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NAR asks to settle ANOTHER lawsuit


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2024 Mar 18, 6:19pm   492 views  16 comments

by AmericanKulak   ➕follow (7)   💰tip   ignore  

This one for $418M to home sellers and the promise to abandon practices that led to billions in agent commissions over the next years.

The National Association of Realtors has agreed to pay $418 million in damages to settle the real estate commission lawsuits. The trade group has also agreed to abolish the “Participation Rule” that required sell-side agents to make an offer of compensation to buyer brokers.

Taken together, the settlement and multiple rule changes will reshape how millions of sellers and buyers transact, and how their representatives get paid.

Some analysts and experts say the changes could wipe out billions in agent commissions in the coming years while accelerating a decline in the number of working real estate agents.

https://www.housingwire.com/articles/nar-settles-commission-lawsuits-for-418-million/

This is on top of the Massive Loss in a Missouri Lawsuit

A U.S. jury on Tuesday found the National Association of Realtors and some residential brokerages, including units of Warren Buffett’s Berkshire Hathaway
, liable to pay $1.78 billion in damages for conspiring to artificially inflate commissions for home sales.

The verdict by a federal jury in Kansas City, Missouri, could upend decades-old practices that have allowed real estate agents to boost commissions as home prices and mortgage rates rise, hurting consumers by making housing transactions more expensive.

Plaintiffs in the class action included sellers of more than 260,000 homes in Missouri, Kansas and Illinois between 2015 and 2022, who objected to the commissions they were obligated to pay buyers’ brokers.

The verdict followed a two-week trial, and the damages award can be tripled under U.S. antitrust law to more than $5.3 billion.

https://www.cnbc.com/2023/10/31/missouri-jury-hits-realtors-real-estate-companies-with-1point8-billion-in-damages.html

This isn't CA, or NY, or IL, just Missouri.

Comments 1 - 16 of 16        Search these comments

1   HeadSet   2024 Mar 18, 7:20pm  

I wonder what the new system will look like. No more multiple listing? A buyer now has to pay an agent to take him around and show houses? Or the listing agent does 100% of the showings? Maybe everything becomes "For Sale by Owner" with a paid advocate once a buyer responds to a seller's ad.
2   GNL   2024 Mar 18, 8:23pm  

What's the new law say? I think the buyer's agent's fee can still be rolled into the loan somehow. There's a work around from what I'm hearing.
3   PeopleUnited   2024 Mar 19, 5:30am  

There is no new law. But rest assured the cartel is working on new ways to continue its parasitic control over the real estate market. The settlements didn’t change the law, which means the cartels are still in control.

The globalists want is to be distracted by all this real and imagined conflict so that we don’t unite against their goals to reduce the world’s population to around 500,000,000 any take away all rights of self determination from everyone who survives the purge but themselves.
6   GNL   2024 Mar 27, 1:33pm  

They'll still make thier money.
7   HeadSet   2024 Mar 27, 5:58pm  

zzyzzx says





Simplistic. The realtor is paid for bringing in a buyer, and uses a well-established network and database to do so. Otherwise, why not just put a sign in your yard, put an ad on Facebook marketplace, and show the house yourself?
9   zzyzzx   2024 Apr 23, 10:01am  

HeadSet says

The realtor is paid for bringing in a buyer,


Nope! The buyers finds a listing online and asks to see it.
10   HeadSet   2024 Apr 23, 12:51pm  

zzyzzx says

HeadSet says


The realtor is paid for bringing in a buyer,


Nope! The buyers finds a listing online and asks to see it.

I am missing your point. Who put the listing online?

My point is - the job of a Realtor is to find a buyer. If you can find a buyer on your own, you do not need a Realtor.
11   richwicks   2024 Apr 23, 12:53pm  

HeadSet says

Otherwise, why not just put a sign in your yard, put an ad on Facebook marketplace, and show the house yourself

Yes, why not?
13   zzyzzx   2024 Jun 27, 10:32am  

https://www.housingwire.com/articles/nearly-80-of-brokerages-wont-be-profitable-with-lower-agent-commissions-accounttech/

Nearly 80% of brokerages won’t be profitable with lower agent commissions

If real estate brokerages fail to make changes to their operations, 79% of them will be unprofitable if the terms of the National Association of Realtors’ (NAR) nationwide commission lawsuit settlement agreement lead to typical agent commissions dropping to 2%. This is according to a study published Tuesday by AccountTECH.

The study analyzed the operations of 100 randomly selected brokerages with agent counts ranging between five and 5,000.

According to the report, the study calculated the future net profit for brokerages while assuming that sales volume, company overhead and agent split percentages remain at current levels. It found that even a minor decrease in the commission rates charged to sellers made the companies in the study unprofitable.

AccountTECH noted that it is unclear if any of the assumptions it based its forecast on are reasonable in the near term. The firm noted that the industry is already seeing broker-owners altering commission split programs and operating expense structures in response to the potential for lower agent commissions.

“The industry is well aware that going forward, the market changes are going to make their current business models untenable,” the report states.

While nearly 80% of firms would be unprofitable if commissions dropped to 2%, the study found that 60% would be unprofitable if commissions dropped to 2.5%.

Additionally, the study also looked at how agent count and physical office count impacts future profitability. It found that among the companies with three storefronts, only 14% would remain profitable if commission rates drop to 2% per side. When it comes to agent count, the study found that for firms with 100 to 5,000 agents, 88% will be unprofitable if the average agent commission drops to 2%.

If brokerages hope to break even, AccountTECH found that if commission rates drop to 2%, more than 75% of the firms analyzed will need to increase their income or cut expenses for every agent in their firm by $2,908, or a total of $290,800 per year for a 100-agent firm.

These challenges come as brokerage gross profit margins have fallen to a nationwide median of 15%. This is due to a variety of factors, including increased pressure on brokers to provide agents with a larger split of the commission.

Additionally, rising labor and occupancy expenses have driven up operating costs, putting even more pressure on firms’ top-line revenue.
14   GNL   2024 Jun 27, 11:24am  

I wouldn't be surprised at all if the average commission % is already, and has been, 2.5% per side. I don't claim to know all of the ins and outs but, it looks like...
1. buyer's agents will be working for waaaaaaaaaay less per transaction
or
2. Yes, seller agents will put extreme pressure on sellers to pay the buyer agent.
3. Buyer agents will have signed contracts that stipulate they be paid a fee by the buyer (who enforces payment at the closing
table?) or the seller whichever fee is HIGHER.
4. Will buyers be forced to fund an escrow account?
15   DemocratsAreTotallyFucked   2024 Jun 27, 12:00pm  

zzyzzx says

Nearly 80% of brokerages won’t be profitable with lower agent commissions



16   HeadSet   2024 Jun 30, 8:47pm  

GNL says

I wouldn't be surprised at all if the average commission % is already, and has been, 2.5% per side.

That seems to be what happened in Omaha area. The listing commission went down from 6% to 5%.

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