They wait until the week that the trial starts? She should have said ‘regularly defraud MORE clients’.
The National Association of Realtors laid out a doomsday scenario for the industry in the case home sellers prevail in two landmark antitrust cases.
The group warned that a ruling in the plaintiff’s favor could render buyer’s agents unaffordable, block equal access to listings and restrict buyer choice, NAR’s general counsel Lesley Muchow said. The trade group held the online webinar five days before Sitzer/Burnett, the first of the two closely watched suits, is slated to start trial in Kansas City.
“This would be bad news for consumers,” Muchow said. She added that if NAR isn’t allowed to continue with some of its practices, “we would be forced back into the 19th Century or what we see as the Wild West, where unscrupulous people could regularly defraud clients.”
Muchow argued that if the lawsuits’ results upset local MLS systems, buyers would have fewer homes to choose from and sellers would lose exposure to their properties.
“Buyers would have to visit every single broker in town in order to see all of the available inventory that is out there for them,” Muchow said.
This scenario would likely lead to outdated and inaccurate listing information, she said, and would cost brokers more money if they have to pay to feature their listings on third-party platforms.
Jury selection will begin on Friday.
Both of the landmark lawsuits center on NAR’s “participation rule,” which critics claim violates antitrust laws by inflating commissions charged to home sellers.
The rule’s interpretation was largely understood as requiring listing brokers to offer compensation to buyer’s agents, but a spokesperson for NAR said that it only “requires participants to communicate an offer of compensation to other MLS participants and that offer can be any amount, including $0.”
PLEASE DO NOT CONTACT ME FOR OPEN HOUSES. Title and Escrow to be seller’s choice. Deposit to be in escrow within 48 hours of acceptance and seller has the right to cancel without providing a notice to perform, if the deposit isn’t received by escrow within 48hrs.
**NO MORE SHOWINGS, MULTIPLE OFFERS OVER ASKING PRICE IN HAND**
For offers full price and above, seller is offering a full commission of 3%
Offers do by Wednesday 5pm
Views are not guaranteed and can be abstracted at any time.
24 HOUR NOTICE FOR QUALIFIED BUYERS ONLY! DO NOT WALK PROPERTY, PLEASE! SKIDDISH TENANTS.
Seller is not open to making repairs or offering buyers a credit for repairs.
Paint is fire proof
Please, no blind offers. Please do not call to ask if I have offers, email your highest and best.
Please do not submit any narratives or photos of your buyers regardless of how cute they may be- only the actual offer will be submitted. The super cuddly dogs do not convey with the house. Seller is NOT contingent on purchase. Please do not play the harps (I know it is soooo tempting).
Buyer must have inspection completed by certified ASHI, CREIA, NACHI, or NAHI Inspection Company.
Possible noise from traffic, aircraft and watercraft activities, appliances, and neighbors etc. Buyers are recommended to investigate neighborhood safety by contacting the local police department.
Owner is a fragile, elderly lady with a bad back. Don’t make it weird, thanks.
I have mentioned repeatedly that the buyer-agent is a dead man walking. All forces within the industry are combining to push the buyer-agent out of the equation, and home buyers will be worse off because they will only have faux representation when buying directly from the listing agents.
Everything is negotiable……well, except the buyer-agent commission. From the Code of Ethics:
The Code of Ethics Standard of Practice 16-16 prohibits buyer-brokers from “using the terms of an offer to purchase to attempt to modify the listing broker’s offer of compensation.” Thus, the buyer-broker cannot attempt to condition the purchase of a home on the seller-broker’s agreement to adjust the amount of compensation offered to the buyer-broker.
Second, the Code of Ethics’s Standard of Practice 3-2 requires that any modification in the compensation offered to the buyer-broker “must be communicated to the [buyer-broker] prior to the time that [buyer-broker] submits an offer to purchase the property. And once a buyer-broker “has submitted an offer to purchase the property, the listing broker may not attempt to unilaterally modify the offered compensation.”
Third, Case Interpretation #16-15 advises that any negotiations regarding the buyer-broker’s commission “should be completed prior to the showing of the property.”
