Real Estate Crash thread

[I Skied Bandini Mountain]

So at worse this case will now force already cash strapped buyers to pay their brokers instead of the seller.
Or the seller raises the price of the home to offset the buyers broker fees and everyone continues as normal.

Yeah, if anyone thinks this is going to lower the price of homes...

[liv2ski]

So at worse this case will now force already cash strapped buyers to pay their brokers instead of the seller.
Or the seller raises the price of the home to offset the buyers broker fees and everyone continues as normal.

Hopefully it will open up representation based on a flat fee or perhaps billable hours rather than a percentage of the home. I mean, back when a house was $200k-$300k, I got the 3% comp to the buyers agent, but with prices where they are now in CA, fuck that. Comp over $10k is full retard in my book.

[lowsparkco]

Nothing will change until all the appeals are exhausted. I don’t know how this was decided by a jury, but I don’t think it will hold up to a judge’s scrutiny.

The rub is that all of our commissions are paid voluntarily. I closed a deal on Friday, I represented the Buyer. The Seller did not pay my fee. The Seller paid the Listing Broker who agreed when he listed the house to pay a cooperating fee to whomever brings the Buyer. The Seller could have refused to pay any fees. They probably wouldn’t have been able to find anyone to help them for free, but that’s a free market at work, no?

Ironically I think this is going to accelerate the takeover of local markets by Redfin, Zillow, and other out-of-market corporations. We’ll see….

[lowsparkco]

Hopefully it will open up representation based on a flat fee or perhaps billable hours rather than a percentage of the home. I mean, back when a house was $200k-$300k, I got the 3% comp to the buyers agent, but with prices where they are now in CA, fuck that. Comp over $10k is full retard in my book.

The percentage is always negotiable. Higher dollar homes are often sold at a lower percentage to each broker.

[DoYou WannaDance]

Pretty much. Wyoming is funny...equal parts libertarian-ish 'leave us the fuck alone' and 'but God says..."

Is it still impossible to sue? I heard that no matter how bad the hospital fucks up and botches a surgery and kills someone they judges just aren't awarding a damn thing no matter what.

[liv2ski]

The percentage is always negotiable. Higher dollar homes are often sold at a lower percentage to each broker.

Nope, I look at listings daily and comp on multi million dollar homes is still 2.5% to a buyers agent. Full retard.

[lowsparkco]

Nope, I look at listings daily and comp on multi million dollar homes is still 2.5% to a buyers agent. Full retard.

I don’t think you’re understanding me. The Seller is choosing that rate. Sure, the Listing Agent is pitching it. But, you could choose to pay 2 points or a point and a half. Because most clients who haven’t chosen a retail broker also choose the same pricing structure doesn’t mean the price was fixed. You’re looking somewhere that an NAR affiliated MLS syndicates a listing. That’s not the only way you can sell a house.

I have clients negotiate their commission often. Perhaps they’re paying 5.5 percent and we are offering 2.5 for the cooperating side? Perhaps I’m charging 4 percent and paying 2.5 points buy side? No one knows other than the broker and the client.

There is a little nuance to how it works. No one says you have to engage in representation period.

I guess I shouldn’t be surprised that someone who feels good about typing “full retard” might miss the nuance.

[liv2ski]

Whatever the seller is talked into by the listing agent effects the buyers price. After 39 years in the industry, I think the commissions paid are out in left field (is that better). I for one think the entire commission schedules pushed and MLS are a racket that needlessly cost the consumer tems of thousands on most transactions in HCOL areas. Obviously the courts agree with me.

[SKIP IN7RO]

Whatever the seller is talked into by the listing agent effects the buyers price. After 39 years in the industry, I think the commissions paid are out in left field (is that better). I for one think the entire commission schedules pushed and MLS are a racket that needlessly cost the consumer tems of thousands on most transactions in HCOL areas. Obviously the courts agree with me.

Haha, nice edit, you fucking boomer cunt

[Foggy_Goggles]

Commission is negotiable and should be negotiable but is it really? Market's are regional and all that. Around here the cartel of puffy coat mom realtor will blacklist ya for anything less than full boat.

How the Realtor(tm) has held on for so long for so long is not something I would have guessed. I see the good one hustle on the listing side but the buyer side? Half the time the potential buyer just txt the sellers agent and sets up a showing, commission gets knocked down 1% and the deal closed cash!

