End Game - DOJ Kills NAR
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- Опубліковано 29 вер 2024
- Last week, a judge allowed the DOJ to re-open their investigation into NAR. Apparently, the DOJ will not rest until NAR has been completely destroyed and/or ends up in financial ruin (i.e. bankruptcy). Is this bad for REALTORS and good for consumers? Or is it the exact opposite?...
News Article: www.housingwir...
Brian Fitzpatrick - REALTOR® (Boston, MA)
Lamacchia Realty
451 Main St.
Waltham, MA 02452
MA License # 9569380
www.brianfitzr...
brian@brianfitzrealty.com
/ @brianfitzrealty
DOJ are vampires
I vahnt tooo ssahck yore bluuud 🧛🤣
No one is talking about lawyers and their % and set fees 🤔
Lawyers go to school for seven years (at least) not seven weeks. After that they essentially work for free or on a draw, sometimes for years until they stabilize in a firm or their own practice. They don’t hound family and friends essentially for their initial sales. Lawyers represent their client jealousy and their fees are clearly and openly discussed VERBALLY. Realtors represent their commissions jealousy and often omit through culture and practice (i e NAR case) details relating to commissions and leave it for the client to discover if they happen actually read the contract. Lawyers potentially keep you from going to jail or prison and possibly keep your X-wife from taking half of everything you’ve worked for your entire life. In a world of the best well intended and unlikely circumstances, there is no comparison on any level between lawyers and realtors, none.
Some people are...
@patmagic3301 I'm simply comparing the listing percentage (a point of contention) vs the lawyers percentage. Both are stated up front
lawyers in my state make $700 while Agents fuss that is somehow too much
Buyers will simply work with the listing agent (Dual Agency), it's as simple as that.
Dual agency is illegal in a number of states. And in the states where it is legal, there are many brokerages that do not allow it for obvious reasons. The reason we have buyer agency today is because of the dual agency debacle we had back in the late 80's, early 90's. I do agree that a number of buyers will buy direct from the listing agent not because they want to, but because they can't afford proper representation. It's sad.
Not necessarily "dual agency." I work only for one party at a time. If a buyer wants to be unrepresented, that's fine. I will certainly help guide things, but the buyer will be fully aware that I am not his/her agent.
THE SELLERS NEVER HAD TO PAY A BUYERS AGENTS COMMISSION!.There was never anything in writing on the contracts that said that a seller did not have to pay so they thought they had to .The agents would just say it is negotiable or your house will not sell if you do not lying being a salesperson stretching the truth They can sell it that is why you are listing with them you do not need two agents on one house.YOU DO NOT HAVE TO WAIT! SAY NO NOW to paying a buyers agents commission because you DO NOT HAVE TO.Everyone go to offering a small flat fee to agents NO MORE % COMMISSIONS to either.If everyone does that it will be the new law of the land.
I don't entirely understand what your saying, but the gist is that you think agents should be paid a flat fee. You can already do that today. I know of several agents that offer limited services for a flat fee.
@@brianfitzrealty The rest of the world doesn't have a corrupt system, and they mostly don't have buyer's agents. Buyer's agent will go to the same place where travel agents went: grave. Buyers will simply choose their home online and make offers directly to the seller's agent. That's how the rest of the world handles this (post Internet).
The Internet changes everything (except, in the U.S. because the system was rigged - violation of Sherman & Clayton Antitrust Acts).
She is saying she knows nothing about real estate and is uneducated or has problems with her typing
Isn't it true sellers never had to pay a buyers agent and still do not?
In most scenarios, the seller pays their listing agent and the listing agent agrees to share a portion of that commission with a buyer agent if they procure a ready, willing, and able buyer. In the event that there is no buyer agent, the listing agent keeps the entire commission. Sellers pay the same amount whether there is a buyer agent or not. That's why these lawsuits are ridiculous and NAR did a terrible job explaining that simple concept in court.
I believe WE, as agents, shall begin our own class action lawsuit. We are the largest trade organization in the US. WE have power to tell the truth. The TRUTH is there may be a few bad players... WHY upheave an entire industry that has been working for over 100 years. My sellers are still willing to pay out to a buyers agent. Since you asked what I think- this is a BIG shell game of putting numbers in different columns on a settlement statement. I'm ready to take them ALL on as the largest trade organization. Then maybe we can go after atty's who make 30-40-60% of a settlement. Seriously, they are concerned about 2-3%??? It feels like communism.
I think I saw something come through the news a few days ago that there are some agents filing a class action lawsuit against NAR. Not sure which state, but I definitely saw it. What a mess this is...
Perfectly said. Thank you. There are so many corruptions and manipulations in our justice system and in humanity. Right off the bat, I see this as paving the way for gazillion lawsuits among sellers, buyers, and realtors, swirling through the muddy water, walking on eggshells doing real estate and for fatten up lawyers and the top predators (upper food chain). God will shut down the entire house of cards. Please bring justice 🙏
After 36 years in this industry, I’m retiring. 😊
It's about to change a lot so probably not a bad time to get out. But those that can stick it out through this transitionary period, I fully expect to see business boom because so many agents are getting out.
NAR wasn’t representing their agents by not appealing the lawsuit.
