Realtors must pay home sellers $1.8 billion for inflating commissions, jury finds

[BumRushDaShow]

Source: CBS News

October 31, 2023 / 9:54 PM EDT


The National Association of Realtors and several real estate companies were ordered to pay $1.8 billion in damages after a federal jury in Missouri on Tuesday ruled that they conspired to artificially inflate brokerage commissions.

Beyond the realtors' association, defendants in the case include Keller Williams, Berkshire Hathaway's HomeService of America and two of its subsidiaries. The verdict came after a two-week trial in federal court in Kansas City.

Plaintiffs claimed the association and other defendants colluded to drive up the commission that sellers pay to brokers representing home buyers. Class members include the sellers of hundreds of thousands of homes in Missouri and parts of Illinois and Kansas between 2015 and 2012.

Michael Ketchmark, the lead attorney for the plaintiffs, told CBS MoneyWatch he expects the jury award to be tripled under U.S. antitrust law to more than $5 billion. "Today was a day of accountability — for the longest time the NAR has used its market power to get a stranglehold grip on home ownership," Ketchmark told CBS MoneyWatch.

Read more: https://www.cbsnews.com/news/realtors-liable-for-1-8-billion-for-high-commissions-jury-finds/

[not fooled]

1. About time

It's grotesque that 'Muricans have been brainwashed into thinking it's necessary to pay 6% to RE agents to sell a house.

I'm getting ready to sell a house; have to use an agent because I'm moving elsewhere while the house is on the market. Have been pondering whether to negotiate down the commission. Of course, what I'm worried about is that if it's less than 6%, agents will steer buyers away.

I've already had a couple of agents lose interest quickly when I told them the commission would be negotiable. And it's obvious that their attitude is that I'm just an annoying nuisance human attached to their commission check.

Too bad this class action wasn't nationwide.

[NJCher]

3. Yesterday

I was driving home and noticed a particular property being sold direct, without a realtor. I watch this property a lot because of its extensive gardening setup. There are about six enclosed raised beds that can be seen in the back of a 3 acre property. Can’t see the house from this road.

The signs were very plain, black on white, and gave a phone number and the address, which I recognized as being on a private road on a cliff which has a fabulous nyc skyline view. The sign also stated the acreage. I decided to drive down that road to see which house it was, as I knew it was close to another one I’d been watching from years ago.

It looks like a for sale by owner for a property that’s probably around 6-7 million, which shows that even the rich are tired of the real estate listing scam. $360,000 is no small piece of change as a real estate commission.

[TeamProg]

6. Massive collusion in the industry. Yes, if you aren't offering the full 6%

then buyers agents will steer home buyers away from your home.

Commissions for each property are hidden from view in the public MLPS unless you are a realtor.

[bucolic_frolic]

2. The idea that realtors "know their market" and can estimate price accurately is also absurd

I talked with a couple who put a high price on their home, and waited out the market. Took 2 years to sell. But I asked them, respectfully, without going into numbers did you get the extra 10% or X dollars you wanted. Yes.

"Know the market" is an estimate of recent buyers and potential buyers, other competing homes, location, recent regional price trends and industry data, and time of year. Other factors may influence the actual traffic you get. Your home may have something unique that gets overlooked in the shuffle. One seller was delighted she sold in 3 weeks. You've underpriced if you sold in 3 weeks! Another said closing was a free for all. "We forked over for a new kitchen and a roof," she said. Moral is overprice and wait if you can. Don't give them an easy flipper. You want 20% more and want them to work for it. They want 10 flippers and don't care about the extra 6% on the 20% you didn't get.

[oldsoftie]

4. There ARE discount brokers out there. And online ones too

The whole point is to get on the local MLS
Many will also give you a reduced rate if the house sells quickly or if they're the sole agent (a home run, they call it)
Ive bought & sold many homes in the past 10yrs & never paid 6%.

But I'm glad to see a case made. somewhere. This 6% crap is nationwide & how else can you explain it but collusion? Same with dentists.; funny how they ALL seem to charge the exact same price for a crown or whatever.

[twodogsbarking]

5. Never trust a realtor.

[not fooled]

9. Yep

On the home I purchased recently, the realtor (same one for buyer and seller since I had no interest in getting one to "protect my interests" since they don't) lied about at least three significant issues, including that the seller never got a final signoff permit on construction of the house and that you can't build within 150 feet of the stream on the property. I found out because before contingencies were removed I called the county and spoke with someone in Planning and Zoning who also was a permit specialist.

This realtor kept telling me how honest she was. I think the job attracts sociopaths. She also told me that she was "extremely conservative" politically. Draw your own conclusions re ethics.

Oh, and she was Keller-Williams. I suspect that these big, Wall-Street traded firms are the worst, because they have an extra layer of profit to produce, for investors.

[twodogsbarking]

10. I really just want people to be warned.

[Puppyjive]

7. The whole industry is broken

We are finally to the point where the mortgage industry has priced itself out of the market. For years, realtors have neen over inflating the price of our homes. They are making bank. I know. I have a relative who bought up so much real estate. Money seems to be no object for them. The appraisal system is broke and no one seems to challenge it. The realtors are the people who have been determining our home values. Those values are skewed. They are based on pure greed. Appraisers should not know what the realtor is valuing our homes at. We are excellent guessors. We made an offer on a house. Of course, with the realtor's recommendation. The appraisal was exactly what we guessed. Hmm.

[Firestorm49]

8. Regulations? We don't need no stinking regulations!

I know, I know, this isn’t a regulations issue (although technically it is). I could go on all day long with that famous quote, so don’t come down on me like an ill-fitting suit.

Enjoy your day.