.
If this verdict doesn’t get overturned then there is no American justice.
Sellers are not forced to pay buyer agents. That provision in listing agreements is negotiable. If a seller doesn’t want to advertise that he will pay prospective buyers’ agents then he doesn’t have to. That makes the buyer’s cash outlay at closing much higher compared to sellers who advertise that they will pay buyers’ agents. Conversely, when sellers pay buyer agents any increase in sale price generally gets rolled into mortgages.
So paying buyer agents is a big incentive to prospective buyers and their agents. What it is not, is forced. Sellers are not forced to pay buyer agents.
That’s the point of the lawsuit ie, “standard” commissions.
To tell a client 6% is the “standard” commission is a violation of anti-trust law. Realtors are (typically) taught to never say a commission is the standard, or usual. They are taught to say “6% is what my firm charges and I cant speak for other firms” and to leave it at that.
(Yes, I know what I am talking about).
That 6% sales commission is nothing but high priced inflation.
The point of the lawsuit was to prove collusion among Realtors. Collusion is illegal, as it should be.
Whether there was any collusion, I cannot say, but the jury thought so.
Can anyone provide a link to a website that INTELLIGENTLY analyzes the issues presented and resolved in, and the likely effect of, this decision?
Do like my lawyer buddy did: called several realtors and told them he wasn’t listing his house with any of them, but wanted an immediate sale for a price of $X. The first one to get him an offer that yielded him that amount could have everything more than X as a commission. House sold in 8 days.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.