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Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

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Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#41

Post by scottwick »

Not really related to the article but something I've been wondering...

In recent years the housing market has been so competitive that escalation clauses are often written into offers. They typically include a base offer of $X and then an agreement to escalate that value by increments (maybe $1-5k at a time) up to some cap. All the offers are collected by a certain date and then an auction is run behind the scenes by the realtors involved.

What's to stop a seller from having one of their friends enter into one of these escalations? Submit a non-serious offer with a high escalation and include a minimal deposit which would be forfeited if that fake offer happens to win but otherwise hope it comes in 2nd to push everyone else's escalation up.

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#42

Post by bozhark »

a-posteriori wrote: post #2

Does anyone know what this actually means for real estate brokerage fees? There are few markets which have supported 3-5% brokerage fees (even i-banking is <100bps at scale now) so I'm curious where the fees will settle.

Nothing over 1.5%.

Ever.

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#43

Post by tehlike »

scottwick wrote: post #41

Not really related to the article but something I've been wondering... In recent years the housing market has been so competitive that escalation clauses are often written into offers. They typically include a base offer of $X and then an agreement to escalate that value by increments (maybe $1-5k at a time) up to some cap. All the offers are collected by a certain date and then an auction is run behind the scenes by…

sadly the answer is honor code.

There are also a lot of shenanigans realtors could be pulling.

Example: Few years ago, we wanted to buy a house, we made a bid for 2.6, the realtor said they would not accept anything less than 2.8 as this was their competing offer. We said no, the house sold for 2.4. I suspected the realtor might have been double dipping, or bluffing, i don't know. But what I do know is they did not present the offer to the seller.

(numbers are not exactly precise, but directionally and somewhat magnitude wise, it should be similar).

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#44

Post by koolba »

Good for them. On the list pointless middlemen, they’re definitely at the top.

One of the dumbest parts of the real estate commission scam is purporting the lie that “the seller pays the commission”. Anyone with half a brain knows that if money is coming out of a transaction, it’s a transaction cost being eventually passed onto the buyer.

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#46

Post by [deleted] »

poulsbohemian wrote: post #13

Here's the brief response I offered earlier today when asked what this actual does: I don’t really expect significant changes. We are in a more balanced market today than when these lawsuits were first filed. Many sellers will find it advantageous to offer buyer agent compensation. If/when we return to a seller-advantaged market, some buyers may need to pay their agents directly, which could involve rolling those cos…

[deleted]

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#47

Post by kstrauser »

asah wrote: post #29
underseacables wrote: post #16

I know people will knock on realtors, but I've had nothing but good experiences with them. There's so much stuff I don't know that I don't know, and the ones I've had have been very helpful. Worth every penny, in my opinion.

not sure why you're getting downvoted. If realtors add more value than their commission, then great. Consider normies who don't understand why all this "tech stuff" costs so much money.

The average home sale price around here is around $1M. Realtors simply do not provide $60K worth of value to the sale of one.

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#48

Post by jandrese »

notaustinpowers wrote: post #27
jfk13 wrote: post #12

Earlier quoted context omitted.

These US fees always seem astonishingly high to me. Here, something more like 1.5% would be typical.

Yeah, it is very high. Although, the real estate industry in the US is vastly different. - Agents do not receive salary, benefits, etc. Their only payment is when they close a deal. - Real Estate Agents are a dime a dozen since the licensing and training is pretty minimal. So lots of competition fighting over small supply, so it can be difficult to consistently get clients. - Agents can pay around $100/month to their…

Yeah, it's tough on both sides. Competition is fierce for leads, but the rates have to be sky high to support the enormous mass of realtors. If the fees drop a lot of people are going to need to find new jobs.

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#49

Post by FireBeyond »

scottwick wrote: post #41

Not really related to the article but something I've been wondering... In recent years the housing market has been so competitive that escalation clauses are often written into offers. They typically include a base offer of $X and then an agreement to escalate that value by increments (maybe $1-5k at a time) up to some cap. All the offers are collected by a certain date and then an auction is run behind the scenes by…

Very little. When I was younger growing up in Australia, auctions were very common, and it was very much the "traditional" model, everyone stands around in front of the property and puts up their hand to bid.

Regularly auctioneers would get caught taking bids from trees or vehicles to push prices up. They'd get caught when their fake bid was the highest. It became so common it was almost expected, and reforms to the process had to be introduced.

Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages

#50

Post by balderdash »

stuff4ben wrote: post #5

Commission based on home value is a joke. Realtors should earn a flat-rate.

I’d be willing to pay a percentage above some predetermined price (e.g. if the realtor produces some sort of above market outcome) - but agree, that the value provided does not equal 3-6% of home value
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