This could bankrupt NAR. There are 1,000 millions in a billion.
“The jury award will be automatically tripled under U.S. antitrust law to more than $5.3 billion”
This will be a full-court press appeal and will take a long time to complete.
In the meantime, take a look at how you are marketing direct to consumers. There will likely be a thinning of the REA herd.
The story is behind a paywall. Do you have another source for it?
This is going to be more of a nightmare for sellers in the long run.
A few links here: Jury Finds Realtors Conspired to Keep Commissions High - Google Search
Here is the NAR propaganda for their response. According to them they have the $1.8B covered if they can’t reduce it.
IMO it is about time this was done. Real Estate Salesperson/Brokerage services are nothing more than a commodity now since all is “Same Same”. This can shake up the industry and actually force them to be competitive and possibly do right by the consumer on both sides of the sale.
Real Estate groups on social media etc. saying no biggie, which may be true in short term.
Long term impacts?
I have an honest question on this for long-term impacts. I’m still trying to figure out all the dynamics involved in the RE world… it’s complex that’s for sure!!
But my question is… if, hypothetically, NAR fades and eventually disappears or is left as a trainwreck of its former self… what does that truly mean for the industry? Who wins and who loses?
From my relatively uneducated guess, this could likely lead to a very fractured real estate industry with a ton of regional associations popping up to scramble and replace some of what NAR offered.
How do Home Inspectors make out? Relatively unaffected, better off, or worse?
Would appreciate any insights you have to share.
About time…I have wondered Why “Realtors” were “seemingly exempt” from laws against Price Fixing. I’m talking about the Industry Wide Understanding that there will be a 6% Commision Shared across the Agents and Brokers in All transactions handled by the Monopoly known as The National Association of Realtors.
As far as I know, no other industry has been able to conspire to set prices for so many decades.
Disagree. The lawsuit (and others to follow) is about how the N.A.R. has conspired to keep buyer agent commissions high in the age of the Internet where most buyers can find their own dream home themselves surfing Zillow or RedFin. What the sellers (plaintiffs) want is lower overall commissions. N.A.R. is fighting this, of course. However, the plaintiffs have already scored some wins (they have a legit beef) and the big real estate companies are already taking stock price hits which makes me think they are eventually going to lose.
I think that sellers will win long term because their real estate commissions will likely be coming down. It will be the buyers and buyer agents that will feel the squeeze. Either the buyer agents will have to deal with lower (or zero) shared commissions coming from the listing agent and/or need to charge the buyer directly for their services (perhaps added to the sales price of the house they buy).
How will that affect home inspectors? Hopefully, not much. We provide a valuable service. However, we have to face the simple fact that it is the buyer’s agent that is currently the prime business driver of the home inspection industry. And, if more buyers in the future start buying houses without an agent (to avoid the commission), then there will be fewer and less-motivated buyer agents to recommend their client get that vitally-important home inspection.
And the mortgage companies where not aware?
I agree that forced lowered commissions will eventually help the sellers’ bottom line, but there will be a cause and effect that come with it.
The issues I see with this ruling is that sellers were never “forced” into paying inflated commissions. They agree to the percentage that is the standard norm within the industry. The “conspiring” to set a particular a percentage is common in many industries. Sellers also have the right to negotiate their commissions with the brokers in for any listing. So the 6%, as it is today, is not mandated by any association or association. It’s just a % norm that has been used for many years.
Sellers have the option to go with various options in selling their properties. No law, that I’m familiar with, requires that a seller has to sell their property through a RE broker. There are multiple “buy owner” online services to choose from at lower cost to them. Why not choose those services instead of claiming that 6% is over inflated that they were “forced” to go with?
If somehow the “buyer agent” commission/fees are taken away or even thought that the buyer is going to pay them, there will little to no incentive for a agent to assist a buyer in a purchase of a home. Thus, less activity and showings for the list agent making it more difficult for the seller to have better exposure on the property with buyer agents willing to show to their clients.
IMO, nothing is going to change for a while. The NAR has enough funds to appeal this and they should. I doubt very seriously that the jury verdict will be upheld.
If an owner/seller did negotiate a lower %, then the buyer’s agents would avoid presenting the lower % listing to their buyer because, well, it was a lower commission for them. Hence, a problem for the sellers.
I’ve seen it and heard it talked about and experienced it personally. It happens more than the NAR and other associations wants to admit.
Full disclosure: My bride isn’t a house salesperson.
My bride is, for over 20 years now… The commission rate stated by the listing agent is what she works with. If it is lower than the norm, she has never refused to show her buyer the property as long as her buyer is not having to pay for it.
Interesting that the vast majority of the listing agents ask their clients what they need/want to net after closing. “Want” and “need” always vary by thousands of dollars. A good listing agent always weighs the two and builds in the commission as to reach their goal to satisfy both. Never has been an issue and no complaints ever from her clients. Funny how a few want to change everything. Sort like gun control…eh Larry?
I thought we were talking real estate sales commissions, eh Tom?