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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

#101

Post by teen »

hammock wrote: post #66
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"

This happened to me in 2019. I went into escrow and they didn't give me the offer for about 5 days. When I finally got it, it was lower than it should have been. It rubbed me the wrong way and I bailed out of the deal.

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

#102

Post by teen »

scottwick wrote: post #90
hammock wrote: post #66

Earlier quoted context omitted.

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

Do you see the deposit amount and all the details of the escalation from the triggering offer in that case? Say I saw that the triggering offer had a measly deposit and I suspected it of being fake. Would I be on the hook to prove it? Technically if I rescind my offer at this point I lose my own deposit, right?

Yes but they can drag their feet in giving it to you, since they can just sign your offer immediately. However, you can just cancel your offer after with a follow up document.

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

#105

Post by ralph84 »

xyzelement wrote: post #97
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 doesn't sound like you negotiated well and is a sign you could use an agent :) But seriously, imagine you and I are both bidding $1,000,000 on a house. You have an agent, so if your bid is accepted, your agent and the sellers agent each get $30,000. I don't have an agent. In my offer, I write "the sellers agent gets the usual 3%, and I am allocating the 3% that the buyer's agent would get towards the seller instea…

The commission is spelled out in the listing contract between the seller and their agent. The buyer is not a party to that contract and can’t dictate changes to it.

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

#106

Post by _ea1k »

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 sell!

Surely that means someone could cut the cost in half and make a much more attractive platform, right? Opendoor comes kind of close, but they end up shouldering a lot of the risk of the transaction and therefore tend to lowball.

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

#107

Post by scottwick »

teen wrote: post #101
hammock wrote: post #66

Earlier quoted context omitted.

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

This happened to me in 2019. I went into escrow and they didn't give me the offer for about 5 days. When I finally got it, it was lower than it should have been. It rubbed me the wrong way and I bailed out of the deal.

How did you bail without losing your deposit? I would have thought if you were the highest bidder you'd either be on the hook for the full purchase or lose your deposit.

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

#108

Post by notaustinpowers »

sokoloff wrote: post #63
notaustinpowers wrote: post #60

Earlier quoted context omitted.

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).

Yeah, it's usually unequal in the area I used to work in. The Agent's have their own agreements with their Brokers that are independent of any sale/purchase they work on. I've seen everything from 50/50 all the way to 90/10 (10% to Broker).

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

#109

Post by ska »

_aavaa_ wrote: post #89
majormajor wrote: post #70

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.…

> 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.

The entire thing is a bit of a racket.

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

#110

Post by ethbr1 »

mholm wrote: post #100
trey-jones wrote: post #93

Earlier quoted context omitted.

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…

The municipality is on their side because many people who try to get variances on these things are legitimately cutting terrible corners that compromise both the safety of the inhabitants (present and future) and the neighbors. It's inconvenient, but these regulations save a lot of lives/QoL from bad/naive actors.

The municipality is on their side because they're overworked.

In even the smallest town, if any appreciable percentage of new builds required custom handling... the system would instantly be person-starved and start backing up.

Business-as-usual is the fast/efficient path from a paperwork standpoint. Anything odd is (a) discouraged and (b) looked at with annoyance because it takes more time.

One reason it's almost always cheaper to tear-down fire damaged houses with still viable framing. No one wants to take the time to quantify exactly how much the framing was damaged.

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