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

[Chadstroma]

Another component of the industry is that many agents are paying huge fees to Zillow and other sites for leads because they have monopolized the search engines. You pay for leads hoping that enough work out to cover the expense. Many of these companies have the math worked out to where you spend $2-$4 to make $5. While Realtors are seen as the middle people ranking in huge commissions, the Zillows of the world are actually getting a huge cut of those fees. Kind of ironic that Realtors finance the mls system and then companies use that information to generate leads to sell back to the Realtors.

I like Zillow. I'm not in the industry, but it's interesting to see prior sell dates and prices. I don't know of any other site that has all that info at hand for no cost (to me). But I'd never consider going through them to purchase a home. I guess I'm a little surprised that anybody does that.

There are others out there but most are lead generation platforms though Zillow is trying to turn itself into a RE brokerage and mortgage lender and I am sure eventually all aspects of a transaction like title for example. They aren't alone in this, Rocket (formerly known as Quicken but they dragged the name through the mud so much the rebranded) is doing the same, though it is coming from the mortgage lender as a starting point. Both do the same thing... ask RE agents or lenders to work with them and then use the money and data that they get from those agents and lenders that work with them to grow their business to expand and take the business away from those who have been working with them using technology and marketing.

As for people working with them... most people just don't know. Zillow Home Loans? Rocket? Trash. Or even lesser knowns like Veterans United for VA loans. But there are much more with varying degrees of poo-dom. Why are they trash? Their business model is pretty much the same across the board. Spend heavily in tech and marketing, get the leads and data and know that more than 70% of home buyers don't shop their mortgage. Give a 'market rate' but then charge them a bunch of points and trash fees to milk them. Hire people with no experience or knowledge, get them licensed and a training program to tell them what to say and how to say it and get them next to a number of other drones in a call center. It doesn't matter if they don't know what they are doing or if they lie or if they mess things up- it is all a numbers game. Throw everything against the wall and see what sticks.

What we have seen though is that people are more willing to trust some call center lender like Rocket and Zillow and others with a refinance. I mean, you already have the home. If it goes all to poo, you can start over with another lender. But, if you are buying a home, people typically want a real life loan officer that actually knows what they are doing and is able to provide expert advice in consultation and not just be an order taker of getting a better rate like a refi. It is good news for people like me. My company has actually taken advantage of this and how very poor at interpersonal relationships these types of lenders are. We have a deal with a large national consumer finance company (I will not use the name here for trade purposes) that we are getting qualified buyers from them. We are then taking these qualified buyers and getting them moving- most don't have realtors that they are working with so we place them with realtor partners we work with. We have some qualifications to be a partner so as to weed out the part timers or just not very good realtors. We place them with the realtor, do the loan and move on. It is funny though because I have been reaching out to a number of realtors. The ones that I get to get on a webinar to see this program go from "suspicious" is prob the best word for it.... to excited. But so many realtors, it is like I am talking to a wall. I likely would be better off pitching them hundreds of crap leads for $5 a pop than actually qualified buyers that would be placed with them for free.... maybe because they are conditioned with how things have been done for the last decade, give or take, with these lead generation platforms.

Another thing we have done is that we have worked with Finlocker and Experian to provide a new financial app to our clients that goes from everything from credit to budget to saving and more to help guide FTHBers in preparing to buy a home. Along with that, they teamed HomeScout with it. HomeScout is kind of like Zillow but personalized to you. I have been using another service called Homebot which is similar to HomeScout but will be migrating all of my clients using that there. It gives monthly updates and instead of a single 'zestimate' it pulls 3 or 4 AVM's (Automated Value Matrix which is what Zillow's Zestimates are) and usually their Zestimate is one of them. It provides a ton more information as well. Anyone who wants to use this can. I pay for the service to allow for unlimited seats on it. You can use this link if you want it https://usafe.finlocker.com/pfm/registration/invite?key=b29d7f89-f596-42b1-9b51-9cf2fd2a4339 this gives the USafe (financial side) and then will invite you to the HomeScout side as well. Bank level security. No selling your info. On the USafe you can opt to give me a big picture overview of your info or not (this is for my clients that I am actively working to get them ready to buy so no need from you)

So.... all to say.... Zillow and others have been effective for a while. They are trying to grab more of the pie and more alternatives are sprouting up. People tend to be more comfortable with the faceless tech and/or call center for refi's but not so much with purchases. But are there people who do it? Absolutely.

 

[Chadstroma]

Another component of the industry is that many agents are paying huge fees to Zillow and other sites for leads because they have monopolized the search engines. You pay for leads hoping that enough work out to cover the expense. Many of these companies have the math worked out to where you spend $2-$4 to make $5. While Realtors are seen as the middle people ranking in huge commissions, the Zillows of the world are actually getting a huge cut of those fees. Kind of ironic that Realtors finance the mls system and then companies use that information to generate leads to sell back to the Realtors.

I like Zillow. I'm not in the industry, but it's interesting to see prior sell dates and prices. I don't know of any other site that has all that info at hand for no cost (to me). But I'd never consider going through them to purchase a home. I guess I'm a little surprised that anybody does that.

On the listings they have a button that says request a tour or contact agent. You're not really contacting the listing agent, you're being sent out as lead to an agent who pays them for leads. You click that button and provide your information, some agent is paying $50 to $500 (based on the market demand and sales price). If the ROI is great like 100%, that means Zillow is taking 50% of the buyer's commission.

We’ve built Zillow through strong real estate industry partnerships, and those partners are key to our shared success. Zillow is now a member of the National Association of REALTORS® and many other real estate groups and organizations that we are excited to partner with to meet our shared goals.

As members of the real estate community, we will continue to work together to accelerate innovation and expand opportunities for agents, brokers, builders, MLSs, other real estate professionals and, of course our customers, who are our North Star.

The above is from Zillow's website. So while many people think Zillow is a reason we don't need Realtors, Zillow is actively supporting the system. Note I'm not taking a stance on this, just sharing. Obviously Zillow would like to keep the status quo because eliminating the need for Realtors would damage their business.

Zillow is not so much actively supporting the system but they are really striving to BE the system. Them being part of NAR is not some geasture of goodwill in supporting realtors but them trying to BE the realtor.

I kept telling realtors that used Zillow for years and years.... you are giving them capital for them to invest in taking your business. I even literally got in a fight (online back and forth fight) with an executive in a realtor Facebook group several years back because he kept swearing up and down that they would NEVER step in to be the real estate agents. Just like they swore they would never be the mortgage lender.... until they did. No matter how much you tell some people, they can't see beyond their own nose. And to be honest, for a lot of realtors, paying for a couple hundred leads for a few hundred dollars would end up resulting in a deal or two and the investment paid off in their eyes. Short sighted in my view but understandable in a way for sure.

