Top Law Firms to Sue Realtors (NAR) Over Traditional 6% Fee

[LoneRanger]

https://www.marketwatch.com/story/big-name-lawsuit-could-upend-realtors-and-their-6-fee-2019-03-19

Couple of the top law firms in the country are going after National Association of Realtors in an attempt to level the playing field for people buying or selling real estate in the United States. These are the same attorneys that went toe to toe with Big Tobacco and won.

This is going to be interesting to watch.

 

[Phishin]

I hope the NAR gets tattoo'ed by these guys. Realtors are right up there with lawyers on my "I can't stand you" list.

 

[BMWTurboDzl]

I hope the suit gets thrown out.

 

[HangFire]

Mixed feelings. Realtors(tm) are a price-fixing near monopoly. On the other hand, if the lawyers win, only the lawyers win.

 

[Cujet]

Good, I'm glad to see this. Realtors can be scam artists.

When my father died, I was tasked with selling his nice house. I was utterly unable to negotiate a better rate with any of the agencies. I was told that 6% was the "fee" and that it would not be lowered for any reason. I certainly did not feel like handing over $20K to an agent for what amounts to nothing more than a days work.

Instead, I put up a sign in the front yard "For Sale By Owner" with a price clearly posted and a phone number. It sold in 3 days. Had the estate lawyer handle the house title transfer for $800.

In those 3 days, I was constantly annoyed by agents trying to sell the house for me.

 

[BMWTurboDzl]

Originally Posted by HangFire
Mixed feelings. Realtors(tm) are a price-fixing near monopoly. On the other hand, if the lawyers win, only the lawyers win.

True, but there's no requirement that a buyer or seller use a realtor and as a homeowner you're not forced to list your home via MLS. You can just stick a sign in your front yard. Of course the 6 percent fee isn't set in stone. Realtors collect less on very expensive homes.

 

[Kestas]

This has my blessing. Considering how the price of homes have skyrocketed, 6% is outdated. That's $15,000 on a 250K home -- typically 6% of someone's wealth! I know how hard I work for $15,000. I don't see that kind of effort from realtors. You know the profession is outdated when you have an explosion of people who want to become realtors. I heard it tripled at some point before the 2008 crash. Everyone wanted a piece of that commission. Where else can you make good money without education and work a clean job? The only thing they have over us is their MLS listings, which are now on the internet for buyers to look at.

 

[Cujet]

Originally Posted by BMWTurboDzl
Of course the 6 percent fee isn't set in stone.


My experience says otherwise. Not one agency was willing to take less.

 

[BMWTurboDzl]

Originally Posted by Cujet
Originally Posted by BMWTurboDzl
Of course the 6 percent fee isn't set in stone.

My experience says otherwise. Not one agency was willing to take less.

Ya well if the house sold for $2 million I'd bet that they'd get less than 6 percent.

 

[BMWTurboDzl]

Originally Posted by Kestas
This has my blessing. Considering how the price of homes have skyrocketed, 6% is outdated. That's $15,000 on a 250K home -- typically 6% of someone's wealth! I know how hard I work for $15,000. I don't see that kind of effort from realtors. You know the profession is outdated when you have an explosion of people who want to become realtors. I heard it tripled at some point before the 2008 crash. Everyone wanted a piece of that commission. Where else can you make good money without education and work a clean job? The only thing they have over us is their MLS listings, which are now on the internet for buyers to look at.



What? You're paying for access to the MLS system, their contacts, their expertise, and possibly some legal protection. The average realtor nets about 70k/yr but of course that fluctuates with the local market.

 

[JeffKeryk]

I will negotiate less than 5% in my upcoming sale. Of course, the house value is a lotta $$.

 

[PimTac]

I didn't know people were forced to use realtors? There are other options out there including For Sale By Owner.

 

[CT8]

My real estate agent has served me well and has worked lots of time showing me properties with out or cancelled sales. She dots all the Is and crosses all the Ts and really protects my behind in all aspects of the transaction and has told me to skip the deal when necessary. I am driven by condition and price.

 

[KCJeep]

I just sold and bought a house last year. You get a lot more with a realtor than just a day's work and some handling of paperwork, at least you should. Our realtor worked his rear off for us. For the fee you get tremendous internet exposure, a keen eye for what needs to be done to the house and how to show it, and seasoned advise when it comes time to negotiate with the other parties either selling or buying. And a house listed with a reputable realty company will generally list for and sell for a bit more than a FSBO, so you have recovered a lot of the fees right there. And there are inevitably some hassles that come up, so a realtor is usually helpful there as well.

They are not exactly rolling in the dough either. That 6% is usually 3% because it is most times split between two realtors, and the brokerage takes a big chunk of that (here I believe the brokerage gets 2% of the 6%).

Nothing wrong with FSBO either but a a good realtor is not a rip off in my experience.

 

[Donald]

Well one way is to see how many agents/brokers are involved when the house is sold and then tell the listing agent, "the only way we can make this work is if the commission is reduced".

 

[LoneRanger]

The agent listing my house right now works within a large multi-state agency, and he in union with his agency have made decent money off my wife and I on two transactions so far, as follows: Her house in December, 6%. House we bought after selling her house, 3% (split w/ listing agent of that house). When I asked if he would reduce the fee on my house since they've earned well into five figures of commission off us already, the answer was no but he cited that it is the agency's rule and he would if he could but he can't. Now, I do not consider him to be misspeaking. My wife has known him a long time and I am a good judge of character and I feel him to be a stand up guy. I do believe he is restricted by his agency as to fee. There is agency overhead in the fee, he doesn't get all of it. But having said this and while I am not whatsoever a fan of the excessive litigation that pervades our culture in this country, I also feel the system may be in need of some scrutiny? I'd rather it come from the Federal Trade Commission, instead of a big tort money grab by private law firms. But it is what it is.

 

[MNgopher]

I'm trying to understand where anyone forces anybody to use a realtor? Or why if this is such a problem, somebody hasn't just come up with, promoted, and instituted a different regional listing system that doesn't require fees or agreements such as what exist today?

When the lawyers get involved in something like this, the only ones making money in the end will be the lawyers. Whether you pay the agent fees or costs of business go up because of the affects of this type of case, the fact is the people paying for it are everybody else.

When we listed our home, our agent worked hard to get it sold. 1/2 of the fee went to the buying broker, another 1/4 went to the brokerage, so she netted 1.5% of the sales price to her bottom line. She did a lot more work than that with us.

 

[Cujet]

Originally Posted by BMWTurboDzl
Ya well if the house sold for $2 million I'd bet that they'd get less than 6 percent.

Oh well, that does not apply to us "little folk". It's truly amazing how many people have their hands out for money during a home sale.

 

[Win]

I would be much more upset over the notion that a real estate broker can be allowed represent both parties to a single transaction, if both consent to this arrangement.

As already pointed out, no one is legally obligated to employ a realtor. This type of suit is materially different from the old bar association fee schedules.

If this undertaking is successful, it may well be an example of be careful what you ask for, you may get it. Getting rid of a standard fee may or may not reduce the average fees charged, I would think the top guy or gal would want to charge more than those less able, wouldn't you?

 

[PimTac]

It should be noted that the realtor doesn't get the full commission. That 6% is split depending on the company, agency, and any other realtors.