$1.8 Billion verdict (possibly $5.4 Billion) may break the real estate industry

It seems really weird to pursue this after the fact. Seems like a bad judgement to me. It seems like bad economics too. Just b/c it comes out of the sellers profit, does not mean they pay all of it. That's like saying oil companies (or consumers) pay 100% of the gasoline tax. Who pays the sales tax? Safeway? They send in the check. It is shared & how it is shared depends on supply & demand elasticities.

We just bought a property & we used a buying agent. That dude was great & deserved every penny of his 3%.

 

I think the crux is it’s akin to price fixing, the NAR essentially has fixed the playing field by pretty much setting this commission rate. Since almost all the agents are part of it you almost can’t find an agent who will go less than 2.5% on each side.

Having bought and sold numerous properties over the years with or without an agent (on the buyers side), never had one as the seller, I’ve not really felt that any of them did anything special to warrant the commission.

The last property I sold the buyers and an agent (annoying ass) who was trying to beat me up on price, the difference was about 1%, so I told him take a 2% buyers commission and it’s a deal. He refused to consider it until I reminded him he had to bring every counter to his buyers, needless to say he dropped his commission. It was either that or there wasn’t a deal.


Certainly there are people who need the hand holding but in most cases the sale is not complicated for those with half a brain.
I think part of the draw for people with buyers agents is the feel pampered being taken around.
Obviously if you’re in the situation of moving to a new area there may be some benefits.

 

For years I've been wondering what magic powers the NAR must yield as no one has successfully brought a low cost e-solutuon to this mildly complicated, simply navigated transaction.

Modern tech architecture could all but eliminate the realtor industry as we know it, drastically reducing fees and more impactfully, home values.

I saw this judgement weeks ago and immediately thought, "there's the window of opportunity!"

 

I used a buyer's agent, and it was a huge help for me. It was my first home purchase, and I was working a (more than) full-time job. Having somebody who knows the process, can take care of a lot of the little things, and recommend people to work with (mortgage companies, home inspectors, contractors, etc.) saved me a lot of time I didn't have.

 

Well if you sign with an agent that’s your choice, just like if the buyer signs with an agent, that’s their choice.
Typically it’s 5-6% and split if the buyer has agent if the buyer doesn’t the seller agent gets the whole nut.
The last house I bought a friend who is an agent offered to act as my buyer agent and then kicked a big part back to me as they did nothing more than send the contract offer(they still got 1%).

I think if you need or chose to use a buyer agent then that’s your choice, and you should pay them. No different if you used an attorney to draw up the paperwork for purchase. Often buyer may be scared and need their hands held, not sure why that’s the sellers duty to pay for their comfort/representation.

 

You could use your line of logic with most anti-trust cases though.

 

I get that, but that’s where I think that you should have paid for their services and they sound like they earned it.

Seems like the system is set up that a 5-6% commission is the only choice(collusion). Bet that seller agent isn’t cutting their cut if the buyer is sans agent.

Over the years I’ve bought 5 homes(once used a pseudo buyers agent), sold 5 homes(1 we used a family member to list as it was an inherited piece and I didn’t want to be the main guy dealing with the deal if it went south(in laws involved)). Of the other 4 sales, 2 were sans agents (not an issue) and 2 the buyer had an agent 1 was easy the other the buyers agent almost blew up the deal trying to be a wise guy.
Maybe I was lucky but I still don’t feel like I missed out not having their expertise.

Like I said for some people it’s helpful but it’s almost like your forced to pay the commission somehow if your dealing with an argent.

 

In DeLand the realtors collude to split 7 percent commission. I think that is excessive but everytime I have bought a house I was able to get the realtors to give up a couple of points to close the deal.

 

When we moved to CA a decade ago, and were searching for a home, I recall one instance when a seller's agent told my wife and I that our agent wouldn't get a commission. Okay, I can understand on some level, but he was an arrogant jerk about it. Wife and I walked out since there were so many houses to choose from and we didn't do any deal with jerks.