 

[CletiusMaximus]

This discussion has been really fantastic but I think at the same time might be a good illustration of the story these plaintiffs’ lawyers told at trial to get a jury to find a collusive scheme and award $1.8bln in damages. To say there is no transparency in this industry is a massive understatement. There is active deception. To put fault on the consumer for not doing his homework to protect himself is unfair given the web of deception that seemingly runs at you from start to finish when buying or selling a home using the established system. We’re told over and over a seller or buyer is foolish to go it alone, also told everything in the process is negotiable and you‘re an idiot if you get taken for a ride, but at the same time every single actor in the process is doing everything possible to take his cut without disclosing any of the details.

In my industry the word “agent” has a very specific meaning. An agent has a fiduciary duty to serve his client‘s interests above all. In real estate, it seems to me the “agent” typically has personal financial interests in the transaction that are directly contrary to his client’s interests. The idea a single “agent” can purport to represent both buyer and seller in a transaction is completely absurd in any professional setting other than residential real estate sale, where it is considered completely normal. But what most don’t realize is that even getting your own separate buyers agent doesn’t mean you have someone who is dedicated to helping you get the best home for you at the best price. In most cases it seems to me they are highly incentivized by the system to close the deal that most benefits the agent regardless of their client’s interests. Further, given prevailing market factors discussed here, their margins are squeezed so hard and put so much pressure on them it’s no surprise they cut corners at the consumer’s expense to get to closing. The fact that there are good agents out there among the crowd of bad ones doesn’t really help paint a better picture for me personally.

 

[CGRdrJoe]

A great win for the people.

Realtors don't even require college degrees....I have little respect for 99% of them.

you don’t respect people without college degree’s? How many jobs actually require college degrees, I’m guessing very few outside of Doctors and Lawyers.

 

[BassNBrew]

This discussion has been really fantastic but I think at the same time might be a good illustration of the story these plaintiffs’ lawyers told at trial to get a jury to find a collusive scheme and award $1.8bln in damages. To say there is no transparency in this industry is a massive understatement. There is active deception. To put fault on the consumer for not doing his homework to protect himself is unfair given the web of deception that seemingly runs at you from start to finish when buying or selling a home using the established system. We’re told over and over a seller or buyer is foolish to go it alone, also told everything in the process is negotiable and you‘re an idiot if you get taken for a ride, but at the same time every single actor in the process is doing everything possible to take his cut without disclosing any of the details.

In my industry the word “agent” has a very specific meaning. An agent has a fiduciary duty to serve his client‘s interests above all. In real estate, it seems to me the “agent” typically has personal financial interests in the transaction that are directly contrary to his client’s interests. The idea a single “agent” can purport to represent both buyer and seller in a transaction is completely absurd in any professional setting other than residential real estate sale, where it is considered completely normal. But what most don’t realize is that even getting your own separate buyers agent doesn’t mean you have someone who is dedicated to helping you get the best home for you at the best price. In most cases it seems to me they are highly incentivized by the system to close the deal that most benefits the agent regardless of their client’s interests. Further, given prevailing market factors discussed here, their margins are squeezed so hard and put so much pressure on them it’s no surprise they cut corners at the consumer’s expense to get to closing. The fact that there are good agents out there among the crowd of bad ones doesn’t really help paint a better picture for me personally.

This is the same in the real estate industry at least in my state. I think the same thing can be said for financial planners, travel agents, talent agents. Most agents make more based on volume, but doing right by your clients builds a sustainable base. Saving my client $20,000 only cuts my commission by $300 on average. $300 is a steal for a happy client who recommends me to someone else. Much better business plan than buy 100 leads from Zillow at $300 a pop = $30,000.

Grain of salt with all my posts as 80% of my volume is property management. Most of my business comes via word of mouth and marketing plans haven't worked out great because it's hard to locate/touch my clients. My marketing attempts usually net me vendors wanting to work for me. My company has some core values that I believe my agents do a good job of fulfilling. That's been our best route to growth.

 

[belljr]

For a $1 million home, the standard commission is $60,000 (6%).

this just is not a true statement.

There is no standard rate. Rates are always negotiable and if you don't think they are, you're not asking the right/enough questions

Most people don't know what to ask, or even that they CAN ask.
Every realtor I ever worked with or almost worked with has said something to the tune of "6% is the standard rate". One said they they may take a little less if the buyer did not have representation.
One of them charged me 2% when I found a buyer myself, and they just facilitated the transaction.
I have yet to ever meet a realtor that I felt wasn't just trying to make the most money possible not caring about me whatsoever, even one of them who is a "friend" of mine.

6% was always 3 and 3 no? 3 for each agent

When we bought this house we negotiated 4% since we the selling agent acted as our buying also

 

[Zegras11]

6% was always 3 and 3 no? 3 for each agent

When we bought this house we negotiated 4% since we the selling agent acted as our buying also

Actually no. I forget the exact time period, I'm thinking pre-1980's, the listing agent quite often did both sides for the 6%. There were not a whole lot of "Buyers agents" back then. That evolved as buyers had a huge need for representation without conflict of interest.

I'll do 4% on very, very good clients when selling and buying at the same time as I will get 3% on the buy. It's just good biz practice IMO. I'll do 5% on any prior client.

 

[Chadstroma]

A great win for the people.

Realtors don't even require college degrees....I have little respect for 99% of them.

you don’t respect people without college degree’s? How many jobs actually require college degrees, I’m guessing very few outside of Doctors and Lawyers.

I don't respect a lot of realtors because honestly there is so many of them that are absolute trash. They don't really work at the craft, they do a transaction here and there every other year when something falls into their lap, they don't try to learn and get better.... they just think it is easy money. It makes the jobs of everyone else in the transaction that much harder as we have to pick up the slack.

On the other hand, so much respect for the real professionals that take their role seriously, have worked at their craft and add real value to every transaction.

It has nothing to do with degrees.

College degrees have become not worth the cost they have. I was driven to finish my bachelors degree and did.... but I almost wish I hadn't bothered. Other than checking off the accomplishment in my life, it has not brought a single ounce of value to me since I got it. It was a practical business degree so it wasn't like I went off to learn underwater basket weaving. Through my life, I have found NO correlation between a person being worthwhile on a professional or personal level and if they have a degree or not.

 

[Chadstroma]

Real estate industry is in flux after shocking guilty verdict in commission lawsuit trial.
(HousingWire by Brooklee Han and Sarah Wheeler). The future of the real estate industry and how agents operate is in question after the guilty verdict in the Sitzer/Burnett case. After 11 days of testimony, the eight-person jury here took just a little over two hours to decide its verdict in the Sitzer/Burnett commission lawsuit trial. It found the National Association of Realtors, HomeServices of America and Keller Williams guilty of collusion to maintain high commission rates. Despite the guilty verdict, other than having to pay nearly $1.8 billion in damages, many questions still remain about what this means for the real estate industry, as the defendants still await Judge Stephen Bough's final judgment.