[RootSkier]

The rub is that all of our commissions are paid voluntarily. I closed a deal on Friday, I represented the Buyer. The Seller did not pay my fee. The Seller paid the Listing Broker who agreed when he listed the house to pay a cooperating fee to whomever brings the Buyer. The Seller could have refused to pay any fees. They probably wouldn’t have been able to find anyone to help them for free, but that’s a free market at work, no?

No, it's not the "free market" when the NAR absolutely mandates that listings include non-public unilateral offers of compensation to the buyer's agent, and forbids realtors(TM) from including anything about commissions in a buy/sell. And that is what the case is about. It has nothing to do with how sellers negotiate with listing agents.

If you want to know more, read the first few pages of the class certification order here: https://www.mow.uscourts.gov/sites/m...cv-332-741.pdf, rather than shitty news articles about it.

I predict this will hold up on appeal, even though I don't pretend to understand antitrust law, which is one of the most complicated areas of the law in the US. But I am not surprised that several large brokerage groups settled for well into nine figures, collectively.

At the same time, I am very much looking forward to a bunch of realtors(TM) opining on the finer points of this complicated area of law.

[PNWbrit]

that’s a free market at work, no?

No.

The industry conspiring to inflate commissions is the very antithesis of a free market.

Jury verdict below.

1738000-1738923-10919224354.pdf

[lowsparkco]

No, it's not the "free market" when the NAR absolutely mandates that listings include non-public unilateral offers of compensation to the buyer's agent, and forbids realtors(TM) from including anything about commissions in a buy/sell. And that is what the case is about. It has nothing to do with how sellers negotiate with listing agents.

If you want to know more, read the first few pages of the class certification order here: https://www.mow.uscourts.gov/sites/m...cv-332-741.pdf, rather than shitty news articles about it.

I predict this will hold up on appeal, even though I don't pretend to understand antitrust law, which is one of the most complicated areas of the law in the US. But I am not surprised that several large brokerage groups settled for well into nine figures, collectively.

At the same time, I am very much looking forward to a bunch of realtors(TM) opining on the finer points of this complicated area of law.

You’re getting a lot closer.

My emphasis on how we negotiate commissions intersects with your concerns about the information being private “non-public.”

Certain brokerages have in fact pushed the line on these issues hence the lawsuits.

Some managing brokers have taught brokers how to talk about commissions as not involving “price fixing” meanwhile they create an environment that encourages it. The state run commissions or boards are not consistent. Some are very proactive and others are nearly nonexistent. I don’t think we’ll see lawsuits in the states with better regulation, but only time will tell.

Thanks for posting the class certification.

[mud]

I work with a few FSBO types and we sometimes use a local RE attorney to draw up a contract for around $2K. It's not complicated law but thanks to Jethro draining the Ford in the backyard and other folks selling property that use to be landfill, it got complicated fast.

[liv2ski]

Haha, nice edit, you fucking boomer cunt

Right, I figured my grumpy middle of the night post should be amended. Good on you for catching it you pissy bitch.

[lowsparkco]

Some of you guys have an interesting read on this issue. Whatever the Listing Agent talks the Seller into? Generally the Seller says, how low is still competitive? Or, I really want to sell my house quickly - let’s incentivize the Buy side.

Each local association is different, too. I’m reading through the class action now, but my first observation is that the local association in central Oregon has an option for “fixed” compensation i.e. $5,000.00 for the Buyer’s agent. It’s an option although admittedly not used very often.

Personally I think the lawsuit is necessary because the oversight at the state level has weakened in a lot of places. They used to secret shop a lot more frequently. In essence, how a Buyer’s broker deals with “how about this FSBO?” Could land you in hot water.

A lot of these issues I’ve been fighting from within for a long time, so I’m interested to see where it goes.

I initially practiced commercial and we don’t shy away from discussing our fees. I think communication about fee arrangements is healthy. Everyone should feel good about what they’re paying and getting paid or they should look for someone else.

Don’t assume that this case in Missouri is just like your market.

[lowsparkco]

Local association is holding an emergency Zoom at 2 PM that I registered for and hopefully will be able to attend. I’ll post a synopsis of how the association I am a member sees it and plans on handing it.

