Jury Finds Realtors Conspired, Awards Nearly $1.8B in Damages • Hacker News Board

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

#71

Post by MikeTheGreat » Tue, Oct 31, 2023, 8:16 PM UTC

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…

This is just my understanding, but here goes:

1) If your bid wins then you're on the hook to buy the house. Part of the offer your make includes "earnest money" which is that deposit you're talking about (which you forfeit if you don't actually buy the house). The seller sees all the offers so presumably you putting down $500 earnest money on a $300K house would look suspicious enough to get you ignored by the buyer.

2) However, you've got a bigger issue: it's a secret auction. You put in your bid/offer, and so does everyone else, but _nobody_knows_about_anyone_else's_bid_. Heck, you don't even know how many other people are bidding. You _may_ be able to ask your realtor to nicely ask the seller's realtor for a general description of how hot the listing is (which works in the realtors' favor - the hotter the listing, the more you'll anticipate needing to bid), but beyond that you don't know about the other bids. And you for sure don't know about the specific, bogus bid that the realtor's friend put in to influence all the people that don't know about the bogus bid :)

I might be wrong (realtor's friend puts in a bogus bid so the seller's realtor can lie and say the listing is hot, after your realtor asks them about it), but I don't think this is a strategy that will work in general.

Legal context: United States

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

#72

Post by poulsbohemian » Tue, Oct 31, 2023, 8:16 PM UTC

riku_iki wrote: post #26

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…

> Many sellers will find it advantageous to offer buyer agent compensation so, now conspired realtors charge seller and not buyer. Still looks broken.

I guess you aren't familiar with this having been the system in most markets for decades?

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

#73

Post by TedDoesntTalk » Tue, Oct 31, 2023, 8:17 PM UTC

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.

That doesn't help. The seller does not save money unless BOTH buyer and seller have no real estate agent.

If the buyers have a real estate agent and the seller does not, the seller pays the buyer's real estate agent double their usual payment - at least in the 3 states where I've sold properties.

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

#74

Post by SoftTalker » Tue, Oct 31, 2023, 8:17 PM UTC

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.

Same. It's all very standardized and the title/escrow company does it 10 times a day and will handle all the paperwork and filings.

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

#75

Post by pc86 » Tue, Oct 31, 2023, 8:17 PM UTC

scarface_74 wrote: post #52

ejb999 wrote: post #10

Earlier quoted context omitted.

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.

I mean yes, it's sort of tautological that if you are trying to sell a home in a place very few people want to live, it might be (but isn't by definition!) harder to sell than someplace where a lot of people want to live.

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

#76

Post by jliptzin » Tue, Oct 31, 2023, 8:18 PM UTC

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...…

Yea, it’s fucked. As a buyer, I had an agent for a while, thinking that since the same commission is coming out from the seller’s side anyway, it can’t hurt. Wrong. I kept having my offers turned down without any good reasons, getting slow walked on offers that were for the seller’s full asking price, etc, until I dropped the buyer’s agent and just went directly to the seller’s agent and it was amazing how fast the offer was accepted.

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

#77

Post by sp332 » Tue, Oct 31, 2023, 8:18 PM UTC

bogota wrote: post #39

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…

Honestly just going to do a FSBO if i ever sell. The fact that I pay out 5% of my house price for what is essentially a few hours of data entry work is beyond stupid.

When we bought, the seller's agent apparently spent a good chunk of her fee on little scent dispensers. We were finding those things tucked behind cabinets for months.

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

#78

Post by poulsbohemian » Tue, Oct 31, 2023, 8:18 PM UTC

bogota wrote: post #39

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…

Honestly just going to do a FSBO if i ever sell. The fact that I pay out 5% of my house price for what is essentially a few hours of data entry work is beyond stupid.

So go for it! If you believe you have the ability to market your house successfully, then by all means do so. As a realtor, if I had a house in a market where I don't do business, there is absolutely no bloody way I would try to sell my own home.

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

#79

Post by loosescrews » Tue, Oct 31, 2023, 8:18 PM UTC

bogota wrote: post #39

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…

Honestly just going to do a FSBO if i ever sell. The fact that I pay out 5% of my house price for what is essentially a few hours of data entry work is beyond stupid.

You will likely still need to offer a buying agent commission if you want buying agents to show the house. Still, that cuts the fee roughly in half.

At least some selling agents do a lot more than data entry. They generally pay for photos, staging, and landscaping while the house is on the market. They also research similar houses to position the property in the market and talk to buying agents. A lot of the negotiation can happen before the offer.

You can do most if not all of that yourself and you may do a better job than the real estate agent you would have hired. Doing a good job is a fair amount of work. Most real estate agents cost the same amount, so there generally isn't a price different between a good and a bad agent (unless you count the commission on a higher sale price). If you can find a good one, it is likely worth the cost. A bad one might even decrease your sale price though.

Do you think you can do a better job selling your own house than you can do at hiring a real estate agent?

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

#80

Post by alwa » Tue, Oct 31, 2023, 8:19 PM UTC

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’ve never been involved with residential real estate in the US, so forgive me if I’m missing something obvious.

Why will it be a higher cost to buyers? At the macro level, aren’t the transaction costs effectively priced in? Is the idea that the home has some absolute value that exists independently of the cost structure of the market it trades in (so the buyer paying commission directly is doing so “on top of” this amount as it’s valued under the status quo)?

Is it mainly a question of categorizing the commission as “a cost” rather than “hidden in the seller’s asking price therefore part of the value of the home”?

Otherwise, why wouldn’t the buyer who now says “I have $100,000, so I’ll buy a $100,000 house” instead say “I have $100,000, and I know my agent is going to charge me around $3,000, so I’ve got to buy a $97,000 house instead”? If that becomes the new norm, wouldn’t all sellers find that people who could buy at $100,000 before can only buy at $97,000 now, and have to price their homes accordingly, making it a wash?

If it were me, I feel like I’d want to hire my agent at a flat rate if I could, to reward them for finding me a better deal rather than incentivize them to make more by selling me more. But then again maybe that’s part of the higher cost to buyers that you mention: maybe there’s no question that buyers’ agents will be able to squeeze the buyers for more commission directly than they presently get out of the sellers?