Posted on 11/01/2023 8:44:23 AM PDT by Altura Ct.
The influential National Association of Realtors and several brokerages were ordered to pay damages to home sellers who said they were forced to pay excessive fees to real estate agents.
A federal jury ruled on Tuesday that the powerful National Association of Realtors and several large brokerages had conspired to artificially inflate the commissions paid to real estate agents, a decision that could radically alter the home-buying process in the United States.
The realtors’ group and brokerages were ordered to pay damages of nearly $1.8 billion. The verdict allows the court to issue treble damages, which means they could swell to more than $5 billion.
It’s a decision that has the potential to rewrite the entire structure of the real estate industry in the United States, lowering the cost of moving homes by reducing commissions. Under a N.A.R. rule, a home seller is required to pay commissions to the agent representing the buyer, which sellers claimed forced them to pay excessive fees to the agents. The home sellers said the brokerages collaborated with N.A.R. to enforce what is called the “cooperative compensation rule.”
But under the verdict, the sellers would no longer be required to pay their buyers’ agents, and agents would be free to set their own commission rates, which could be slashed in half or less. For example, a home seller with a $1 million home can now pay as much as $60,000 in agent commissions — $30,000 to their agent and $30,000 to the buyers’ agent.
(Excerpt) Read more at nytimes.com ...
This is a big deal, given the fact that locally most homes are sold by the morning they hit the market.
Might be a nice pay day for anyone who sold their house.
Of course, realtors will be out of business
This will just mean most buyers will have to take out a bigger loan, and with rising interest rates, that will push more buyers out of the market.
But then again, prices need to drop significantly, so that is probably a good thing.
Anybody know how far this goes back?
“But then again, prices need to drop significantly”
*************
How can that happen when all the construction costs and land prices are rising?
6% ?
Pikers. The Big Guy gets 10%.
It follows the same format for any institution being destroyed naturally, but certainly on-purpose/politically: first the "sex-scandal," then comes the financial storm.
Where they gonna get the $18 billion? That’s with a B.
> Might be a nice pay day for anyone who sold their house. <
It would be interesting to know what cut the lawyers will take first.
“Anybody know how far this goes back?”
I don’t know all but this says four years from March 2019. I sold my house four months before this cutoff!
https://www.cohenmilstein.com/case-study/moehrl-v-national-association-realtors-et-alv
That is $1.8 billion.
How so?
The secret to making a lot of money as a real estate agent isn’t selling homes, it’s listing homes.
When you’re the listing agent, you get paid when the home sells, even if all you did was to put the home in the MLS.
Being a buyer’s agent you have to comb through the MLS listings, make appointments to view the properties, and sometimes even transport your clients to the home, all a lot of work.
But if you end up getting your buyers to put in an offer on a house, the listing agent gets half the commission for 15 minutes of work.
We listed our house almost ten years ago now. It was not a good market but there should have been more then three showings in six months.
Finally contacted the head of the agency and told him we were not happy. Turned out this agent had been recording more showing on all her houses then actually happened among a whole bunch of other shenanigans.
He took charge personally and our house was sold in under a week for over asking.
He earned his commission, the other Realtor, not so much.
The buyer will now have to pay their own agent’s commission, so essentially the price of every home just jumped 3% for them.
The same way prices always drop... lower demand.
The whole industry is rigged. Anything that breaks it up is good news,
listing agents do more than that but I get your point. When we sold out home, the listing agent arranged and paid for painting, some repairs, and staging of the home, created flyers, hosted several open houses, and had follow up meetings with interested parties. She still made good money but it was more than just listing the property on MLS.
A million years ago. I was trying to buy a house. I contacted a “buyer’s broker”. When explaining how things work.
They said “We fight for you! We will get you the best price!”
I asked. “You work on commission based on the sell price?”
Them: Yes!
Me: So, what is the incentive for you to sell for less, if you commission is more on the higher price?
Them: *Stunned* “we work for you to get you the lowest price.”
Me: less sell is less in your pocket. Why would you do that?
I still have yet to understand this conflict.
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.