"It's yet to be determined what this means for Realtors at this point," Timothy Ray, the lead attorney for Keller Williams, told HousingWire in the Charles Evans Whittaker U.S. Courthouse in downtown Kansas City on Tuesday afternoon.

The president of RESPRO, Ken Trepeta, sees two potential outcomes in Bough's final ruling. One option is that NAR and the MLSs can no longer require cooperative compensation, but listing agents and their sellers can still offer the buyer broker compensation if they so choose. The second option, which Trepeta finds more alarming, is that Bough calls for a complete end to all cooperative compensation.

 

[ghostguy123]

I have yet to ever meet a realtor that I felt wasn't just trying to make the most money possible not caring about me whatsoever, even one of them who is a "friend" of mine.

All I have to say to this is you're not trying very hard then. I can get a top notch agent in any market in 15 minutes and have for a few posters here over the years.


It's not the agents fault you don't care enough to easily google and find the right questions to ask.

Tip - unless your friend is a very top agent, hiring a friend is by far the dumbest thing you can do in a RE transaction. They are often too afraid to ask you the tough questions that need to be asked because it might jeopardize your friendship in the future.

We have these posts just about every year. It's basically this simple. You want a good agent? Do an hour of homework and interview at least three agents and find the one the best fits your needs at the price that works for you.

All this , "I didn't know rates are negotiable" and all the other comments like "agents just put a sign in the yard" means YOU DID NOT DO YOUR BEST to hire the right agent. There are NOT many great agents because way too many of them do it part time and do make a bad name for the good ones.

The arrogance of so many of you in here that make agent comments like you know exactly everything an agent does in a transaction is mind boggling. It's a very hard ****ing job, with no guaranteed paycheck and most of the work happens after you go pending dealing with inspections , appraisers, more negotiations from those things. RARELY is a transaction very smooth and "easy money."

I firmly stand by what I said.
However, I'd like to know what qualifies a realtor as "top notch" in your book. Tons of sales?? How much are you getting a realtor in a market you know nothing about who actually has a clients best interest in mind?
So far I'm a firm 12/12 (give or take a couple) on realtors who seemingly only care about making the transaction as fast as possible.

 

[Chadstroma]

Another component of the industry is that many agents are paying huge fees to Zillow and other sites for leads because they have monopolized the search engines. You pay for leads hoping that enough work out to cover the expense. Many of these companies have the math worked out to where you spend $2-$4 to make $5. While Realtors are seen as the middle people ranking in huge commissions, the Zillows of the world are actually getting a huge cut of those fees. Kind of ironic that Realtors finance the mls system and then companies use that information to generate leads to sell back to the Realtors.

I like Zillow. I'm not in the industry, but it's interesting to see prior sell dates and prices. I don't know of any other site that has all that info at hand for no cost (to me). But I'd never consider going through them to purchase a home. I guess I'm a little surprised that anybody does that.

On the listings they have a button that says request a tour or contact agent. You're not really contacting the listing agent, you're being sent out as lead to an agent who pays them for leads. You click that button and provide your information, some agent is paying $50 to $500 (based on the market demand and sales price). If the ROI is great like 100%, that means Zillow is taking 50% of the buyer's commission.

We’ve built Zillow through strong real estate industry partnerships, and those partners are key to our shared success. Zillow is now a member of the National Association of REALTORS® and many other real estate groups and organizations that we are excited to partner with to meet our shared goals.

As members of the real estate community, we will continue to work together to accelerate innovation and expand opportunities for agents, brokers, builders, MLSs, other real estate professionals and, of course our customers, who are our North Star.

The above is from Zillow's website. So while many people think Zillow is a reason we don't need Realtors, Zillow is actively supporting the system. Note I'm not taking a stance on this, just sharing. Obviously Zillow would like to keep the status quo because eliminating the need for Realtors would damage their business.

Zillow is not so much actively supporting the system but they are really striving to BE the system. Them being part of NAR is not some geasture of goodwill in supporting realtors but them trying to BE the realtor.

I kept telling realtors that used Zillow for years and years.... you are giving them capital for them to invest in taking your business. I even literally got in a fight (online back and forth fight) with an executive in a realtor Facebook group several years back because he kept swearing up and down that they would NEVER step in to be the real estate agents. Just like they swore they would never be the mortgage lender.... until they did. No matter how much you tell some people, they can't see beyond their own nose. And to be honest, for a lot of realtors, paying for a couple hundred leads for a few hundred dollars would end up resulting in a deal or two and the investment paid off in their eyes. Short sighted in my view but understandable in a way for sure.

Expanding on this a little more....

Zillow announced a purchase of "Follow Up Boss" which is a CRM many RE agents use. Just another example of them trying to grab a piece of all the slices of the pie.

 

[Gally]

A great win for the people.

Realtors don't even require college degrees....I have little respect for 99% of them.

you don’t respect people without college degree’s? How many jobs actually require college degrees, I’m guessing very few outside of Doctors and Lawyers.

I was going to say something similar. There are many realtors that don't deserve respect but that has nothing to do with whether or not they have a college degree. That is essentially irrelevant to the respect aspect.

 

[Chadstroma]

I have yet to ever meet a realtor that I felt wasn't just trying to make the most money possible not caring about me whatsoever, even one of them who is a "friend" of mine.

All I have to say to this is you're not trying very hard then. I can get a top notch agent in any market in 15 minutes and have for a few posters here over the years.


It's not the agents fault you don't care enough to easily google and find the right questions to ask.

Tip - unless your friend is a very top agent, hiring a friend is by far the dumbest thing you can do in a RE transaction. They are often too afraid to ask you the tough questions that need to be asked because it might jeopardize your friendship in the future.

We have these posts just about every year. It's basically this simple. You want a good agent? Do an hour of homework and interview at least three agents and find the one the best fits your needs at the price that works for you.

All this , "I didn't know rates are negotiable" and all the other comments like "agents just put a sign in the yard" means YOU DID NOT DO YOUR BEST to hire the right agent. There are NOT many great agents because way too many of them do it part time and do make a bad name for the good ones.

The arrogance of so many of you in here that make agent comments like you know exactly everything an agent does in a transaction is mind boggling. It's a very hard ****ing job, with no guaranteed paycheck and most of the work happens after you go pending dealing with inspections , appraisers, more negotiations from those things. RARELY is a transaction very smooth and "easy money."

I firmly stand by what I said.
However, I'd like to know what qualifies a realtor as "top notch" in your book. Tons of sales?? How much are you getting a realtor in a market you know nothing about who actually has a clients best interest in mind?
So far I'm a firm 12/12 (give or take a couple) on realtors who seemingly only care about making the transaction as fast as possible.

I will agree the reality is that most realtors are driven to make money and that is really their only source of motivation. These realtors come in all shapes and sizes... some that do transactions when they fall into them and some that are top producers in their area. Some who haven't a clue and some that are total professionals at what they do. You can actually still get good value from the realtor who knows what they are doing, maybe only see you as a walking dollar sign but they are smart enough to know that a happy customer is what is going to pay them off more than a quick transaction.