[PNWbrit]

Here's the wording from the order denying the motion to dismiss in the Illinois case (that's valued at 10 times the Missouri one)

"The Court finds that Plaintiffs have sufficiently pleaded that they suffered an antitrust
injury from Defendants’ conspiracy. Each Plaintiff was a home seller required to pay a
commission to the buyer-broker for the person who purchased their home. But-for Defendants’
conspiracy, each Plaintiff would have paid “substantially lower commissions.”
Such an injury is assuredly of a type that the Sherman Act was designed to prevent."

[RootSkier]

In essence, how a Buyer’s broker deals with “how about this FSBO?” Could land you in hot water.

How do you figure the response of a buyer's agent could land them in hot water?

You will never convince me that realtors(tm) have true fiduciary duties to their clients until and unless the NAR prohibits dual agency nationwide.

[RootSkier]

Here is the class certification order in the much larger case that is being litigated in Illinois, which has a lot more detail at the front end. https://www.cohenmilstein.com/sites/...2003292023.pdf

This, from the order, is one of the most absolutely fucking insane facts I have ever seen in my fucking life:

Sections 18.2.4 and 19.12 of the MLS Rules go further and also permit buyer-brokers to select the listings that they display to consumers (i.e., display on their personal websites) based on buyer-broker commission offers.

holy FUCK I am dying over here

By contrast, other NAR rules prevent consumers from viewing the universe of buyer-broker commissionsoffered on the MLS. In particular, Sections 18.3.1 and 19.15 of the MLS Rules prohibit MLS participants from displaying buyer-broker commission offers to consumers. (2021 MLS Rules at 85, 91.) Moreover, until January 1, 2020, the Code of Ethics permitted buyer-brokers to represent to their clients that their services were free, “provided that all terms governing availability of the offered . . . service are clearly disclosed at the same time”

[esseff]

Late to the party but isn't this more about (a) making commissions more transparent/negotiable and (b) NOT forcing the seller to pay the buyers' agent compensation? This will (and nothing wrong with it) make buyers sign buyer-broker agreements and they will be responsible for comping their agent (not the seller).

Buyers always paid ALL the comp; they just didn't know it...or most didn't (i.e. seller wants $1M, need to price @ $1.050 to cover comp @ 5%. If you bought it direct or off-market, seller will sell for $1m).

[XXX-er]

I work with a few FSBO types and we sometimes use a local RE attorney to draw up a contract for around $2K. It's not complicated law but thanks to Jethro draining the Ford in the backyard and other folks selling property that use to be landfill, it got complicated fast.

i had a lawyer do my FSBO sales contract, buddy offered to do it gratus and then they would get all the usual fees and filings involving an RE sale up here, peace of mind for free

[RootSkier]

Late to the party but isn't this more about (a) making commissions more transparent/negotiable and (b) NOT forcing the seller to pay the buyers' agent compensation? This will (and nothing wrong with it) make buyers sign buyer-broker agreements and they will be responsible for comping their agent (not the seller).

More or less correct, and the result is why the defendants argued that what they were doing was fine.

[lowsparkco]

How do you figure the response of a buyer's agent could land them in hot water?

You will never convince me that realtors(tm) have true fiduciary duties to their clients until and unless the NAR prohibits dual agency nationwide.

A lot of us would be fine with eliminating dual agency. Personally, although I’ve done it, I think it’s problematic. There are ways you can do it that are less problematic, but it’s still tricky.

If a Buyer says, can you show me this FSBO and you say no, let’s look at one that’s listed by a fellow agent in the cabal, that should be a violation of agency and highly reprimanded. If you say, sure no problem, let’s discuss my fees, then you’re good.

I’ll say this, I’ve been licensed in two states, geographically very far from each other. The first had an active oversight board and responded to anonymous complaints about ethics violations, it was a much more ethical community as a result.

The argument about what you market for buyer leads on the internet is moot in my book. They’re just attempts to gain buyer leads. If you feel like someone isn’t showing you inventory that’s an issue. But, I honestly don’t see that happening. Buyers look in Zillow and think you’re incompetent if you’re not showing them those listings.

[neufox47]

Here is the class certification order in the much larger case that is being litigated in Illinois, which has a lot more detail at the front end. https://www.cohenmilstein.com/sites/...2003292023.pdf

This, from the order, is one of the most absolutely fucking insane facts I have ever seen in my fucking life:



holy FUCK I am dying over here

Jesus, how do I sign up? I can be a plaintiff in Massachusetts or California. In Mass I did a FSBO but had to pay the buyers agent.

How the fuck did dirt pumps get away with this for so long?