Zillow Plunges After Verdict on Real Estate Brokerage Commissions

[GON]

After reading the article, I could not make sense of what was happening and why. But the takeaway seems that a court found real estate brokers colluded to keep real estate commissions artificially high, and a expectation that real estate commissions may be reduced across the board. The article mentioned other countries pay measurably less in real estate commissions.

https://finance.yahoo.com/news/zillow-plunges-verdict-real-estate-183108068.html

 

[JeffKeryk]

@GON I have been able to negotiate real estate fees, but I am pretty sure they won in the end, regardless.
Beyond that, I have a great agent, and the best mortgage broker. I have found both of them honest.

 

[GON]

@GON I have been able to negotiate real estate fees, but I am pretty sure they won in the end, regardless.
Beyond that, I have a great agent, and the best mortgage broker. I have found both of them honest.

I couldn't understand the court case; the article may be implying that cullossion that was illegal was taking place in the real estate industry, and that brokers are.paying million dollar plus settlements.

My guess was only the selling broker is eligible to get paid for a sale , not the buyers agent. But I could not make sense of it.

 

[SShooterZ]

I've seen quite a bit of shady real estate activity in the midwest lately. Houses that are on the market, someone negotiates a purchase price, realtor slides in last minute and buys it themselves for slightly more than the negotiated price, with cash. They know the market is limited and are working it to the best of their advantage.

 

[Passport1]

I read that earlier from a link on Market Watch. I also was baffled by what it meant. I guess my central question is; sold two houses and bought two these last three years. Can I recoup anything from this settlement?

 

[GON]

I read that earlier from a link on Market Watch. I also was baffled by what it meant. I guess my central question is; sold two houses and bought two these last three years. Can I recoup anything from this settlement?

You likely can't,maybe a $25 gift card to Sears, but I am sure your lawyer can ring the register.

 

[cptbarkey]

My take away was that as a seller, I had no choice but to agree to the real estate agent's required fee (6%, which is ridiculous), or they wouldnt list it in MLS. That to me is, well, extremely unfair.

 

[Passport1]

I am sure your lawyer can ring the register

That's my lawyer. He's a senior partner in the firm Dewey Fleecum & Howe.

 

[SubieRubyRoo]

My take away was that as a seller, I had no choice but to agree to the real estate agent's required fee (6%, which is ridiculous), or they wouldnt list it in MLS. That to me is, well, extremely unfair.

When you think about it, a 6% fee realistically will prejudice many realtors from listing (or enthusiastically showing) lower cost houses. 6% of $1M is much more enticing than 6% of $100k.

If anything, they should be paid a set hourly rate based on the time they spend actually marketing the property on the seller’s behalf. IMO, of course

 

[Warstud]

Hardly A Plunge

 

[Drew7a]

last house I sold I used a flat fee broker, he listed the house for a flat fee if i recall correctly right about $1k and offered 2.5% to buyers agent. He provided a lock box, got me in the MLS. It was listed under him, sent me a sign but the number was my number, I was responsible for making the house available for showing and all appointment were done via an app where I approved or declined showing. He reviewed all offers and wrote counter offer.

Never met the guy in person but he was always there to answer any questions.

I would do it again.

 

[GON]

last house I sold I used a flat fee broker, he listed the house for a flat fee if i recall correctly right about $1k and offered 2.5% to buyers agent. He provided a lock box, got me in the MLS. It was listed under him, sent me a sign but the number was my number, I was responsible for making the house available for showing and all appointment were done via an app where I approved or declined showing. He reviewed all offers and wrote counter offer.

Never met the guy in person but he was always there to answer any questions.

I would do it again.

I was very happy with the selling broker on my hard to sell home 16 months ago. I gladly paid the six percent.

Seems the court ruled that even if homeowners are happy paying like you and me, something is being done that is not appropriate by the brokers and or agencies. What exactly that is I haven't heard.

 

[Donald]

I have never felt realtors earned their commission especially when houses get expensive (over $500K).

