Attorneys for the plaintiffs claim they spent 96,500 hours and $13 million of their own money to review over 5 million documents. They retained at least 20 experts and consultants, and performed approximately 180 depositions, and suffered through three unsuccessful attempts at mediation to achieve this result. The two lawsuits have over 1,800 docket entries. Under well-established precedent, they say they are entitled to an award of attorneys’ fees representing one-third of the $208,500,000 settlement fund ($68,805,000).
Americans can claim payments as part of a major settlement from the National Association of Realtors and other real estate groups. A variety of real estate companies were also involved in the suit, which is paying out up to $418 million.
RE/MAX, Anywhere and Keller Williams were all named in the suit, which alleged that groups forced home sellers to pay commissions through anti-competitive agreements.
Agreements between companies can result in non-competition across an industry, which inflates prices and corporate profits.
These practices, allegedly used by the named real estate companies, may violate antitrust laws, which aim to protect consumers by preventing monopolies.
Plaintiffs in the case claimed that home sellers paid inflated commissions to brokers and real estate agents as a result. There are few details yet available on how much those impacted will be paid, according to Top Class Actions.
The deadline to file a claim is May 9.
If you were impacted and do not wish to be included in the settlement, the deadline for exclusions and opt-outs is April 13.
None of the companies involved in the suit admitted any wrongdoing.
First, you must have sold a home on a multiple listing service, or MLS, in the time period covered by the suit. Date ranges vary greatly based on region and listing service. The oldest complaints that could get payments are from 2014, with the newest being from early 2024.
The exact dates for your location can be found on the settlement website:
You must also have paid a commission to a real estate brokerage in connection with that sale.
These brokerages are common across the industry, but many have speculated that could change soon as a result of years of legal trouble facing real estate companies.
If you’re unsure whether the suit applies to you, the settlement administrator can be reached at 888-995-0207.
If you do not opt out or file a claim, you may lose your right to be able to sue any of the companies implicated over this issue in the future.
The individual payouts are expected to be around $10-$13 per transaction. I’ll also include a pair of tickets to the Del Mar Turf Club for any of our clients!
Urban sprawl in west Phoenix is a tradition and it makes you think that eventually the desert will be paved all the way to California!
We have clients who have befriended Shawn and find her personable and a believer in real estate videos. Here’s her introduction the the best 55+ homes in the west valley:
For the newer readers, Donna and I have two daughters.
After Kayla graduated from the University of Oregon, she worked with us for five years and then moved to Manhattan where she’s been a realtor there for the last six years.
Natalie has always been a dancer, and she graduated from UCLA with a degree in dance. Since then, she has lived in Los Angeles doing smaller gigs in hopes they would lead to a full-blown concert tour with a major artist. She got her break last year, and has been on tour with Karol G. since August.
For those who aren’t familiar with Karol G., she has been called the latin Beyonce. The tour will conclude in Madrid, a city where she is bigger than Bruce Springsteen and Taylor Swift:
While it has been the dream tour of a lifetime for Natalie, it will come to an end in July (not June – the wiki clip above has the wrong month), after which she will continue to pursue her dance career. Stay tuned!
At the same time, she has also been our full-time marketing director. She authors our email newsletters and handles all of our social media accounts!
Because dance careers tend to be limited to younger people, we anticipate that Natalie will take over our business at some point. She handles Kayla’s marketing too, and if it all goes right, the future of the Klinge Realty Group will be bi-coastal and continue for decades!
Attention realtors who don’t have kids taking over their business. We can help you! When the times comes for you to exit the realtor business, we will buy your database, and take care of your people! Contact me when the time is right for you.
We are with daughter Natalie who is on tour with Karol G. on their Latin America leg with shows in Lima, Peru this weekend. We went to Machu Picchu yesterday:
While the media has been stirring up their hysteria over the commission decoupling…..this from CNN:
It’s the second part of the settlement that will likely frustrate buyers even further:
Let’s call it, The Return of the PEAD!
When Covid broke out, it was decided that the only way we could safely show homes again was if every buyer and agent submitted a form to the listing agent that declared they didn’t have Covid, and weren’t exposed to anyone who did. It was a joke of an exercise, but we had to do something.
Because this is a business where the competency of the listing agent is many times just measured by their ability to complete the forms, the gathering of the PEADs became almost militant in nature. Listing agents demanded that a buyer-agent MUST provide their PEADs before even thinking about scheduling an appointment to show the home!
Do you remember how in the minutes/hours it took to send the PEADs over to the listing agents, it caused just enough delay to allow shenanigans to take place behind the scenes? Listing agents would declare with glee, “Oh, you took too long to submit your PEADs and I already sold the house to someone else!”
The same thing will happen with the buyer-broker agreements. I’ve already had a Coldwell Banker agent tell me that if I was going to submit an offer on his listing, to make sure I include a copy of my buyer-broker agreement. It’s not required until July, but hey, it’s never too early to bust the chops of the buyer agents!
Secondly, think about the buyers who haven’t found a buyer-agent they liked yet, and just want to attend an open house that looked semi-interesting online.
The new rule says you can’t see the house without a buyer-broker agreement.