There are absolutely realtors that care about their clients. These are the realtors that I want to work with because it is in line with my values and how I do business. Plus, the typical realtor that only cares about money is either a miserable person and/or completely fake. I seek to build good relationships with my realtor partners so my top concern isn't how many transactions they do a year but are they someone I want to work with.

My description of a top notch realtor would be the following: Someone who has invested in themselves and continues to do so to be the best professional that they can be, is driven to succeed and is focused on the long term- knowing that when they take care of their clients with their best interests at heart, that will in turn lead to more transactions from referrals.

 

[Gally]

We inherited a house recently. We wanted to sell it as is as we didn't want to put an money into it. The bones of the house were great and the location was really good (best school district in the area). We found 4 buyers immediately so didn't really want to bring in realtors and spend money we didn't want to. I have some realtor friends and asked them about just doing the paperwork for a flat fee and all of them said they needed the 6% to cover their costs. That seemed ridiculous to me so we ended up just doing it ourselves through the tile company. Paid them about $1200 (sale price was $430K). The buyer got a VA loan and we split the pest inspection cost and he paid for the minor repairs the VA required.

We closed in 45 days (we needed the time to get stuff out of the house) with no issues. Seemed straight forward for this case. I am still unclear why the realtors had to charge $25K (6% of sale price) to "cover their costs" on a sale as is when the buyer was already found. No open houses, no getting it ready to sell, no anything other than paperwork that the title company was doing anyway. What am I missing?

 

[Gally]

College degrees have become not worth the cost they have. I was driven to finish my bachelors degree and did.... but I almost wish I hadn't bothered. Other than checking off the accomplishment in my life, it has not brought a single ounce of value to me since I got it. It was a practical business degree so it wasn't like I went off to learn underwater basket weaving. Through my life, I have found NO correlation between a person being worthwhile on a professional or personal level and if they have a degree or not.

I think degrees have been so diluted because it was pushed so hard that you need a degree to do anything. Because of that it really isn't a delineator anymore. It's become similar to a high school diploma back in the old days.

In fact it has swung so far that kids out of high school are better off going to a trade school because there are so few good tradesman these days that if you are good you can write your own ticket. The demand has way outgrown the supply because nobody does anything on their own anymore.

But that's a discussion for a different thread.....

 

[SWC]

This discussion has been really fantastic but I think at the same time might be a good illustration of the story these plaintiffs’ lawyers told at trial to get a jury to find a collusive scheme and award $1.8bln in damages. To say there is no transparency in this industry is a massive understatement. There is active deception. To put fault on the consumer for not doing his homework to protect himself is unfair given the web of deception that seemingly runs at you from start to finish when buying or selling a home using the established system. We’re told over and over a seller or buyer is foolish to go it alone, also told everything in the process is negotiable and you‘re an idiot if you get taken for a ride, but at the same time every single actor in the process is doing everything possible to take his cut without disclosing any of the details.

In my industry the word “agent” has a very specific meaning. An agent has a fiduciary duty to serve his client‘s interests above all. In real estate, it seems to me the “agent” typically has personal financial interests in the transaction that are directly contrary to his client’s interests. The idea a single “agent” can purport to represent both buyer and seller in a transaction is completely absurd in any professional setting other than residential real estate sale, where it is considered completely normal. But what most don’t realize is that even getting your own separate buyers agent doesn’t mean you have someone who is dedicated to helping you get the best home for you at the best price. In most cases it seems to me they are highly incentivized by the system to close the deal that most benefits the agent regardless of their client’s interests. Further, given prevailing market factors discussed here, their margins are squeezed so hard and put so much pressure on them it’s no surprise they cut corners at the consumer’s expense to get to closing. The fact that there are good agents out there among the crowd of bad ones doesn’t really help paint a better picture for me personally.

and lets not forget that in wisconsin when a real estate agent commits a crime in the real estate transaction the broker they worked for cant be held liable by statute even if the broker firm never bothered to examined the agents qualifications or background because the real estate lobby went and bought and paid for that little gem in the statutes take that to the bank brohan

 

[acarey50]

We inherited a house recently. We wanted to sell it as is as we didn't want to put an money into it. The bones of the house were great and the location was really good (best school district in the area). We found 4 buyers immediately so didn't really want to bring in realtors and spend money we didn't want to. I have some realtor friends and asked them about just doing the paperwork for a flat fee and all of them said they needed the 6% to cover their costs. That seemed ridiculous to me so we ended up just doing it ourselves through the tile company. Paid them about $1200 (sale price was $430K). The buyer got a VA loan and we split the pest inspection cost and he paid for the minor repairs the VA required.

We closed in 45 days (we needed the time to get stuff out of the house) with no issues. Seemed straight forward for this case. I am still unclear why the realtors had to charge $25K (6% of sale price) to "cover their costs" on a sale as is when the buyer was already found. No open houses, no getting it ready to sell, no anything other than paperwork that the title company was doing anyway. What am I missing?

More than likely that was their passive way of letting you know that just doing the paperwork for whatever that flat fee was, was not worth their time.

In your scenario, doing what you did seems to make perfect sense for all parties involved.

 

[Gally]

More than likely that was their passive way of letting you know that just doing the paperwork for whatever that flat fee was, was not worth their time.

Except, there was no flat fee discussed. I just asked what they wanted in order for them to do the paperwork. They said 6%. It wasn't like I said, "would you do it for $500" and they countered at $25K. They just said they would need that much to do it.

 

[BlackCrowes]

CEO of NAR resigns

 

[Zegras11]

I'd like to know what qualifies a realtor as "top notch" in your book. Tons of sales?? How much are you getting a realtor in a market you know nothing about who actually has a clients best interest in mind?

Experience.

second question - I would talk to you about your needs, then call a few offices and talk to their designated broker and state what your need are, and then ask the DB for three names of people with experience in your needs. Just have to ask the right questions to get someone for your needs. Don't settle until you get one.

 

[Chadstroma]

We inherited a house recently. We wanted to sell it as is as we didn't want to put an money into it. The bones of the house were great and the location was really good (best school district in the area). We found 4 buyers immediately so didn't really want to bring in realtors and spend money we didn't want to. I have some realtor friends and asked them about just doing the paperwork for a flat fee and all of them said they needed the 6% to cover their costs. That seemed ridiculous to me so we ended up just doing it ourselves through the tile company. Paid them about $1200 (sale price was $430K). The buyer got a VA loan and we split the pest inspection cost and he paid for the minor repairs the VA required.

We closed in 45 days (we needed the time to get stuff out of the house) with no issues. Seemed straight forward for this case. I am still unclear why the realtors had to charge $25K (6% of sale price) to "cover their costs" on a sale as is when the buyer was already found. No open houses, no getting it ready to sell, no anything other than paperwork that the title company was doing anyway. What am I missing?

