[manaboutown]

But already the NAR and several real estate brokerages are facing another lawsuit over agent commission rules. Fresh off winning the verdict in the 2019 case, the lawyers filed a new class-action lawsuit in the U.S. District Court for the Western District of Missouri that seeks class-action status covering anyone in the U.S. who sold a home in the last five years. It names the trade association and seven brokerage companies, including Redfin Corp., Weichert Realtors and Compass Inc.

“What’s at issue nationwide is costing Americans about $60 billion in extra real estate commissions,” said Michael Ketchmark, one of the attorneys representing the plaintiffs in the lawsuits.

The focus of the lawsuits is an NAR rule that requires that home sellers offer to pay the commission for the agent representing the homebuyer when they advertise their property on a local Multiple Listings Service, where a majority of U.S. homes are listed for sale. This is in addition to also having to cover the commission for their listing agent or broker.

The NAR's rules also prohibit a buyer's agent from making home purchase offers contingent on the reduction of their commission, according to the complaint.

“Defendants’ conspiracy forces home sellers to pay a cost that, in a competitive market and were it not for defendants’ anticompetitive restraint, would be paid by the buyer,” the plaintiffs argued in the lawsuit filed Tuesday.
Plaintiffs also claim that the NAR requirement effectively keeps commissions for a homebuyer's agent artificially high.

If NAR’s “Mandatory Offer of Compensation Rule” were not in place, then homebuyers would foot the bill for their agent's commission, which would open the door for competition — and lower commissions — among agents vying to represent a homebuyer, the plaintiffs contend.

From: Real estate industry facing pushback to longstanding rules setting agent commissions on home sales

[Normal]

Just eliminate the middleman gauging routine. More and more are realizing this is the 21st Century and the internet does most of the work for the realtor. Sell on Zillow for free. It’s what The Villages and others use.

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[OrangeBlossomBaby]

If that class action ends up being legit I'll enter it. My house up north was listed on the MLS by a licensed agent of a known Broker in the area. Almost two weeks after he accepted the contract, we still didn't have a for sale sign on our front lawn. He said he'd hire a professional to come and take pictures - but he took them all with his cell phone and posted them on the listing - which showed up on the listing websites almost a week after he accepted the contract.

We had a buyer within the first few months, but after a month of going back and forth with them, we found out they were getting a VA mortgage and our home wasn't a qualifying home due to a couple of repairs needed that are on the disqualifying list. We knew this when we put the house up for sale, and the house was listed "AS IS". Our agent knew the buyer was getting a mortgage, and didn't ask what kind - so we didn't know the buyer wasn't ALLOWED to buy the house until 3 weeks before closing.

Another buyer was all set to sign but wanted a whole bunch of repairs. Even though the listing said AS IS. Our agent pushed us to do the repairs, or lower the price to accommodate the costs of repairs to the buyer. Even though - he knew that we had listed the home AS IS and had already lowered our selling price once so far.

A third buyer put a deposit down - a non-refundable deposit. Then he got a divorce, and backed out of the contract. He demanded his deposit back. Our agent urged us to just go ahead and give it back, because the buyer's lawyer would just stick us in court indefinitely and we wouldn't be allowed to sell the house while there was still a deposit on it in escrow.

So of course we trusted him, and gave the non-refundable deposit back.

Meanwhile, we were using up our life insurance money to pay the mortgage because hubby's department had been closed down a year before, and we had only my part-time minimum wage income to pay the bills.

I ended up taking better pictures of the rooms and features of the house. Hubby did cosmetic work on it. I also rewrote the listing description because our agent couldn't write a complete sentence to save his life.

So WE did most of the work. And our agent took his commission. Almost a year after we put it on the market, it sold, and we couldn't afford to live in a block and stucco or wood frame construction home as we had wanted to, because we had to reduce the price even more. That agent took over $8000 from us. But we did most of the work.

So yeah if there's a chance I can get some of that back, you bet I will.

[frayedends]

Originally Posted by OrangeBlossomBaby

If that class action ends up being legit I'll enter it. My house up north was listed on the MLS by a licensed agent of a known Broker in the area. Almost two weeks after he accepted the contract, we still didn't have a for sale sign on our front lawn. He said he'd hire a professional to come and take pictures - but he took them all with his cell phone and posted them on the listing - which showed up on the listing websites almost a week after he accepted the contract.

