The real estate brokerage industry is in for a massive real estate disruption.
A class action lawsuit against the National Association of Realtors (NAR) and a handful of branded brokerages (soon, perhaps against all brokerages) came to completion last week. The jury decided in favor of the plaintiffs and awarded them a $1.8 billion verdict. Billions more could be on the line.
As a matter of fact, the damages may exceed $5 billion. This could be the largest real estate disruption of all time.
You can google “Sitzer/Burnett class action lawsuit” and find all you need (Regular readers should be interested and click around the web).
Some Details of this Potential Real Estate Disruption
Axios, an independent media concern, broke down the details best:
* At the heart of the lawsuit is broker commissions, or the fees paid by home sellers to brokers for executing transactions or providing other services – like schedule property showings — which are generally factored into the listing price of a home.
* Specifically at issue is the seller’s fee payments to the buyer’s Realtor, which are in part governed by the NAR’s Clear Cooperation Rule.
* The rule requires sellers to include a fee offer to the buyer’s agent when listing a home. The fee offer is visible to the buyer’s agent, but prospective buyer usually do not get access to them.
* Real estate agents generally must become members of the NAR, one of the largest trade associations in the U.S., to gain access to most local real estate databases.
This could be a massive real estate disruption to the brokerage industry. But, there will be appeals that may tie things up for a while.
Already, experts inside and on the fringes are chiming in on how this will benefit home sellers. However, there are a lot details to work through.
It’s important you’re informed as home selling and buying is one of the most expensive transactions in our lives.
For now, it’s business as usual. But stay tuned to updates as they happen – I’ll share what I learn from this point forward. This is the hottest topic in real estate today and the story will unfold fast.
My Thoughts:
- I embrace change. I look forward to change that is better for, and helps, consumers. And you bet I’ll be adapting my business so that my customers get the best service possible… and the best value, too.
- Commission rates have always been negotiable. There is no industry standard for what a listing commission rate is, or should be. With this new real estate disruption, we will see how it will affect home buyers as they may not get representation – unless buyers pay for it to their buyer agent. I’ve already heard of a dozen or more ideas how commissions could be paid in the future… an what representation looks like. Again, the consumer makes the decision on what they want, at what price.
- Many folks have been waiting for a real estate disruption like this for decades. As a real estate agent/broker for 25+ years, I know we have not done our jobs at a higher standard… but those who remain, will.
[today’s photo: on my daily 6:45am beach walk at South End Delray Beach next to Seagate Beach Club – I’m there M-F at that time so wake up and come walk with me…]
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*** Watch or Read why this month, November, is the PERFECT month to sell your home.
*** November is about SELLING your home. This link gets you to my guide on staging it.
*** Or go here so I can help you determine your home’s value.
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*** Inventory is Rising FAST – UP 28% in 102 days! ***
* Last week there were 34,219 available…
*** This morning’s Inventory is 35,094! ***
That’s an INCREASE of 875 Units in One Week!
OR… up 2,889 in 3 weeks!* 4 yA Real Estate Disruption For The Ages