They don't need the 6% to cover their cost... many are told and conditioned to basically demand the 6% as the industry norm. If they are an agent and not a broker then they are splitting their commission with the broker many times.

One thing that I think happens a lot and may be a reason why realtors don't want to do this type of thing because it ends up not being 'file the paperwork' and questions and work is asked. They are then in a position to be the jerk who says "Sorry, you hired me to do the paperwork, not advise you or answer questions" or they are ending up doing more. In most people's eyes, "all I am doing is asking a question" but I am reminded of that story of the guy factory whose machine wasn't working. It shut everything down. No one could figure out the problem and fix it. They bring in a guy and he takes a couple of minutes, finds the problem, replaces like a bolt or something and then provides his bill which is like a $10K. The factory owner is outraged. "All you did was replace a bolt and it took you 5 minutes! How can you charge that much?!" so the mechanic guy takes it back and then makes some changes and hands it back. It now reads "$10 for the replacement of the bolt, $9,990 for knowing the bolt was the problem and how to fix it to get it running again."

Now is 6% worth a few extra questions... most likely not. But at the same time, you are not paying someone for their time per se, you are paying them for their knowledge.

I can't say that I think realtors should split 6% of every deal now. I think that is something that made sense 30 years ago for sure when they had to spend a lot more time and a lot more money in both the seller and buyer sides. But I also can't say that all they do is file paperwork or should get a flat fee.

Discount brokerages/agents have popped up to kind of fill the void. I had clients a few months ago finally found the house they wanted. They were moving from CO to IL. They went with one of these discount agents who charged much less than the normal 6% split. They were convinced their house would sell within days. It didn't. It was a whole fiasco. It dragged on for a couple of months and they bitched and moaned to me about it all. In the end, the entire deal fell apart and they were livid with this discount agent... and though I would never say it to them.... they were made that they got discount service from a discount agent. Everyone wants the discount but the top value. It does not tend to work that way very often.

 

[Chadstroma]

This discussion has been really fantastic but I think at the same time might be a good illustration of the story these plaintiffs’ lawyers told at trial to get a jury to find a collusive scheme and award $1.8bln in damages. To say there is no transparency in this industry is a massive understatement. There is active deception. To put fault on the consumer for not doing his homework to protect himself is unfair given the web of deception that seemingly runs at you from start to finish when buying or selling a home using the established system. We’re told over and over a seller or buyer is foolish to go it alone, also told everything in the process is negotiable and you‘re an idiot if you get taken for a ride, but at the same time every single actor in the process is doing everything possible to take his cut without disclosing any of the details.

In my industry the word “agent” has a very specific meaning. An agent has a fiduciary duty to serve his client‘s interests above all. In real estate, it seems to me the “agent” typically has personal financial interests in the transaction that are directly contrary to his client’s interests. The idea a single “agent” can purport to represent both buyer and seller in a transaction is completely absurd in any professional setting other than residential real estate sale, where it is considered completely normal. But what most don’t realize is that even getting your own separate buyers agent doesn’t mean you have someone who is dedicated to helping you get the best home for you at the best price. In most cases it seems to me they are highly incentivized by the system to close the deal that most benefits the agent regardless of their client’s interests. Further, given prevailing market factors discussed here, their margins are squeezed so hard and put so much pressure on them it’s no surprise they cut corners at the consumer’s expense to get to closing. The fact that there are good agents out there among the crowd of bad ones doesn’t really help paint a better picture for me personally.

and lets not forget that in wisconsin when a real estate agent commits a crime in the real estate transaction the broker they worked for cant be held liable by statute even if the broker firm never bothered to examined the agents qualifications or background because the real estate lobby went and bought and paid for that little gem in the statutes take that to the bank brohan

NAR is an extremely poweful lobby

 

[Zegras11]

My description of a top notch realtor would be the following: Someone who has invested in themselves and continues to do so to be the best professional that they can be, is driven to succeed and is focused on the long term- knowing that when they take care of their clients with their best interests at heart, that will in turn lead to more transactions from referrals.

this is it right here. And it's also me. And I understand there's not many of us. I hate working with crappy agents, You wind up doing their work also.

 

[Chadstroma]

CEO of NAR resigns

Bob Goldberg out as NAR CEO

Bob Goldberg is out as NAR CEO in the wake of the trade group's loss in the Sitzer/Burnett commission lawsuit trial.

finance.yahoo.com

Seems like this whole thing blowing up isn't the only reason but I am sure it didn't help.

 

[ChiefD]

My description of a top notch realtor would be the following: Someone who has invested in themselves and continues to do so to be the best professional that they can be, is driven to succeed and is focused on the long term- knowing that when they take care of their clients with their best interests at heart, that will in turn lead to more transactions from referrals.

this is it right here. And it's also me. And I understand there's not many of us. I hate working with crappy agents, You wind up doing their work also.

We are probably going to be relocating in the spring, so the agent we have chosen is fantastic. I worked with her years ago in a marketing company and she is one of the best in KC right now. I have no problem paying her the fee we talked about because I know she's worth it.

Her stuff sells - and her marketing plan is top-notch. I've seen her operate for the last 7 years from afar as that's when she got into it. Just this week she sent over her photographer to grab outdoor pics while everything is still green since we will probably list around the first of March or so if we decide to do this. This was on her dime (with the expectation she will have a commission later on) since we haven't signed any listing agreement yet.

She just wants pics so she can show buyers what the house looks like in full color since everything will be brown and dead in March here.

I've seen her sales numbers and her work is worth it. And I could probably ask the other 12 people I know who are realtors to give me a proposal and beat them down on rates but it's not worth it to me. I don't have time to screw with this and especially won't in the spring when I am trying to move to a different state and pack up my house and try and find a job up there and all the other stress than comes with this.

She has responsibility for my property and I know she will maximize what I can get for it. And I know she gives a damn about her fiduciary responsibility to me.

 

[eoMMan]

A realtor’s commission shouldn’t be a flat % of a home’s selling price, rather, it should reflect the time and effort they invest in the sale. And they shouldn’t be incentivized to sell the most expensive homes. I think billing based on hours, like lawyers, makes more sense.

I’ve always thought it was odd that a realtor could make the same amount of commission money after showing one single house to a buyer (in which they go on to buy) versus another buyer who was shown 25 different houses and then finally found one to buy (assuming they do indeed buy).

 

[Zegras11]

We are probably going to be relocating in the spring, so the agent we have chosen is fantastic. I worked with her years ago in a marketing company and she is one of the best in KC right now. I have no problem paying here the fee we talked about because I know she's worth it.

Her stuff sells - and her marketing plan is top-notch. I've seen her operate for the last 7 years from afar as that's when she got into it. Just this week she sent over her photographer to grab outdoor pics while everything is still green since we will probably list around the first of March or so if we decide to do this. This was on her dime (with the expectation she will have a commission later on) since we haven't signed any listing agreement yet.

