One of the biggest real estate news stories of 2023 is the NAR class action lawsuit filed in federal court in Missouri alleging price manipulation in the real estate industry, with major companies banding together to keep agent fees artificially high. I accused him of being there.
The Sitzer v. National Association of Realtors lawsuit names the National Association of Realtors, Keller Williams Realty, Anywhere Real Estate (formerly Realogy), RE/MAX, and HomeServices of America as defendants, and the brokerage market represents a large portion of the . The lawsuit, filed on behalf of more than 500,000 home sellers in Missouri, alleges that these residential real estate giants conspired to inflate brokerage fees. Anywhere Real Estate and RE/MAX settled prior to trial, and on October 31, a jury sided with the other defendants and awarded a $1.78 billion verdict, but the judge decided that the final The final amount of damages could reach $5 billion.
With additional lawsuits emerging in other regions, we asked local brokers what they thought about this news and what it means on a national level.
We also asked them about their New Year’s resolutions!
Jack Pearson “Compass”
This discussion of buyer and agent fees will allow our industry to better define what real estate professionals can do for buyers. I don’t think it should be made nationwide, and I don’t think it’s necessary.
What are your New Year’s resolutions?
Replace negative thoughts with positive ones.
Judy Desiderio, Town & Country Real Estate
I would like to know more about the circumstances that led to this lawsuit. Is it bad behavior on the part of the organization and a specific location where the broker’s cooperation may be against real estate ownership laws, or is it caused by a lawyer who resents the broker’s commission?
From what I’ve read, there seems to be a significant misunderstanding of how and why brokers do joint listings. I can talk about the time when all listings were public listings because he has been working as a broker for over 30 years. At the time, sellers offered listings to just about every brokerage firm in town.
Open listings had the same commission rates as today’s exclusive listings, but when a property was sold, the agent kept 100% of the commission. There was no sharing of money or information.
Then, as it evolved into today’s modified MLS system, exclusive listings became the norm and public listings became rare.
How and why did this happen? My recollection is of three factors. First, the eastern end of Long Island was infiltrated by national corporations born out of the MLS system.
Second, sellers have to contact dozens of local businesses to provide public listings to everyone, field calls from hundreds of agents, and worry about whether listing information is displayed correctly. there is. The seller chooses this single contact that she knows and trusts and has that broker share that listing with brokers in other areas on her 50/50 basis.
Third, there was a strong call for transparency, cooperation, and accountability. And a monopolistic world prevailed.
For brokerage firms, this meant that marketing costs, promotional costs, and information gathering of all kinds were significantly different.
When co-brokering these exclusive products, the Listing Broker agrees to share 50/50% commissions with the Selling Broker, allowing us to engage with thousands of licensees and, as always, act in the Seller’s best interest. To do.
The rules governing our industry are clear regarding collaboration, ethics and transparency. The idea of collusion is absurd. Our business is probably the most competitive business outside of professional sports.
Allegations of price manipulation are equally ridiculous. As brokers compete for listings and agents, we’ve seen everything from 1% listing fees to brokers buying agents such as athletes.
As I said earlier, I would like to know more about the origins of this incident. I hope that the national and regional real estate associations come together to show the public what we do and how we represent their best interests. Masu. And if there are a few bad guys, they should be banned from this industry forever.
What are your New Year’s resolutions?
My New Year’s resolutions haven’t changed over the years. Learn more, do more, expand your experience and knowledge, and grow.
Christopher Covert, Modlin Group
I think part of what the lawsuit and multiple copycat cases show is that as an industry we need to make sure we’re clear, concise, and upfront in our dealings with clients. New York State has very specific guidelines for how you, as a broker or agent, present standard disclosures outlining your relationship with a fiduciary institution, and for better or worse, East End says he is NAR and was not part of the MLS system. The Company has always had a clearly defined listing agreement with respect to its fee structure and co-default relationship. So we don’t know if we have any exposure to worry about.
That being said, there are always opportunists who want to jump on a trend, so we’ll have to wait and see. I think customers in the luxury Hamptons market appreciate the value that an intelligent agent brings, and I don’t think that’s going to change.
What are your New Year’s resolutions?
In 2024, I want to focus on my overall health. Professionally, I look forward to exceeding targeted growth metrics in the Hamptons business, building more focused customer relationships, and continuing to improve the customer and agent experience across the group. I have very specific health and fitness goals in mind. And to be as good a husband and father as I can be.