--The National Association of REALTORS has reached a legal agreement where it will end the 6% commission that is routine in home sales. --In the settlement with homeowners, the association will pay $418 million in damages and end litigation on the matter. --Experts say that Americans pay $100 billion a year in real-estate commissions. --- Who was suing the realtors -- homeowners? Who gets the $418 million dollar settlement -- homeowners? If you don't like the realtors commission, then sell the house yourself. That's called a FSBO (For Sale By Owner). I've done that before. But I just sold a home and was satisfied to pay the realtor his 6% fee. I thought he worked hard and earned it. He paid for the advertisement, cleaned up the vacant house, showed the house, put it up for auction, and sold it in a reasonable time. What about the exorbitant fees a doctor charges? What about the exorbitant fees a lawyer charges? I called a lawyer to help me probate an average estate and he charged me $5,000 right away for a retainer. The legal secretary did all the work. Oh, I forgot, it's the lawyers who do the suing. 99% of lawyers give the other 1% a bad name.
It’s an antitrust case. It is one thing for a product or service to be expensive. But the free market should fix that when competitors enter the market at a lower price. But what happens if all the competitors agree to the artificially high price? It’s called price fixing and had been illegal since 1890.
Home sellers filed the original suit. My understand is the suits argued the NAR and brokerages who required their agents to be members of NAR had violated antitrust laws. In other words the system as it existed was anti-competitive. It's a brave new world now since commissions are going to decline by around 30% or more. Meaning people can sell their homes for less, meaning home sales are going to jump would be my guess.
We just sold a piece of undeveloped property. We used a realtor and got 6 offers inside of a week. The best one was over the asking price with no contingencies. I was more than happy to pay the 6% who had the connections to know who should be informed about the availability of the property. I was the the state and local governments were as useful. They are taking more than realtor in taxes.
You could pay them 20% if you want. The issue here was price fixing, not price. May not seem significant in a $20k transaction but in a $1M deal? That's $60k added to the price of the home and the seller really couldn't negotiate the fee. Clearly an anti-trust issue.
At least the realtors were up-front about their fee. It was always listed in the contract. They work hard and study for a license, which is more than a server in a restaurant who wants 10% to 20%. And a lawyer may take as much as 40% in an accident settlement.
You can use someone else. You can use an on-line service. You can sell it yourself. There is a huge advantage to know who the players are in certain parts of the market for anything. When I was a coin dealer, when I got a piece of early copper, I knew the dealers who specialized in that area. I could have tried to sell it myself, but they had the "ins" with the collectors who paid the most. It's the way markets work. The piece of property I sold is in a mid Atlantic state. I'm in Florida. I don't know the market up there, and there were resort aspects to the property. I got money from a developer as opposed to a farmland price, which would have been a heck of a lot less. You can argue the anti-trust stuff all you want, but it doesn't hold water. There are alternatives in the real estate agent market. As a retired business person, I can tell you that business owners need to eat too. When someone gave me a ridiculously low ball offer on a coin, I'd ask them, "Do you work your job for 10 cents an hour?" The answer is no. Most business owners are working as hard and usually harder than the people they employ.
One can’t argue with a brick. My economics professor in college summed it up well. There is no anti-trust case of the sellers are not earning monopoly rents from their services. The mere fact that the going commission is 6% is not an indication of collusion and unfair practices. In my case the rate could have been 5% if the land had been sold strictly in-house. It wasn’t so I paid 6%. I could have gotten 5% if I had taken another offer for less money. And, like I said, between the real estate transfer taxes, 2%, and the capital gains, the government took more than the realtor.
The government thinks it's entitled to any amount it wants of your money. They can take it by threat of prison. And they never have enough of your money (we're just going to raise a penny tax for the road). A penny here and a penny there and each generation thinks it's OK for just a penny.
Well golly gee whiz! It would seem the actual factual judges disagree. To list on MLS one must go through an agent who is employed by a broker. Fees are agreed upon by thee member brokerages anti-competitive. Every broker and by extension agent within the MLS agrees to this. anti-competitive Perhaps rather than trying to argue with a brick you'd be better served by understanding the facts.
But it isn't all of the competitors. Only those who are realtors. Other real estate agents are free to compete but offering a lower commission.
If you don't want to pay a realtor...don't pay one. Sell your property by owner and do the work yourself.
Sounds like someone is jealous of a realtor's income. When the suit was settled I wonder how much the lawyers walked away with?
Only if this is met with a large hike in home building. It used to be "location, location, location", in the real estate industry. Now its "supply, supply, supply." North America currently has a higher homeless rate than many middle eastern countries while prices remain at shock levels. Type "Real estate, Vancouver" in your browser.