Some listing agents get the listing, put it in MLS and wait to the offers to come in.

 

[GON]

I have never felt realtors earned their commission especially when houses get expensive (over $500K).

Some listing agents get the listing, put it in MLS and wait to the offers to come in.

It may depend on the property. When we selected a selling broker on our hard to sell home 18 months ago, the selling broker without asking offered us a discount on his commission. I turned down his offer, I told him we will pay full commission. I also offered him a supplemental bonus at closing.

The selling broker did a excellent job. Lots of complications right down to the day of closing by the Buyers. I was glad to pay full fare for professional that never flinched at all the challenges the buyer had leading to and at closing.

 

[99Saturn]

https://www.axios.com/2023/10/31/nar-lawsuit-brokers-fees-verdict-sitzer-burnett

^ A bit more of an explanation/background on the arguments of the case.

 

[GON]

https://www.axios.com/2023/10/31/nar-lawsuit-brokers-fees-verdict-sitzer-burnett

^ A bit more of an explanation/background on the arguments of the case.

Thanks for posting the article. I still don't see a issue. I comprehend the commission structure on the listing triggers a hard percentage, but I am not smart enough to see a wrongdoing in it. And yes, I would expect a buyers agent to favor listings that offer higher commissions. That is real life.

 

[99Saturn]

Thanks for posting the article. I still don't see a issue. I comprehend the commission structure on the listing triggers a hard percentage, but I am not smart enough to see a wrongdoing in it. And yes, I would expect a buyers agent to favor listings that offer higher commissions. That is real life.

Is it wrongdoing or the way the world works - likely depends on how one views the transaction. I can see shades of grey, I might not be too thrilled with those shades.

Seems like the heart issue if I understand what I am reading is: buyers agents may be incentivized to push less then optimal properties on a buyer because they make more money, not because it is the best service to their buyer. Buyers are given imperfect information/may not necessarily be privy to the forces that could be driving their buyers agent's opinion and one has to be "in the club" to gain access to the database that would disclose buyer agent's commission.

My guess is the part of your quote that I bolded some folks would have a fundamental disagreement with being the "correct" way for the business model to operate/be incentivized to operate.

 

[Speedbird001]

Agree it is very expensive, but I feel you really don't have a choice. It's a big leap of faith and having a well paid professional on your side helps mitigate risk and provides invaluable insight... How often do we sell / buy a house versus a Relator who does it all the time? The one thing I didn't like was "Seller Give Backs" Money agreed to give back at closing, but Agents still get full commission based on the full selling price. But again, don't really have a choice given the risks.... 94% of [x] is still better than 100% of nothing. You don't know how much your house owns YOU until you try to sell it.

 

[Speedbird001]

Sorry, Additional rant; Closing Cost / Title Company fees are total BS.... Example, I am paying a document fee, a processing fee and a examination fee (Apparently paying hundreds for preparing a document does not include said document being reviewed )

Don't even get me started with Uncle Sam getting his share... $3,300+ in recording fees, stamps and taxes! For what? Some government worker spends 5 minutes or less updating a database is updated and maybe printing/filing a hard copy. Does that cost $3,300? Heck no, just the local gubernant getting their piece

 

[BMWTurboDzl]

I couldn't understand the court case; the article may be implying that cullossion that was illegal was taking place in the real estate industry, and that brokers are.paying million dollar plus settlements.

My guess was only the selling broker is eligible to get paid for a sale , not the buyers agent. But I could not make sense of it.

Nobody is going to pay anyone until this is fleshed out on appeal. This could be good or bad for homeowners. While other countries pay less if they choose they can be at a disadvantage dealing with the sellers agent. This is where the buyer can choose to obtain an agent for them. Every state has their own disclosure requirements and if you're not aware as a buyer you can get a bad deal.

Personally I'm not sure what to think. Commission splits are never the same percentage for all sales prices and this could really hurt small town realtors because of the typically lower sales price.