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 ...
There are about two million real estate agents and about six million homes sold annually.
Here in Florida much of what is on the market is in poor shape and normally hard to sell.
There are agents that sell a lot of houses and feel entitled to a high commission.
There are agents that sell only a few houses annually and need a high commission.
“Hot” markets are fairly rare and markets are never as “hot” as the real estate industry would have you believe.
The problem for sellers is that once an offer is on the table that 6% incentive is no longer working for the seller.
If a house is listed at $350,000 and an offer for $325,000 is given, all the extra work to get a $350,000 offer would only yield $1500 on top of the $19,500 to be had by having the seller accept the offer.
A better way might be a 20% commission on the amount above say the tax valuation.
Percentage commissions might be replaced by fees for services.
Basic listing fee: $300+$20/room
Advertising: cost + 30%
Floor plans: cost + 30%
Photography: cost + 30%
Weekly marketing review: $50
Showing: $50 + $1/mile
Open house: $50/hour, $200 minimum
Contract prep: $200 + $50/page
Contract submission: $200
Contract review: $200
Pre-settlement house openings (for termite inspector, etc.): $100 each
My last two purchases in 30 years has been FSBO. Not sure what real estate people do to earn 6%. I always said I could buy a 150K car and pay no agent or origination fee, title insurance, PMI …. and be off the lot in 2-3 hours. Take 6 weeks and 10% in fees to get 150K house.
It looks like a huge drop, but the origin of the Y-Axis is about 34. So we are looking at ~10% drop. Not the floor being removed.
That is a net listing and is illegal in most states
So what? Where else can someone make $40,000+ just for doing some paperwork? So what if the home sits there for 2 or 3 months?
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