Open-house agents will be manning the front door with their “sign-in” sheets. But now those sheets will be committing the buyer to a buyer-agent commitment too. Will the agents mention that part? How many unwitting buyers will attend an open house in July and then find themselves in a 3-month or 6-month commitment with an agent they just met?
The legit agents will at least designate their agreement for this house only, where the buyers are committed to the agent if they buy the open house. But those buyers will be giving up their name, address, phone, and email so if you don’t buy this one, the agents keep contacting you until you buy or die.
Oh, you don’t like that program?
Chuck had the best reply so far, “Hey, it’s the DOJ”.
The number of active listings is a reflection of how many new listings are coming on the market vs. how many are going off the market at the same time.
While today’s number of actives is 29% higher than it was last year at this time, let’s note that the 2023 inventory was a virtual flat line where they were selling as fast as they were coming on the market.
Any reason for alarm today?
Not really – more actives means there are more homes to choose from, which should mean more sales as long as the number of unsold listings doesn’t start looking like a glut and spook the buyer pool (apparently, the +29% is acceptable). So far, so good in 2024.
This year looks pretty strong! If you house isn’t selling, it ain’t the market’s fault.
Carmel Valley has had a real shortage of inventory lately, and from what we can tell from the bidding wars on the creampuffs, there are dozens of buyers in the hunt. This closed for $3,100,000 cash, which was $115,000 over list.
The recent NAR settlement clearly states that the MLS is prohibited from publishing a buyer-agent commission paid by the seller.
It means we might be hearing more commission talk, not less, as listing agents take responsibility for publishing the buyer-agent rate their sellers are offering.
It won’t last for long.
Many have speculated that the residential resale business is heading the way of commercial agents – an arena that has never had an official MLS, and where each listing agent decides their own policy on how to pay the buyer-agents.
Go to Loopnet or Crexi, the two commercial real estate websites of last resort (where agents put their listings after they have exhausted their stable of waiting buyers). You’ll read about cap rates, FARs, NOIs etc. but you won’t find ANY mention of a buyer-agent commission unless desperation is in play.
Why is that?
They want you to make assumptions (in order):
No commission is being offered to buyer-agents.
Some commission might be offered, but you have to call to find out.
The commission they offered over the phone won’t change.
Those are some hasty conclusions, and don’t be surprised if they are a moving target. Even when it gets down to putting terms in writing, the listing agents want to commit to a commission rate “as stated in the listing agreement” and hope you don’t ask questions. One agent this year said that the commission was on a sliding scale, depending upon how much I offer – but wouldn’t commit to any hard numbers.
Residential listing agents have always loved being vague so nobody can ever pin them down about keeping their word. When they figure it out that they don’t have to publish any commission rates, soon all will be offering zero (or close) to the buyer-agent – and will only acquiesce if they have no other offers.
A bad market will fix it though.
If the political hysteria over the next seven months freezes up the market, the motivated sellers and listing agents will be forced to pull out all the stops to make a deal – including the offering of a generous commission to buyer-agents. We haven’t seen a buyers’ market for 10+ years, so many won’t remember – but sellers will want to try everything else before they lower their price.
But will it come to that?
Probably not, because they will wait it out instead, and we’ll look up next year to see who is left! It won’t be the buyer-agents though. They are walking dead men, and by this time next year, single agency (buyers going direct to the listing agent) will be emerging as everyone’s solution.
The controversial local brokerage in Los Altos was offering a measly $10,000 commission to the buyer-agents on their listings, most of which were $4,000,000 and up. They listed a similar house on a quiet street about a mile away for $2,988,000 and then marked it pending a week later.
So I followed their lead and priced my listing at $2,995,000 even though mine needed EVERYTHING and was on a heavily-traveled street.
I wanted to prove that paying 2.5% commission to the buyer-agent would cause a better result.
Theirs closed for $4,200,000 (and was put up for rent for $2,900/mo).
Mine sold for $4,200,000 too, but then our buyer-agent volunteered to cut 1.5% of her 2.5% commission and deduct it from the sales price. In those cases, the lender has to get the appraiser to re-issue their appraisal at the revised price – but she forgot, which delayed closing for another week. I’ve never prayed so hard for an earthquake not to happen!
I don’t know if the agent on the other sale only got paid $10,000 to support her buyer with paying $1,200,000 over their list price, but she deserved more.
But combined with my buyer-agent being so generous, and the other comments at open houses, the agents around the Silicon Valley are so desperate that they are begging for business. The amounts buyers pay over the list prices indicate the same.
I still think my result was better than the $10,000 guy due to our harsh condition and busy street. But I can’t say that the 2.5% made any difference at all.
We can probably come to this conclusion though. In a scorching-hot entry level market, you don’t need to pay much to a buyer-agent, if anything at all. If the buyer-agent is smart, they will have their own agreement with their buyer to cover it.
In areas where the actives-to-pendings ratio is 4:1 or higher (Rancho, I’m looking at you), paying a reward or bounty to a buyer-agent is worth considering. Is that steering? No, it’s America, where paying incentives to get what you want should be legal and encouraged.
