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Wednesday, March 20, 2019

How A Recent Class Action Lawsuit v Realtors Could Benefit You Financially

~ "We're not a real family - just black actors hired for this ad specifically because of our color - it makes most people feel better about themselves to see this"

A very recent class-action lawsuit is taking aim at real estate agents and the tools they use to do business with housing industry watchers saying it could revolutionize the way Americans buy and sell homes in the future.

The suit was filed in Chicago on behalf of anyone who sold a home through one of 20 of the largest listing services in the country over the past five years.

It charges that the mighty Washington-based lobby National Association of Realtors (NAR), as well as the four largest national real estate brokerages, and the Multiple Listing Services (MLS) they use, have conspired to require anyone selling a home to pay the commission of the broker representing their buyer “at an inflated amount,” in violation of federal antitrust law.

Fingers crossed that the lawsuit is successful.
Currently, homeowners who are ready to sell their properties usually hire a real-estate agent to represent them by staging the home, photographing it, adding it to the MLS, marketing it, and showing it to prospective buyers.

Sellers agree to pay that person a commission on the selling price of the home. That commission has traditionally been 6% but it’s a little more complicated than that.

Sellers can really only negotiate with the agent they’ve hired, while agents representing buyers are generally assured of a standard 3% commission.
That means that a seller’s agent who’s willing to negotiate, or one that works for a discount brokerage, will be paid less than a buyer’s agent.

Buyers can choose to be represented by an agent, or to go without one – but in any case, all commission money for both sides of the deal is Always paid by the seller, thanks to a 1996 NAR rule known as the “Buyer Broker Commission Rule.”

You see, in order to list a property on one of the many regional MLS databases, agents must abide by the Buyer Broker Rule and listing on the MLS is essential for making a sale -- most MLSs are controlled by local NAR associations.
Home sellers have been continually saddled with a cost that would be borne by the buyer in a competitive market

And because most buyer brokers will not show homes to their clients where the seller is offering a lower buyer broker commission, or will show homes with higher commission offers first, sellers are incentivized when making the required blanket, non-negotiable offer to get the buyer brokers’ cooperation by offering a high commission.

Clever, yes?
This lawsuit is a potential “nuclear bomb" on a very corrupt cartel-like industry and people in the profession are taking it very seriously

This is in large part because of the heft of the law firms behind the suit who have a long history of prevailing over weighty corporations like Volkswagen for its emissions scandal, Apple for its e-book collusion, and Exxon after the Valdez spill.

Will the lawsuit be victorious in court?

We hope so
We also believe the NAR will figure out some other trick or scheme to maintain absolute control of the real estate industry and ensure all those who work as Realtors and real estate agents (only real estate agents who pay NAR dues can call themselves 'Realtors') will make as much profit off a house sale as possible

It's a very dishonest industry and the NAR is even more repugnant

Back in the early days of this blog we'd write incessantly about how the real estate market was collapsing and how the media refused to report it because their guy Obama was in office

Trust us, had McCain won in 2008, every article on the economy would have been 'sky is falling' financial Armageddon
So when articles on housing were written, it would be 5-6 paragraphs of pollyanna fluff with quotes from the NAR spokesmen always giving optimistic positive spins as if they had no direct financial benefit to providing false information and confidence to listers and buyers

And for the lazy worthless media, no actual investigative reporting was necessary - just call up the NAR spokesman or wait until they released their monthly propaganda report and then take a few words here n there to push the narrative of BS 'recovery'

We've only recovered economically because of Trump and his policies.
So we hope the lawsuit is ultimately successful and really changes that industry forever in a positive way for consumers

But its not something that will be decided in a week, month or even a year so if this topic interests you, then you'll have to follow it over time on your own

We just don't trust the media will ever provide information for the masses to hear and read about - just one of those things where you know because you sought it out.