The buyer-agent is NOT allowed to negotiate their commission during the offer process!
What’s worse is that any negotiation of the commission must happen BEFORE the home is shown to the buyer. How many listing agents will agree to pay more commission before the buyer sees the home? The answer is zero.
The pending lawsuits against realtors are all about the seller being required to pay the buyer-agent’s commission. Miraculously, ReMax and Anywhere have already settled, and the whole thing could get resolved shortly. But it has been univeral among observers that the end result will be that home sellers will not be required to pay ANY commission to the buyer-agents. It will be optional instead.
Two things will happen:
The buyer-agents will be even more likely to steer their clients to where they can get a commission.
There will be even more shenanigans by listing agents.
Rob lays it out here, starting around the 26-minute mark:
It means that the buyer-agents will have to either live with the commission that the seller is offering (if any) and steer their buyers to those homes, or have an agreement with their buyer to be paid directly by them. While that sounds nice, it is a complete change to the business and most agents won’t be able to justify being paid for their services. When buyers can just go direct to the listing agent for free – which the listing agents will be advertising – they will be very reluctant to be contractually obligated to pay a buyer-agent.
I’m on track this year to beat my production volume of 2022! From TRD:
During the pandemic, home sales boomed on a foundation of low-lying interest rates. Now real estate professionals are seeing the slowest market in 35 years.
With mortgage rates higher than 7 percent, Southern California home sales have fallen by almost half over the past two years.
Even with home prices inching back up as sales plummet because of the few number of homes for sale, real estate agents, home inspectors, escrow officers and mortgage brokers starve for business.
The average real estate agent earned 19 to 29 percent less business in the latest year measured, according to Real Data Strategies. At least 5,100 agents who made money in the prior year ended the most recent 12-month period without a single sale.
First we learned that the CEO of the San Diego Association of Realtors embezzled $1,000,000+, and now we hear that the National Association of Realtors is full of scumbags. The NY Times ran a story over the weekend that accused the NAR president of sexual misconduct and he resigned this week – but denied any wrongdoing, of course.
More stories have come out this week from various insiders, summarized here:
Here are comments left by listing agents in the MLS confidential remarks over the last month – some are scoldings!
No Showings until Open House, Then use showing time. Seller will only show WED/ SAT MUST USE SHOWING TIME!!! Must have a Pre qual To Enter Per seller Instructions.
Directions to property: 33.149132252579626, -117.31781391389755
All other showings after the open house to be requested via docusign.
Text agent, wait for conformation, then go. Sentri only. If you do not have Supra, agent to accompany. No one-day codes.
No shoes allowed in the home NO EXCEPTIONS., I will provide house slippers. This home has many ” breakable items” Please hold the children’s hands, this is not a place for children to play.
Credit toward garbage disposal.
Back on market as buyer past away.
Multiple offers well over asking. No more showings.
**MULTIPLE OFFERS NO MORE SHOWINGS AT THIS TIME**
NO MORE OFFERS WILL BE ACCEPTED **NO EXCEPTIONS**
Will show in till April 28 (published on May 4).
Call agent if buyer is interested.
Motorcycle helmet and jacket rack does NOT convey.
DO NOT DISTURB OCCUPANTS! DO NOT GO TO FRONT DOOR! House will not be shown until it is Active on the MLS.
AGENTS PLEASE READ!! NO MORE SHOWINGS AT THIS TIME.
Please do not call. Vacant lock box. Do Not use Showing Time. I do not support Zillow and will not take their call. ***AGENTS*** We are in deep negotiation with offers from investors.
Booties/Shoe coverings mandatory.
DO NOT ADD ME AS A RECEIVER OF THE DOCUSIGN FILE. Offer submission instructions must be followed.
Please use GPS or you might get lost.
PLEASE DO NOT CONTACT ME FOR OPEN HOUSES.
Sold before going into computer.
SELLER RESERVES THE RIGHT TO REFUSE ANY AND ALL OFFERS.
BUYER AGENT FORFEITED COMMISSION OF 2.5%
WELCOME to your Home!