She just wants pics so she can show buyers what the house looks like in full color since everything will be brown and dead in March here.

I've seen her sales numbers and her work is worth it. And I could probably ask the other 12 people I know who are realtors to give me a proposal and beat them down on rates but it's not worth it to me. I don't have time to screw with this and especially won't in the spring when I am trying to move to a different state and pack up my house and try and find a job up there and all the other stress than comes with this.

She has responsibility for my property and I know she will maximize what I can get for it. And I know she gives a damn about her fiduciary responsibility to me.

this is exactly what you want to find and they are out there, you just have to search until you find them.

With my recent divorce (3 months ago today), I was very busy and tied up and not available from 8am to 6pm each weekday.

I hired the best agent I know of to sell my home. She did an incredible job of marketing it and all the follow up so far while it's pending, always with my best interest in mind.

 

[Gally]

A realtor’s commission shouldn’t be a flat % of a home’s selling price, rather, it should reflect the time and effort they invest in the sale. And they shouldn’t be incentivized to sell the most expensive homes. I think billing based on hours, like lawyers, makes more sense.

I’ve always thought it was odd that a realtor could make the same amount of commission money after showing one single house to a buyer (in which they go on to buy) versus another buyer who was shown 25 different houses and then finally found one to buy (assuming they do indeed buy).

Theoretically if the agent asks the right questions to really know what someone wants and is familiar enough with the market they best ones would be able to show minimal houses to the buyer because they will be giving them what they want.

The agents that have no idea what a buyer wants is trying to guess and may be wasting the buyers time by showing them 25 houses that don't fit into what they want.

 

[Zegras11]

I’ve always thought it was odd that a realtor could make the same amount of commission money after showing one single house to a buyer (in which they go on to buy) versus another buyer who was shown 25 different houses and then finally found one to buy (assuming they do indeed buy).

The way I was taught, I rarely have to show more than five homes. All my buyers thanks me for not dragging it out to 20-25 homes. If an agent is always showing 20-25 homes, they don't know how to do their job well.
ETA: I teach a class on how to do this

 

[massraider]

CEO of NAR resigns

Bob Goldberg Out As NAR CEO

NAR CEO Bob Goldberg is being replaced by Nykia Wright as the interim CEO while the industry searches for a new leader.

therealdeal.com

Seems like these guys aren't out of the woods

 

[FatMax]

Discount brokerages/agents have popped up to kind of fill the void. I had clients a few months ago finally found the house they wanted. They were moving from CO to IL. They went with one of these discount agents who charged much less than the normal 6% split. They were convinced their house would sell within days. It didn't. It was a whole fiasco. It dragged on for a couple of months and they bitched and moaned to me about it all. In the end, the entire deal fell apart and they were livid with this discount agent... and though I would never say it to them.... they were made that they got discount service from a discount agent. Everyone wants the discount but the top value. It does not tend to work that way very often.

Reminds me of what my boss used to tell me. "We offer low cost, great service, and fast service. Pick which two of the three you want."

 

[Chadstroma]

A realtor’s commission shouldn’t be a flat % of a home’s selling price, rather, it should reflect the time and effort they invest in the sale. And they shouldn’t be incentivized to sell the most expensive homes. I think billing based on hours, like lawyers, makes more sense.

I’ve always thought it was odd that a realtor could make the same amount of commission money after showing one single house to a buyer (in which they go on to buy) versus another buyer who was shown 25 different houses and then finally found one to buy (assuming they do indeed buy).

Don't forget the clients that you spend alot of time and money on showing houses or listing a house and then you never close a deal. There is a lot of work done by both realtors and lenders that we never get paid on... title too. Not like appraisers, inspectors and lawyers. They get paid no matter what once they do their work.

 

[Chadstroma]

Discount brokerages/agents have popped up to kind of fill the void. I had clients a few months ago finally found the house they wanted. They were moving from CO to IL. They went with one of these discount agents who charged much less than the normal 6% split. They were convinced their house would sell within days. It didn't. It was a whole fiasco. It dragged on for a couple of months and they bitched and moaned to me about it all. In the end, the entire deal fell apart and they were livid with this discount agent... and though I would never say it to them.... they were made that they got discount service from a discount agent. Everyone wants the discount but the top value. It does not tend to work that way very often.

Reminds me of what my boss used to tell me. "We offer low cost, great service, and fast service. Pick which two of the three you want."

Yea, it is hard to do all in competition with others.

It is the same across all industries.

I tell my clients all the time, I shop for lenders for you but I am not placing you with a lender just because they are the absolute lowest. Most of the time, I am not. The reason is that those lenders are the lowest for a reason... because they suck and the only way they can get business is to offer the lowest rate. Speed and competency are important as is price. Sometimes you get lucky and a good lender has the best pricing but more often than not, I am skipping the lowest lenders and looking for a good lender with the best rate.

That changes too... as you can have a good lender all of a sudden run into issues. So, it is important for me to be tied into a community of brokers that I get that feedback on and can make those choices. "Oh, Lender B use to be great but I have been hearing a lot of brokers having issues with them recently, better to avoid right now."

A monkey can look at the lowest priced loan and send it there hoping it doesn't blow up in their face. A true professional helps balance that out... after all, it doesn't matter how good a rate is if you can't close on the deal.

 

[Sammy3469]

One aspect that isn’t getting mentioned here is that the past 15 years have been a sellers market. This is a generalization, but you could put most anything on the market and it would sell itself. That’s not necessarily the case (in some areas) anymore and having a selling agent that can market, the negotiate on price and terms, and then close the deal does have real value. Is that 6% who knows, but it’s also not as simple as paying someone a flat fee to fill out some paperwork.

That also means the broker is doing this full time, knows the market, knows the demand, etc. As @Chadstroma and others are pointing out that knowledge in a competitive market has real value.

 

[massraider]

Reminds me of what my boss used to tell me. "We offer low cost, great service, and fast service. Pick which two of the three you want."

This is the thread where people cannot believe people are trying to make money at their job.

 

[Da Guru]

I've thought for a long time that real estate agents are pretty much used car salesmen. I've only been on the buying side, but that should seem like easy money as a buyers agent. They don't have to show or list and split the commission. But instead, what I've found is that they try their best to push their own listings so that the can make money on both sides. Slimy ####s.

I know some very well, they are just like used car sales, but make a better commision.

 

[Stoneworker]

Reminds me of what my boss used to tell me. "We offer low cost, great service, and fast service. Pick which two of the three you want."

This is the thread where people cannot believe people are trying to make money at their job.

This is the thread that discusses why "people who are trying to make money at their job" were found guilty in a trial by jury of conspiring to keep their fees high.

And where the Justice Dept will soon learn about their appeal regarding whether the same group is in violation of antitrust laws

 

[Stoneworker]

Another good article in today's WSJ. It's long so I'll break into multiple posts for readability.