We had a buyer within the first few months, but after a month of going back and forth with them, we found out they were getting a VA mortgage and our home wasn't a qualifying home due to a couple of repairs needed that are on the disqualifying list. We knew this when we put the house up for sale, and the house was listed "AS IS". Our agent knew the buyer was getting a mortgage, and didn't ask what kind - so we didn't know the buyer wasn't ALLOWED to buy the house until 3 weeks before closing.

Another buyer was all set to sign but wanted a whole bunch of repairs. Even though the listing said AS IS. Our agent pushed us to do the repairs, or lower the price to accommodate the costs of repairs to the buyer. Even though - he knew that we had listed the home AS IS and had already lowered our selling price once so far.

A third buyer put a deposit down - a non-refundable deposit. Then he got a divorce, and backed out of the contract. He demanded his deposit back. Our agent urged us to just go ahead and give it back, because the buyer's lawyer would just stick us in court indefinitely and we wouldn't be allowed to sell the house while there was still a deposit on it in escrow.

So of course we trusted him, and gave the non-refundable deposit back.

Meanwhile, we were using up our life insurance money to pay the mortgage because hubby's department had been closed down a year before, and we had only my part-time minimum wage income to pay the bills.

I ended up taking better pictures of the rooms and features of the house. Hubby did cosmetic work on it. I also rewrote the listing description because our agent couldn't write a complete sentence to save his life.

So WE did most of the work. And our agent took his commission. Almost a year after we put it on the market, it sold, and we couldn't afford to live in a block and stucco or wood frame construction home as we had wanted to, because we had to reduce the price even more. That agent took over $8000 from us. But we did most of the work.

So yeah if there's a chance I can get some of that back, you bet I will.

First sorry you had such a crappy listing agent. But nothing you mentioned has to do with buyers agents and commissions.

But I will mention that my realtor also often has to explain the VA or FHA restrictions. She’s had sellers agents that didn’t even know the mortgage limits are different depending on the area. But that’s why she’s a top agent and many agents don’t do well at all.

Regarding the lawsuit and competition, it’s true that there may be more competition if buyers pay their agent directly. But the fact it hasn’t been done that way doesn’t make it fraudulent. I don’t see how people would have financial recourse for something they signed in the contract. The only financial recourse I could see is if a buyers agent stated there was no cost to the seller for his commission. That wouldn’t be entirely accurate.

[BrianL99]

Originally Posted by margaretmattson

A buyer DOES NOT have a contract with an agent. Without a contract, an agent DOES NOT represent the buyer. He is merely giving advice. A buyer, at anytime, can choose to buy by dealing ONLY with the listing agent or use any agent he chooses to assist him in the deal. He is never tied to one agent.

A seller on the other hand has a contract with an agent. They negotiate a commission and the funds for paying the stated commission are TAKEN OUT OF THE SELLER'S PROFIT.

A buyer could care less if an agent gets paid. He is not legally bound to pay an agent.THE SELLER IS! Therefore, all real estate agents represent the seller.

Originally Posted by PjLyness1965

Please stop posting. You’re clueless about how real estate transactions work.

Being completely and utterly clueless, doesn't seem to stop folks who have a need to keep their fingers busy at a keyboard or a need to publicize their ignorance. There's always the "Block Poster" option available. I've found it to be a vital tool for tolerance on this board. Particularly regarding certain clueless posters, who don't seem daunted by constant reprimands and suspensions by the Moderators.

[BrianL99]

Originally Posted by Dusty_Star

You could modify this to contain 'in Florida'. In other states buyers can indeed sign a contract with a buyers agent. Another poster repeatedly kept mentioning Massachusetts & they are not wrong.

Originally Posted by margaretmattson

I hope the practice of a buyers agent is banned in all states. If banned, this will save sellers quite a bit of money by not having to pay high commissions.

Yeah, let's ban Buyer's Brokers, because no one needs them. Who cares that AARP, the Consumer Federation of America, Money Magazine and the Federal Trade Commission, all advocate the use of a Buyer's Broker.