Do not contact listing agent for appointments.
NOTE: SALE WENT PENDING PRIOR TO INPUT ON MLS. *CALL LISTING AGENTS FOR MORE INFO. THIS IS A STANDARD REGULAR SALE.
I like to promote my listings at the local broker meetings, just in case someone might have a buyer. It would be really beneficial if the big agents attended these meetings and participate like they do in La Jolla – the camaraderie alone is worth it. Then the open houses of the new listings later in the day help agents sharpen their market knowledge:
Hat tip to our seller who noticed a new paragraph in the counter-offers this year that went undetected by everyone I know – and we go to the Forms Update every year to hear about changes!
Paragraph 1C in the counter-offer identifies the Appraisal Gap:
When we first read this, it sounded like the purchase price would automatically be lowered to the appraised value without negotiation.
But Gov at the C.A.R. legal office submitted this response:
It means that if, for example, the buyer made an offer of $500,000, contingent on the property appraising at $475,000, and the Seller countered at $520,000 and the buyer accepts the counter, the buyer’s appraisal contingency is automatically adjusted to be $495,000. In other words the $25,000 “appraisal gap” is carried over in the counter. (I admit the language is a little confusing).
Here is the part of the contract that he references:
I’ve never seen anyone put a lower value in Paragraph L(2), but we just started using this version.
The touchy part was that the counter-offer comes later – after the contract verbiage above – which would mean that it would supersede it. It looked like the buyer could waive the appraisal contingency, but then the counter would make it valid again.
Agents are supposed to maintain a good working knowledge of the purchase contract, and every year we go to the C.A.R. review to keep up with the changes. But I don’t remember discussing this paragraph that was added in 2021, and expanded in the most recent version of the contract.
We had an interesting test case on it recently.
The buyer wanted to cancel their purchase, but they knew someone who was also interested in buying the property too. They claimed that Paragraph 23 gives them permission to plug in the new buyer, and the seller can’t ‘unreasonably’ withhold consent.
The way that paragrah reads, they might have a case. If they were able to provide a pre-qual letter and properly notify the seller and listing agent, it looks like they would have complied with the criteria expressed in this paragraph.
Do I want to get into a battle over it?
Luckily, they did not produce the documentation, and instead bowed out gracefully. But for a minute, I thought we might be stuck with the assignee, who had said that he flipped homes in the past. I cringed at the thought of the usual discount that flippers demand after their home inspection.
From now on, we’re going to counter out #23 before we enter into an agreement.
Between the lawsuits that will decouple commissions and homes.com that funnels all inquiries back to the listing agent, the buyer-agents are cooked. It’s just a matter of time.
Florance also detailed his vision for Homes.com, which he believes can serve the interests of consumers and agents in ways that other residential listings sites do not.
“I’ve used some of these competing sites myself and submitted leads on properties I’m interested in. The experience is remarkably awful,” Florance said. “The moment you submit a lead and for months afterwards, you’re bombarded with cold calls from countless agents who have questionable qualifications.”
He said the agent experience is also lacking. “The competing models use all the agents’ listings in a market to funnel monetize leads to just a very small percentage of agents.”
Florance also made the case that there is plenty of opportunity to provide a more seamless online set of tools for agents while cultivating a residential real estate space for consumers serious about buying and selling homes. “While other sites are injecting their agents into the homebuyers’ search experience somewhat awkwardly, we offer a friction-free environment connecting buyers directly to the listing agents,” he told investors.
Consumers can collaborate with their agent directly using the Homes.com platform. “Our agent collaboration tools are up and running. We’ve had tremendous feedback from both agents and consumers,” Florance said.
“We’re presenting consumers with hundreds of thousands of highly qualified potential buyer agents for free based upon those buyer agent skills and experiences rather based on how much the buyer agent is willing to give up in commission to the portal,” Florance said. He predicted that the company will start monetizing the site later this year.
“Not only do we believe we offer a superior consumer experience for buyers, we also believe we are much better aligned with real estate agents,” Florance said.