 

Agents can be flexible as we have learned. In the late 90's when Trucker and I were having our post retirement crazy adventure driving an 18 wheeler for about a year, we were contacted by a realtor who told us he had a client who was interested in a house like ours. It was a large 5 bedroom southern colonial in Dunwoody, an Atlanta suburb, with a pool on a cul d' sac. A few days later we received a call from a couple living in our neighborhood on one of the busier roads who were looking to stay in the neighborhood but wanted a larger house with a pool. Then to top off the series of coincidences we received a call from the agent we used when we had puchased our home 14 years earlier when we moved south from Connecticut. She said she had a client who might be interested; were we interested in selling.

We were interested in selling. Our oldest was married, had finished med school, and was doing his surgical residency in Ohio. Middle daughter was working in Texas after graduating from Baylor, and younger son was a senior at Baylor. Our house was essentially vacant and we were ready to down size and move to Gainesville as it turned out.

The 3 inquiries all came within a 2 week period. Trucker and I took it as a sign that it was time for us to sell the house and move. I replied to all interested parties and agents the house was in need of work and was not in tip top condition to show, but we would entertain serious offers. The agent brought his clients around the next day to view the house. We received an offer from them 2 days later. The neighborhood couple did not have an agent but requested a showing saying they would prefer to make a private no agent deal.

I told the first agent we had no idea how much our home was worth and would like to have an appraiser inspect it and assign a value so we would know what was fair. While that process was in the works I personally escorted the couple from our neighborhood through our home. It was an uncomfortable process, especially when I had to listen to their comments about what they would do to the house when they owned it. I immediately eliminated them as potential buyers.

The appraisal came back a little higher than what the realtor's clients had offered. As we wanted to walk away from the house with a certain sum we countered their offer with one approximately 10 or 15 thousand more than we had been offered. Their agent balked saying he did not know if they were prepared to increase their offer. I countered since he was the only agent involved in the sale he could either persuade his clients to raise their offer or he could reduce his percentage cut from the sale. It was the standard 6% on the contract he had with his buyers. He said he would do what he could and a day later he returned with an offer from his buyers that met our counter to the penny and he received his full 6%.

Right after the offer was accepted and signed our former agent called to say her client was no longer interested having found another house he liked. When I told her we had made a deal and would be selling and moving within a month she had the outrageous audacity to ask for half of the 6% commission going to the buyer's agent. For doing absolutely nothing. I told her 'no' - take it up with the buyer's agent.

We recently learned our former home on the 12th fairway of the Gainesville Country Club is for sale. The couple who bought it from us was from Miami and have it listed for sale with a Miami real estate agency. This I do not understand. They made a number of improvements to our old house but some are trendy or poorly planned or thought out in my mind. for instance they opened the wall between the kitchen and the laundry room and now the washing machine and dryer are in the kitchen. If we had stayed in our house we were going to expand our master bedroom and bath area and include the laundry in that area.

They started out asking $625,000 in June and have dropped the asking price to $580,000. I think they will have trouble selling it with the failed golf course in the back yard and a selling agent hundreds of miles away.

 

The markets in Gainesville have slowed a bit, but still remain strong. The country club still gets fairly good value even though they've had issues with the golf course, since Meadow Brook and West End golf course have shut down. Plus, most of those homes are extremely outdated and need renovating. As long as they keep their price in the range of $225 to $275 per sqft they'll most likely sell it since new homes are well over $300 a ft or with, the high HOA's

 

RE agents are some of the most overpaid people out there. the effort or knowledge required to do the job did not increase with the rapid rise in real estate values yet the pay did

 

When we sold our previous house, (by owner) we negotiated the commission down by offering to hire their buying agent as our own for our subsequent search.

She cut her commission in half in exchange for us hiring her. She was great on both ends and became a personal friend in the process.

 

Well done.
GK would have had great input on this.

 

....hmmmm.... I wonder if this judgment has anything to do with this...

$1.7 B Short

(Perhaps introductions are in order...(ie going to post cross link in both threads).