Florida’s Dirty Little Secret: Transactional Brokerage Leaves Consumers as Clueless as Ever

"Ralph Nader, the AARP, the Consumer Federation of America, the Federal Trade Commission, Money magazine and other media advocated that buyers should seek out and work with buyer’s brokers to assure that their interests were truly represented."

[Randall55]

Originally Posted by BrianL99

Yeah, let's ban Buyer's Brokers, because no one needs them. Who cares that AARP, the Consumer Federation of America, Money Magazine and the Federal Trade Commission, all advocate the use of a Buyer's Broker.


Florida’s Dirty Little Secret: Transactional Brokerage Leaves Consumers as Clueless as Ever

"Ralph Nader, the AARP, the Consumer Federation of America, the Federal Trade Commission, Money magazine and other media advocated that buyers should seek out and work with buyer’s brokers to assure that their interests were truly represented."

In SOME STATES that may be true. In Florida, no. A buyers agent here is not held accountable for a thing because there is no contract with the buyer. If a buyers agent can say and do as HE PLEASES without any recourse, how is the buyer being represented fairly?

A seller HIRES an agent to sell his home. They discuss a price that covers the commission and then signs a contract. In the end, the commission is paid through the seller's funds.

A buyer is not involved in commissions with an agent. The buyer agrees to a purchase price. That is his only commitment.

Since the seller hired the agent and is the only person responsible for paying commissions, it can be rationalized that all agents represent the sellers. Until the SELLER accepts an offer, an agent(s) does not get paid.

[billsr]

Originally Posted by margaretmattson

Thank you. CAN and COULD is a choice. It does not mean a buyer MUST

I think some of your confusion stems from the fact that you do not understand buyer-broker agreements. I have been using them since the late 1970's. I call mine Right-to-Locate Agreements. The buyer and I agree, in writing, on what we are searching for and a commission amount to be paid by the buyer.

If I receive part of the Seller/Seller Agent's commission than I must subtract that from what the buyer owes

and yes I do rep the buyer with that agreement and I make it very clear to the Seller/Seller's Agent from the very first contact. I also receive a retainer when the R-T-L Agreement is signed. I have an abundance of repeat business and all of my repeat buyer clients require the R-T-L. I am very good at what I do and very knowledgeable so I have no need to search for buyer clients. I, also, get a lot of referrals. I have a reputation for resolving difficult and "impossible" transactions.and accomplishing more than my clients expect. Most of my buyers recognize this and are eager to sign a contract and pay the retainer so that I can rep them.

[billsr]

I would also like to add something. This Class Action suit covers an area that includes about 30,000 Realtors. If the judge OK's the request for treble damages then it would be approximately $5.4 billion. If my math is correct that would be $180,000 per agent. How do they expect to collect this? At best every agent would refuse to pay and quit and the real estate industry would collapse. NAR is a trade organization. The attorneys would have to chase all 30,000 agents individually. Please explain to me again... who gains from this other than the Class Action attorneys. Also, remember that the taxpayers are paying for this trial.

[Randall55]

Originally Posted by billsr

I think some of your confusion stems from the fact that you do not understand buyer-broker agreements. I have been using them since the late 1970's. I call mine Right-to-Locate Agreements. The buyer and I agree, in writing, on what we are searching for and a commission amount to be paid by the buyer.

If I receive part of the Seller/Seller Agent's commission than I must subtract that from what the buyer owes

and yes I do rep the buyer with that agreement and I make it very clear to the Seller/Seller's Agent from the very first contact. I also receive a retainer when the R-T-L Agreement is signed. I have an abundance of repeat business and all of my repeat buyer clients require the R-T-L. I am very good at what I do and very knowledgeable so I have no need to search for buyer clients. I, also, get a lot of referrals. I have a reputation for resolving difficult and "impossible" transactions.and accomplishing more than my clients expect. Most of my buyers recognize this and are eager to sign a contract and pay the retainer so that I can rep them.

Do you work as an agent in Florida? I am a contractor who has bought and sold homes throughout Florida. I have never come across a buyer who had a contract with his buyers agent. When selling my remodeled homes, I was responsible for paying ALL of the commissions.

