Commission based on home value is a joke. Realtors should earn a flat-rate.
So negotiate that with your agent if that's what you prefer.
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
#12Does 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.
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.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#13Here'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 costs into their financing. Lenders are more of an expert than myself on any issues in doing that, but it appears to happen in other states already. One of the problems of these lawsuits is the conflation of agency with payment. States - both WA and OR, for example - are working to fix the agency problem that wasn’t made explicit to buyers post-subagency. But, I don’t think there’s any question that buyer’s having to directly pay buyer’s agent compensation will be a higher cost to buyers.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#14Does 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.
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…
> maximizing the value of their client's home by reducing the commission the seller pays.
Selling a house quickly (convincing the seller to take a qualified and likely-to-close offer) still dominates as a strategy over eeking out a few extra points of contract price. As an agent, taking 1.25% or 1.5% of a $950K sale quickly is way better than holding out for a $1M offer.
The difference in commission at 1.5% on a $50K delta in sales price is $750. Freeing up your time to work on the next listing is more valuable.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#15Commission based on home value is a joke. Realtors should earn a flat-rate.
So negotiate that with your agent if that's what you prefer.
So why downvote me? We've got this already in our buyer's agency agreements - if you as a buyer want to negotiate compensation with your agent, you have the ability to do that. Similarly, in both states where I work, you as a seller have had the ability to choose what, if any, compensation you want to offer to a buyer's broker. None of this is actually that different from how you negotiate (or not) with any other professional - your lawyer, your accountant, your financial advisor, etc.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#16I 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.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#17Commission based on home value is a joke. Realtors should earn a flat-rate.
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.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#18Commission based on home value is a joke. Realtors should earn a flat-rate.
You can. It's just a bit of a racket (hence, conspiracy judgment) and nobody will work with you if you only offer a flat rate. Since MLS is mostly limited to Realtors in most markets, you're basically locked out from posting there. There's ways around it, and flat fee brokers that exist, but you hamper your sales ability. Not an issue when its a sellers market, but can be rough in a buyers market.
There are flat rate realtors where I live. However they are only 50%, the still give the same 3.5% to the buyers agent, but they take for themselves a fixed rate to get you on MLS. I'm not sure if it is a good deal - they still charge high prices relative for what they do for you. (it is cheaper than a full agent, but they also do much less)
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#19There'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.
Re: Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages
#20Earlier quoted context omitted.
So negotiate that with your agent if that's what you prefer.
So why downvote me? We've got this already in our buyer's agency agreements - if you as a buyer want to negotiate compensation with your agent, you have the ability to do that. Similarly, in both states where I work, you as a seller have had the ability to choose what, if any, compensation you want to offer to a buyer's broker. None of this is actually that different from how you negotiate (or not) with any other pro…
Negotiation is not an effective strategy when there is active collusion to fix prices. You are commenting on a story where a jury just found that had been systematically done.