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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

#51

Post by FireBeyond »

tehlike wrote: post #43
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 p…

> But what I do know is they did not present the offer to the buyer.

I believe in most states a real estate agent (I despise 'Realtor(TM)') is obliged to present an offer (at least by the Realtor's Code of Conduct/Membership Agreement).

Edited to add: I'm not sure if this refers to seller agents (who cannot hold back an offer from their client), or to buyer agents, presenting that to the seller side, or both. I think at least the first.

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

#52

Post by scarface_74 »

ejb999 wrote: post #10
stuff4ben wrote: post #5

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

I agree - especially for the last few years, when in order to sell a house all you had to do was put in on the market - and then get 10-15-20 offers at or above listing price - no agent deserves a 6% commission for simply getting something listed on zillow or MLS where in recent years, the houses just sold themselves.

That’s only true if you are in a competitive market. There is a whole swath of land in flyover country and rural America where it can take awhile to sell a house.

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

#53

Post by jjtheblunt »

jfk13 wrote: post #12
notaustinpowers wrote: post #4

Earlier quoted context omitted.

This could change the process to this: 1) Seller gives a portion of their home price to their Agent as a commission (let's say 3%). The seller only paid 3% in commissions. 2) The Buyer negotiated a commission with their Agent (let's say $10,000). Which the buyer pays out-of-pocket, or has paid out of their financing for the home. This allows the Seller's Agent to maintain their duty to maximizing the value of their c…

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

For what definition of "Here"?

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

#54

Post by taude »

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…

I think a lot of the escalations involve more than just one other person bidding, so you'd really need to be running a good game to get three or four people involved to run up a price in something like this.

Additionally, in a competitive market, with multiple offers, people aren't doing a bare minimum deposit. More like 30 - 50K is involved based on my experience, but it varies dependending on state.... I'm currently looking in a new market, and we were told our offers should have about 10 to 30K on them between Due Dilligence and Ernest money....

Besides, it's just easier for the seller/buyer agent to have a conversation on which buyer wants it the most.

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

#55

Post by scarface_74 »

Spooky23 wrote: post #35
judge2020 wrote: post #21

Earlier quoted context omitted.

> no agent deserves a 6% commission for simply getting something listed on zillow or MLS Typically 3% is seller agent commission and 3% is buyer agent commission - although in the paperwork it's most likely 6% to the seller's agent and the seller's agent offers 3% to the buyer's agent. Although 5% total / 2.5% to each realtor is becoming a bit more popular as of recent, based on the listing I browse.

Remember there’s no professional responsibility for realtors, so they do shady shit like shop the house internally to keep the full 6%.

You choose the buyers agent.

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

#56

Post by senorrib »

koolba wrote: post #44

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.

Anyone with microeconomics knowledge would tell you that it depends on the elasticity on each side of the transaction.

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

#57

Post by scarface_74 »

fma wrote: post #31
stuff4ben wrote: post #5

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

Agreed. Add to the fact if you're a seller agent the money is easy. A buyer's agent struggle. AFAIK usually you start out as a buyer's agent and build up a network/reputation before people trust you to sell. In a seller's market, seems like a buyer's agent should be compensated more because it's more difficult to win bids now.

Not every inch of America is in such a competitive market.

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

#58

Post by bravoetch »

tehlike wrote: post #43
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 p…

I had a similar issue. A put a full price cash offer on a place for 1.9. The seller said they had a competing offer that was higher and asked me to submit a new offer at 2.1. I declined, and said they are welcome to provide a written counter offer at 2.1. The reason they won't counter is that a new higher offer from any buyer (me) will trigger escalation clauses for other buyers offers. Dirty trick that screws over buyers, because sellers can see all offer details.

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

#59

Post by RHSeeger »

rubymancer wrote: post #7

There's not much to the article. > KANSAS CITY, Mo.—A federal jury on Tuesday found the National Association of Realtors and large residential brokerages liable for about $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high. > The verdict comes in the first of two major antitrust lawsuits that target decades-old industry practices and seek to drive down commiss…

I bought a few years back and we didn't really use an agent to find the house at all. Looking into it, I found that a certain percentage of the sale amount goes to pay the agent(s); 6% I think. If there are two agents, they each get half. If one person doesn't use an agent... the other person's agent gets it all. The person without an agent doesn't get to keep their half... it just all goes to the other agent. Wtf...

So anyways, we wound up bringing in an agent to help us out with the last bits, because we had to pay the money anyways, it might as well go to someone that helped us in some way.

The real estate process is fairly broken, as far as I'm concerned.

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

#60

Post by notaustinpowers »

sokoloff wrote: post #38
notaustinpowers wrote: post #37

Earlier quoted context omitted.

The main issue with that possibility is many brokerages (at least ones in my area) do not allow a Seller's Agent to reduce their commission without prior Broker authorization. Regardless of what the Seller themselves wants. So while that deal may be advantageous for the Seller (sell quickly) and the Agent (get the deal over with and move on to the next), the Broker is the one getting paid a lower sum and will not all…

Nothing in my comment is about changing the percentage of the commission. (The 1.25% or 1.5% is simply the listing agent's personal split of a 5% or 6% total commission [whichever is customary in the local area]).

Sorry, I didn't explain enough. The total commission remains 6%, but if the Seller's Agent split is only 1.25%, the Seller Agent's Broker (most likely) will deny that as the Broker would receive a reduced cut of the commission.

The Seller and the Seller's Agent may be cool with the reduction, but the Broker would ultimately have the final say since it's, legally, their contract.

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