The Way You Pay to Buy or Sell a Home Is About to Change​

Home buyers and sellers face the prospect of major changes to the amount and the ways they pay their real-estate agents, following Tuesday’s historic verdict against the National Association of Realtors and large residential brokerages.

Those changes could range from minor tweaks to the commission system to a more radical restructuring of the real-estate industry, such as more people buying homes without using agents or buyers paying their agents by the hour.

In a report released ahead of the verdict, Ryan Tomasello, a real-estate industry analyst with Keefe, Bruyette & Woods, predicted that the lawsuits could lead to a 30% reduction in the $100 billion that Americans pay in real-estate commissions every year and push well over half of the almost 1.6 million agents out of the industry.

Nothing has changed yet for real-estate agents or for consumers in the middle of transactions. But new commission policies could come from a variety of directions. The federal trial judge might require changes to how the brokerages operate, or real-estate brokerages or multiple-listing services could institute new practices on their own due to concerns about potential liability.

Here are some scenarios for potential changes ahead:

 

[Stoneworker]

1. Sellers’ agents cannot offer commissions upfront​

The Missouri trial centered on how real-estate agents that represent buyers are paid. Under the current system, sellers pay their own agent’s commission—typically 5% to 6% of a home's selling price—which is in turn shared with the buyer’s agent.

In most markets, sellers are required to include the amount they will pay a buyer’s agent in order to advertise a home on a database known as a multiple-listing service.

NAR says the current system helps buyers because it allows them to direct their funds towards a down payment.

The plaintiffs’ lawyers argued that the current model makes it difficult for buyers and sellers to negotiate and keeps commission costs high, even though technology now enables buyers to find listings and research the market themselves.

One outcome favored by consumer advocates is that buyers would pay their own agents but could negotiate for the seller to help cover that cost as part of the deal.

“It’s not turning the whole system on its head, but it’s injecting market forces into the process to make sure you’ve got a correlation between service provided and the commission that the broker is getting,”

 

[Stoneworker]

2. Buyers must pay their own agents​

If sellers are banned from paying buyers’ agents, then buyers could be forced to come up with additional cash—or go without an agent of their own.

This could affect first-time home buyers the most. They are the least likely to have additional savings to pay for an agent on top of their down payments and closing costs.

In this scenario, more agents would likely offer hourly rates or a menu of services that buyers could choose from, such as touring properties, reviewing inspection reports or looking over final contracts. Buyers could also choose to have the listing agent facilitate the transaction for both parties at a lower cost.

 

[Stoneworker]

3. Sellers can choose whether to offer a commission upfront​

The most modest of the outcomes would make it optional for sellers’ agents to offer upfront to compensate the buyer’s agent. That would barely differ from the current scenario, because NAR has already said in recent weeks that sellers’ agents can make an offer of compensation as low as zero.

Northwest MLS, a broker-owned multiple-listing service in Washington state, hasn’t required sellers to make a minimum offer of compensation since 2019.

Thus far that has led to little change, according to court documents in one of the class actions. Some 99.75% of sellers in those markets continue to offer compensation to buyer brokers, and 95% of those offers are at rates exceeding 2%, according to the documents.

 

[Stoneworker]

4. New business models arise​

For years, well-funded startups have tried new business models for paying agents and they have almost universally failed or adopted a more conservative approach. A change to the rules for commissions could open the door to new ventures.

Purplebricks, a British company, entered the U.S. about five years ago charging sellers a flat fee to sell their home much lower than the typical percentage commission. The firm burned through tens of millions of dollars in the U.S. before closing up shop.

REX, co-founded by a longtime Goldman Sachs partner, also charged lower fees and didn’t promise to pay a buyer’s agent commission. It aimed to be more efficient in marketing properties through targeted ads rather than the multiple listing service. It too floundered.

REX co-founder Jack Ryan said he believes the verdict and the changes he hopes follow will help new startups to enter the market. “This will be a catalyst because no one could break the cartel,” he said.

 

[massraider]

This is the thread that discusses why "people who are trying to make money at their job" were found guilty in a trial by jury of conspiring to keep their fees high

Sometimes these discussions change. It's a crazy world out there

 

[Stoneworker]

The complaint under appeal by the Justice Dept takes a little different tack.

On November 19, 2020, the United States filed a civil antitrust Complaint against Defendant National Association of REALTORS® (“NAR”) alleging that a series of rules, policies,and practices promulgated by NAR resulted in a lessening of competition among real estate brokers and agents to the detriment of American home buyers

The Complaint alleges that certain NAR rules, policies, and practices have been widely adopted by NAR’s members, including the multiple listing services (“MLSs”) affiliated with NARthat facilitate the publishing and sharing of information about local homes for sale, resulting in a lessening of competition among real estate brokers and agents to the detriment of American homebuyers.

These NAR rules, policies, and practices include those that:

a. prohibit MLSs affiliated with NAR from disclosing to potential home buyers the amount of commission that the buyer’s real estate broker or agent will earn if the buyer purchases a home listed on the MLS;

b. allow brokers for home sellers (“buyer brokers”) to misrepresent to potential homebuyers that a buyer broker’s services are free;

c. enable buyer brokers to filter the listings of homes for sale via an MLS based on the level of buyer broker commissions offered and exclude homes with lower commissions from consideration by potential home buyers; and

d. limit access to lockboxes, which provide physical access to homes for sale, only to real estate brokers or agents working with a NAR-affiliated MLS.

USA vs. NAR - Competitive Impact Statement

 

[Zow]

This seems like it will be the "main story" on John Oliver this weekend.

 

[BassNBrew]

The complaint under appeal by the Justice Dept takes a little different tack.

On November 19, 2020, the United States filed a civil antitrust Complaint against Defendant National Association of REALTORS® (“NAR”) alleging that a series of rules, policies,and practices promulgated by NAR resulted in a lessening of competition among real estate brokers and agents to the detriment of American home buyers

The Complaint alleges that certain NAR rules, policies, and practices have been widely adopted by NAR’s members, including the multiple listing services (“MLSs”) affiliated with NARthat facilitate the publishing and sharing of information about local homes for sale, resulting in a lessening of competition among real estate brokers and agents to the detriment of American homebuyers.

These NAR rules, policies, and practices include those that:

a. prohibit MLSs affiliated with NAR from disclosing to potential home buyers the amount of commission that the buyer’s real estate broker or agent will earn if the buyer purchases a home listed on the MLS;

b. allow brokers for home sellers (“buyer brokers”) to misrepresent to potential homebuyers that a buyer broker’s services are free;

c. enable buyer brokers to filter the listings of homes for sale via an MLS based on the level of buyer broker commissions offered and exclude homes with lower commissions from consideration by potential home buyers; and

d. limit access to lockboxes, which provide physical access to homes for sale, only to real estate brokers or agents working with a NAR-affiliated MLS.

USA vs. NAR - Competitive Impact Statement

I thought this had been settled? Did the DoJ open it back up?

