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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

#61

Post by SoftTalker »

ransom1538 wrote: post #19
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…

Just sell it / or buy it yourself. It isn't hard by any stretch. You can use a $200 listing broker on a MLS site. That is the big secret. Then it gets on zillow,redfin, etc automatically.

You might not even need to do that much. I sold a home in a desirable neighborhood (I don't mean high-end, just a nice solid middle-class area with good schools, etc) by just putting a "for sale" sign in the front yard.

Having commission be a percent of sales has some theoretical advantages. For example you might think the agent is motivated to get you the highest selling price. But in reality they are much more interested in making a sale at any price, because that lets them get paid and lets them move on from marketing your property.

Residential real-estate transactions with a mortgage are about as regulated and standardized as it gets. The listing agent actually does very little beyond getting the property listed in the MLS. The difference in the amount of work they do in selling a $100K house vs. a $900K house is small (in fact the $100K house might take a lot more work because at that price it's probably got some serious drawbacks), so why should the higher sale price pay them much more?

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

#63

Post by sokoloff »

notaustinpowers wrote: post #60
sokoloff wrote: post #38

Earlier quoted context omitted.

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.

Ah. I’ve never seen a percentage-based commission divided unequally into the four parts: agent and brokerage crossed with listing and buying.

I have seen 6% (1.5% x 4) and 5% (1.25% x 4).

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

#64

Post by nordsieck »

FireBeyond wrote: post #51
tehlike wrote: post #43

Earlier quoted context omitted.

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…

> I believe in most states a real estate agent (I despise 'Realtor(TM)') is obliged to present an offer

Sure. But enforcement is the soul of the law.

And it's pretty tough to catch stuff like that. Most people who put in offers and don't "win" aren't sitting around monitoring how much the winning bid ended up being.

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

#65

Post by pc86 »

ransom1538 wrote: post #19
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…

Just sell it / or buy it yourself. It isn't hard by any stretch. You can use a $200 listing broker on a MLS site. That is the big secret. Then it gets on zillow,redfin, etc automatically.

In many states that just means the other agent gets all the commission instead of splitting it with your agent. You don't get any of it, and it isn't discounted anywhere.

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

#66

Post by hammock »

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…

You can ask to see the other offer if the escalation clause is triggered. It technically has to be "bona fide"

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

#67

Post by stronglikedan »

RHSeeger wrote: post #59
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...…

It was 6% when I bought, but I can tell you that my ex put our realtor through hell during the process - same questions over and over, daily phone calls for status updates once under contract, etc. I would have felt bad, but I knew how much she stood to make, so I didn't say anything and just let it all happen. I feel she earned it, lol.

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

#68

Post by ejb999 »

PaulDavisThe1st wrote: post #24
mynameisash wrote: post #17

Earlier quoted context omitted.

I expect that when it comes time to sell my house, I'll hire a real estate attorney to make sure all the paperwork is in order, and I'll deal with the rest myself. I engaged an attorney when I bought my house, and she was super thorough.

I've sold 4 houses "by owner". I didn't even use an attorney for 3 of them - just a title/escrow service who take care of handling the deposit, filing the deeds after the funds transfer is complete etc.

buying a house, I would want an attorney - selling the house, I agree, no need for a realtor or attorney if you are willing to do a bit of work yourself.

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

#69

Post by closewith »

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…

I think this is unimaginative. More than likely, eventually the US will join most of the world in having no buyer's agents and low seller's agent commissions.

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

#70

Post by majormajor »

RHSeeger wrote: post #59
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...…

> 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...

In hot markets this is a way people often get an advantage as a buyer: tell the selling agent you want to use them as your agent too, so they get the whole 6% if the seller picks your offer. So if the bids end up being close, the agent ends up lobbying for you (or lobbying you to make your offer closer).

Some selling agents refuse to do this because it's pretty shady, but definitely not all.

I've also heard of similar things including negotiating down the selling agent's cut as part of it but haven't seen as much of that firsthand.

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