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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

#171

Post by DavidPeiffer »

ethbr1 wrote: post #117
_aavaa_ wrote: post #89

Earlier quoted context omitted.

> Some selling agents refuse to do this because it's pretty shady, but definitely not all. This is a blatant conflict of interest. My god.

It's only a conflict of interest if either the seller or the buyer expect their agents to negotiate price for them. Generally agents steer well clean of that, for legal and time reasons. A realtor is there to put properties in front of you / put your properties in front of others, and then close the deal when you tell them which property you're interested in. Volume pays realtors, not price-over/under-replacement.

>It's only a conflict of interest if either the seller or the buyer expect their agents to negotiate price for them.

There are other details that come up through a transaction that many people wouldn't even think about. Are appliances included? Window treatments? Leftover paint? What year the transaction closes could impact taxes or incentives for either party. Inspections (what types of inspections are permitted, their timeline, what will be repaired prior to sale).

If there are disagreements about any of those, or if the property was materially misrepresented by the selling agent, it's way more messy than if another agent is involved and it's clear who represents who.

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

#172

Post by OJFord »

_ea1k wrote: post #106

The problem isn't just realtors, it is that the whole system is designed to maximize transaction costs. Who cares how much the attorney and loan paperwork cost when they are only 1-2%, you are already paying 5-6% to realtors, ~.5-1% in repair costs, and often a part of the buyer's closing costs too? But if you think about that wholistically, that means sellers are paying 8-10% of the cost of a house every time they s…

The problem is 'buying agents'. Looks totally bonkers from over here (UK, I think it's foreign to at least most of Europe too).

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

#173

Post by tehlike »

weeblewobble wrote: post #164
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…

Maybe there was something else unattractive about your offer and the 2.8 fell through? Happens all the time. When I sold a house recently I took the second highest offer, because the highest offer came from someone out of state who had never set foot in the house

Realtor definitely didn't mention anything, but mentioned a higher offer, which definitely didn't end up happening.

It was a standard bay area offer - 20% down preapproval, no contingency, 4 weeks close, and could have been shorter.

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

#174

Post by salamanderss »

Turing_Machine wrote: post #169
LeafItAlone wrote: post #133

Earlier quoted context omitted.

Your list of “mind-boggling” items all seem extremely reasonable to me. Your city and neighbors don’t want to be responsible for or have to deal with your house falling down because it was improperly constructed. And having lived in neighborhoods with septic systems most of my life, a little neglect can go a long way. Unless you’re building in the middle of nowhere (far from anything labeled a “city”), there are obli…

> Your city and neighbors don’t want to be responsible for or have to deal with your house falling down because it was improperly constructed. Why on earth would the city or the neighbors be "responsible" for that?

They usually aren't it's an argument used to scare people into making housing stock replenishment more expensive and lock in property values.

I'm building a house now. I sent the county... A picture of a square on a map. No plans no inspections nothing. Fuck all that. I build based on what seems reasonable after a cool Busch Light and then I just do it without asking permission from anybody.

Half my county did the same. It's not rocket science, and the world here hasn't fallen apart or burned down. But you will be told the opposite to get locked into expensive contractors and corrupt inspectors and the cash extracting nightmare licensing and permitting systems that surround that.

And before anybody gets too excited... this is all 100% legal if you pick the right spot.

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

#175

Post by brewdad »

Turing_Machine wrote: post #169
LeafItAlone wrote: post #133

Earlier quoted context omitted.

Your list of “mind-boggling” items all seem extremely reasonable to me. Your city and neighbors don’t want to be responsible for or have to deal with your house falling down because it was improperly constructed. And having lived in neighborhoods with septic systems most of my life, a little neglect can go a long way. Unless you’re building in the middle of nowhere (far from anything labeled a “city”), there are obli…

> Your city and neighbors don’t want to be responsible for or have to deal with your house falling down because it was improperly constructed. Why on earth would the city or the neighbors be "responsible" for that?

When my neighbor's house fails and causes damage to my property, I'm not legally "responsible" but I still have to deal with a whole lot of negatives. Hence the "or deal with it" part of OP's statement. Far better to reduce the risks by making sure the project isn't being half-assed up front.

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

#176

Post by 404mm »

Willish42 wrote: post #170
_ea1k wrote: post #106

The problem isn't just realtors, it is that the whole system is designed to maximize transaction costs. Who cares how much the attorney and loan paperwork cost when they are only 1-2%, you are already paying 5-6% to realtors, ~.5-1% in repair costs, and often a part of the buyer's closing costs too? But if you think about that wholistically, that means sellers are paying 8-10% of the cost of a house every time they s…

Dumb, uninformed question here, but are there not some sort of For Sale By Owner systems that cut into the huge percents in closing costs? Or is the issue that you have to pay the buyers' realtor fees too and that's unavoidable? I'm trying to figure out why nobody's figured out "DIY MLS listing as a service without having to pay for a realtor". Maybe everyone who does this just gets a realtor's license or something.

I’m not a realtor but I considered selling my home myself once. Two issues I hit immediately:

1. I could not list the home in MLS as That system requires annual fees to use and you need to have a realtor license.

2. You still need to pay the purchasing side’s realtor otherwise they will simply not consider your home for their clients. That’s 3% that’s hard to get any lower.

I ended up negotiating my realtor’s selling fee down to 1.5% with the promise of using them for my purchase as well.

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

#177

Post by [deleted] »

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…

[deleted]

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

#178

Post by philips »

conductr wrote: post #122
RHSeeger wrote: post #59

Earlier quoted context omitted.

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...…

Technically, the 6% goes to the Seller agent. They promote on the listing how much they're willing to share with the Buyer's agent; half is customary but not set in stone. There are agents for your situation. They'll collect the 3% (or whatever it is) and rebate it back to you at or after closing; less some fixed fee ($600 in my experience). They are not going to do much for you, but if you already found the house yo…

In Oregon it is illegal, by statute, to give a refund to a real estate client.

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

#179

Post by cgh »

nicholasjarnold wrote: post #112
RHSeeger wrote: post #59

Earlier quoted context omitted.

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 used an attorney specializing in real-estate to represent our side of the house during my first home purchase. We subsequently reduced the bid by 3% with an explicit note about why (no buyer's agent commission to pay). The seller's agent was a broker and was apparently motivated because they accepted our deal along with fixing a list of little items uncovered during inspection. We paid our lawyer a $2-3k iirc. I'll…

Same, we used a notary public for most of the paperwork and a lawyer for a bit of it. I think I calculated that we saved around $20,000.

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

#180

Post by aidenn0 »

trey-jones wrote: post #93
RHSeeger wrote: post #59

Earlier quoted context omitted.

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's like this throughout the real estate and real estate development industries to be honest. Building my own house I expected plenty of savings over buying (and to be fair, I still did of course), but even beyond permitting (which is also more about who you know than what you know) I encountered things like this (roughly from most mind-boggling to least): - You can't build a septic system, you have to use sewer bec…

Your list seems fairly reasonable.

I looked into building where I was (because land was surprisingly cheap compared to houses) and was told to allocate 2 years and $250k for permits. A significant chunk of that was paying an architect to respond to the city and resubmit the plans. This was back when most houses were under $1M, and the lots we were looking at were around $200k, so the permits were literally more valuable than the land, and a pretty large fraction of the value of the improvement.

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