A buyer in Florida does not NEED to use a buyers agent. It is a choice. A buyer can deal with the listing agent direct, or use the help of a knowledgeable friend or relative, hire a home inspector to look at the home before signing the contract, get an attorney to close the deal, etc.

The buyer DOES NOT have to rely on an outside agent who is a stranger to him. He can ask for help from anyone he is comfortable with to get fair representation. If he chooses to use an outside agent, aka buyers agent, the SELLER pays the buyers agent commission. The buyer IS NOT responsible for those fees.

I suspect once the rules are changed in the real estate profession due to this lawsuit, a Know Your Rights fact sheet will have to be given to every buyer. Most buyers are unaware that they DO NOT HAVE to use a buyers agent to represent them.

Real Estate agents chiming in on this thread trying to convince readers a buyers agent is necessary is alarming to me. I have not read the lawsuit, but I believe this practice should be stopped. Brokers and agents insisting that a buyer cannot close a deal without a buyers agent is part of the reason commissions are highly inflated.

[Randall55]

Originally Posted by BrianL99

Being completely and utterly clueless, doesn't seem to stop folks who have a need to keep their fingers busy at a keyboard or a need to publicize their ignorance. There's always the "Block Poster" option available. I've found it to be a vital tool for tolerance on this board. Particularly regarding certain clueless posters, who don't seem daunted by constant reprimands and suspensions by the Moderators.

Clueless is in the eyes of the beholder. I suppose you believe a buyers agent is necessary. Your belief doesn't make it a fact. I have closed real estate deals with MANY intelligent adults who did not need a buyer's agent holding their hand throughout the process.

Curious question. How do you know a poster has gotten reprimands or suspensions from a moderator? Are you a moderator? Are you personal friends with a moderator? It seems the post you have made is direct insults to another poster. Strange that it has not been deleted by a moderator.

[billsr]

Realtor status has nothing to do with obtaining a license. The NAR is a trade organization not a state licensing organization. It is like the AMA for doctors or the Bar Association for attorneys. You can be licensed by the state and not belong to the NAR. You cannot use the designation "Realtor" unless you belong to NAR (joining after you get your license).

[Normal]

Originally Posted by billsr

Realtor status has nothing to do with obtaining a license. The NAR is a trade organization not a state licensing organization. It is like the AMA for doctors or the Bar Association for attorneys. You can be licensed by the state and not belong to the NAR. You cannot use the designation "Realtor" unless you belong to NAR (joining after you get your license).

Yes, if you are a designated certified “realtor” then you are now considered a registered crook. The term is a bit disparaging, kind of like a “landlord”.

[frayedends]

Just found out from a prominent villages real estate agent (MLS) that there can indeed be a contract for a buyers agent in Florida (though she rarely uses one). Also the agent can act as a transactional agent representing both buyer and seller. But that can get tricky if issues arise. Her video is on YouTube. Her name is Robyn Cavallaro. The video title mentions what buyers agent can do. She basically confirmed everything I’ve said in this thread.

[Randall55]

Originally Posted by frayedends

Just found out from a prominent villages real estate agent (MLS) that there can indeed be a contract for a buyers agent in Florida (though she rarely uses one). Also the agent can act as a transactional agent representing both buyer and seller. But that can get tricky if issues arise. Her video is on YouTube. Her name is Robyn Cavallaro. The video title mentions what buyers agent can do. She basically confirmed everything I’ve said in this thread.

You must have misunderstood her. A dual agency in Florida is prohibited. Read the Florida real estate law. No one on this thread stated a buyer could not have a contract in Florida with an agent. We all stated it is a choice. You DO NOT have to use a buyers agent to close a real estate transaction.

Yes, most buyers agents in Florida do not use contracts. The reason? The buyer would have to pay the purchase price of the home PLUS A FEE to the buyers agent.

A buyers agent does not get paid until the SELLER accepts an offer. The buyers agent then receives his commission through the SELLERS FUNDS. This is the reason for the lawsuit. It causes inflated commissions for THE SELLER.

Once real estate laws change due to this lawsuit, a buyer will HAVE to pay his agent out of his pocket. I highly doubt a buyer is going to pay his buyers agent an additional $12,500 on top of the purchase of a $500,000 home. They will deal direct with the listing agent where they will have no additional cost. See? Inflated commissions gone!