 

[BassNBrew]

A realtor’s commission shouldn’t be a flat % of a home’s selling price, rather, it should reflect the time and effort they invest in the sale. And they shouldn’t be incentivized to sell the most expensive homes. I think billing based on hours, like lawyers, makes more sense.

I’ve always thought it was odd that a realtor could make the same amount of commission money after showing one single house to a buyer (in which they go on to buy) versus another buyer who was shown 25 different houses and then finally found one to buy (assuming they do indeed buy).

That's because you're paying for the buyer who was shown 50 different homes and bought nothing because they lost there job or blew up their credit. It's the model of the plantiff's attorney who charges nothing unless you win.

 

[BassNBrew]

The complaint under appeal by the Justice Dept takes a little different tack.

On November 19, 2020, the United States filed a civil antitrust Complaint against Defendant National Association of REALTORS® (“NAR”) alleging that a series of rules, policies,and practices promulgated by NAR resulted in a lessening of competition among real estate brokers and agents to the detriment of American home buyers

The Complaint alleges that certain NAR rules, policies, and practices have been widely adopted by NAR’s members, including the multiple listing services (“MLSs”) affiliated with NARthat facilitate the publishing and sharing of information about local homes for sale, resulting in a lessening of competition among real estate brokers and agents to the detriment of American homebuyers.

These NAR rules, policies, and practices include those that:

a. prohibit MLSs affiliated with NAR from disclosing to potential home buyers the amount of commission that the buyer’s real estate broker or agent will earn if the buyer purchases a home listed on the MLS;

b. allow brokers for home sellers (“buyer brokers”) to misrepresent to potential homebuyers that a buyer broker’s services are free;

c. enable buyer brokers to filter the listings of homes for sale via an MLS based on the level of buyer broker commissions offered and exclude homes with lower commissions from consideration by potential home buyers; and

d. limit access to lockboxes, which provide physical access to homes for sale, only to real estate brokers or agents working with a NAR-affiliated MLS.

USA vs. NAR - Competitive Impact Statement

A. Never heard of this, need to look into it. I'm required to disclose any bonus I get offered by another agent or seller. I believe that's a state requirement, but may be part of the code of ethics.

B. We've been told numerous times over the last several years not to market our services to buyers as free.

C. I just logged into my mls and there's no way to search for homes by compensation.

D. Limit access or refuse to show? We pay for lockboxes to that track access and limit access to members that have a key. I will meet another agent to let them in if needed. Part of our fiduciary responsibility is to protect the home and it's contents. Not sure my seller wants me to let non-vetted people in to checked out their home. On the rental side I've seen how self access/showing can go bad. One of my tenants had rented another home from a scammer that had set up a self showing for her. She had paid money to someone who had hijacked the listing and was moving in when the the rightful agent showed up and wanted to know wtf was up.

 

[Stoneworker]

The complaint under appeal by the Justice Dept takes a little different tack.

On November 19, 2020, the United States filed a civil antitrust Complaint against Defendant National Association of REALTORS® (“NAR”) alleging that a series of rules, policies,and practices promulgated by NAR resulted in a lessening of competition among real estate brokers and agents to the detriment of American home buyers

The Complaint alleges that certain NAR rules, policies, and practices have been widely adopted by NAR’s members, including the multiple listing services (“MLSs”) affiliated with NARthat facilitate the publishing and sharing of information about local homes for sale, resulting in a lessening of competition among real estate brokers and agents to the detriment of American homebuyers.

These NAR rules, policies, and practices include those that:

a. prohibit MLSs affiliated with NAR from disclosing to potential home buyers the amount of commission that the buyer’s real estate broker or agent will earn if the buyer purchases a home listed on the MLS;

b. allow brokers for home sellers (“buyer brokers”) to misrepresent to potential homebuyers that a buyer broker’s services are free;

c. enable buyer brokers to filter the listings of homes for sale via an MLS based on the level of buyer broker commissions offered and exclude homes with lower commissions from consideration by potential home buyers; and

d. limit access to lockboxes, which provide physical access to homes for sale, only to real estate brokers or agents working with a NAR-affiliated MLS.

USA vs. NAR - Competitive Impact Statement

I thought this had been settled? Did the DoJ open it back up?

They appealed in June to open it back up. I'm no expert but 10/31 article talks in present tense so from all indications the appeal is still under active review.

Reuters 10/31/23 - The U.S. Department of Justice is separately asking a federal appeals court in Washington to let it revive an antitrust probe into the NAR's practices.

Reuters 6/5/23 - The phrase "has closed" does not mean that an investigation would "stay closed," the government said in its filing.

 

[Stoneworker]

The complaint under appeal by the Justice Dept takes a little different tack.

On November 19, 2020, the United States filed a civil antitrust Complaint against Defendant National Association of REALTORS® (“NAR”) alleging that a series of rules, policies,and practices promulgated by NAR resulted in a lessening of competition among real estate brokers and agents to the detriment of American home buyers

The Complaint alleges that certain NAR rules, policies, and practices have been widely adopted by NAR’s members, including the multiple listing services (“MLSs”) affiliated with NARthat facilitate the publishing and sharing of information about local homes for sale, resulting in a lessening of competition among real estate brokers and agents to the detriment of American homebuyers.

These NAR rules, policies, and practices include those that:

a. prohibit MLSs affiliated with NAR from disclosing to potential home buyers the amount of commission that the buyer’s real estate broker or agent will earn if the buyer purchases a home listed on the MLS;

b. allow brokers for home sellers (“buyer brokers”) to misrepresent to potential homebuyers that a buyer broker’s services are free;

c. enable buyer brokers to filter the listings of homes for sale via an MLS based on the level of buyer broker commissions offered and exclude homes with lower commissions from consideration by potential home buyers; and

d. limit access to lockboxes, which provide physical access to homes for sale, only to real estate brokers or agents working with a NAR-affiliated MLS.

USA vs. NAR - Competitive Impact Statement

A. Never heard of this, need to look into it. I'm required to disclose any bonus I get offered by another agent or seller. I believe that's a state requirement, but may be part of the code of ethics.

B. We've been told numerous times over the last several years not to market our services to buyers as free.

C. I just logged into my mls and there's no way to search for homes by compensation.

D. Limit access or refuse to show? We pay for lockboxes to that track access and limit access to members that have a key. I will meet another agent to let them in if needed. Part of our fiduciary responsibility is to protect the home and it's contents. Not sure my seller wants me to let non-vetted people in to checked out their home. On the rental side I've seen how self access/showing can go bad. One of my tenants had rented another home from a scammer that had set up a self showing for her. She had paid money to someone who had hijacked the listing and was moving in when the the rightful agent showed up and wanted to know wtf was up.

I didn't slog through the entire Impact Stmt but looks like break down A-D in more detail. Some of it appears to be not literal as written in summary but by virtue of the way the practices effectively operate. I'm in no position to judge either way but your comments are informative.