It was all about self-preservation, not proper representation. Any real judge/jury would have seen that there is literally zero evidence of collusion and the lawsuit was bogus. Nothing we can do at this point other than carry on and serve our clients as best we know how.
Yes you are absolutely right…the selling broker owns the listing and compensation…how they choose to spend their compensation is up to them
Seems simple enough.
You are mostly right about the "intent" of the DOJ Brian. In the end, DOJ wants buyers to separately pay agents. It may be "legal" for sellers to sometimes pay but DOJ wants it to be rare. Similar to how lawyers are separately paid by plaintiffs, & defendants. Occasionally one party will pay both. You typically see this in divorce proceedings but there is no law where a loser in a lawsuit pays and it's customary for each party in a legal dispute to separately and independently pay their own counsel. This is the DOJ end game and they can "statistically" document if anti-competitive (Sherman Anti-Trust Act) violations are occurring just based upon the average, median and ways buyers agents are compensated in any given market.
Thanks for taking the time to share your thoughts! It's been 3 weeks since the changes went into effect and I'd say it's "rare" for buyer's to pay it. In the vast majority of the deals, the seller is either paying it directly or via seller concessions. There are also situations where the buyer does contribute some, but most is covered by the seller. It may vary from market to market, but that's what is happening here in Boston.
One avenue of this ruling is saying as it currently stands, the seller is the only one financially invested in commissions paid. If a buyer bring a certified check to closing, it will be difficult convincing him he has not contributed to both commissions and seller proceeds!!! Without buyer funds no one gets paid. The Buyer and seller both are financially invested in commissions paid!!!!!!!
Yup, that's been true for a very long time. Moving forward, it's going to be even more important to make sure that the buyer agent has his/her commission listed on the closing statement since it's separate from the deal.
The only people that are going to be getting paid out of those lawsuits on the attorneys, which is completely ironic.
Unfortunately the only people who won are the sellers. Buyers are completely screwed and unless lenders allow sellers concessions for buyer agent commissions, over and above what an appraisal comes in at, you're going to see a lot of lawsuits down the road.
Everybody thinks that they can go out and buy a house no problem, but that couldn't be further from the truth.
There have been countless times where I have kept a deal from falling apart by communicating with the buyer's attorney, lender, third party that was involved. Unless you have a savvy buyer, it's entirely possible that the buyer ends up in a more precarious position than they would have had they had representation.
The reason buyer agency exists today is because of all the nonsense that happened back in late 80's early 90's when the listing agent handled both sides. Feels like we are headed back towards that...
I can agree that lawsuits from the buyers' side are likely coming. This could potentially escalate into a significant battle between the two parties. I believe the real excitement is just beginning.
Unless they are able to consolidate the buyer lawsuit into the seller one, there is no way NAR survives it financially. This is why they should have fought through these fraudulent lawsuits to begin with.
It has never been sellers paying the buyers agent anyway ! The listing broker owns the listing and the agreed % the listing agent was able to get the seller to agree to pay their brokerage, the listing agent just says I am willing to share a % of our fees with the buying agent broker for the agent that brings us a buyer. So the whole thing is just crazy!
Agreed - this whole thing is utter nonsense. I still can't believe NAR decided to settle instead of fighting to get in front of a judge that would review actual evidence rather than a poorly educated jury that decided on emotion rather than the facts.
That is exactly how it is done in NC. We neg. the commission and then it's our choice how much we share in the MLS. We have to disclose to the seller in the Listing agreement how much we will be sharing but we do not have to wait on the seller to tell us how much they want to offer a buyers agent. Its never been done like that in NC. I have gathered from many of the videos I have watched on the subject that in some states the seller does dictate how much they want to give the listing agent and how much they want to give the buyers agent. I agree, it's crazy. And tonight I watched a video with Karen Carr and learned that the attorney that went up against the NAR in this case was a Personal Injury attorney. The type of attorney that sends you mail after you have been in an auto accident. Crazy.
@@brianfitzrealty and there is a LOT of that going on!
I LOVE KARIN! She's just as upset as I am about the poor defense team that NAR put together. Doesn't matter at this point, just gotta move on and keep helping clients as best we know how.
We keep talking NAR but what about the rest of the actual lawsuit? Numerous big brokerages are part of this lawsuit.
True, but all the brokerages are doing is following the guidelines that NAR sets. If NAR goes bankrupt, that will have huge repercussions throughout the industry. Without a Code of Ethics that everyone is adhering to, consumers lose. We are already starting to see all kinds of games that agents are playing that are no longer REALTORS.
Great content. UA-cam algorithm brought me here. Some audio engineer unsolicited advice: Your gain is really high on your mic. Rather than using high gain which picks up your breaths and exhales, the echoes from the walls, and changes the timbre to a muddy midrange muffle, try speaking more directly into your microphone and speaking more loudly and turning the gain down. Toward the end at about the 5:40 mark, your audio balanced out as you got louder and excited, which felt better on the ears.
Keep up the great work.
Thx for the tips! I actually have another YT channel that focuses on camera/audio and I'm still struggling to figure it all out. 🤣 This was my first attempt with the Mackie DLZ XS so hopefully will get it dialed in over the next few weeks.
@@brianfitzrealty No problem. :)
No extension... The judge has approved the settlement about a week ago
I covered that in my most recent video. It just goes to show that all of this nonsense has nothing to do with real change, and everything to do with personal injury attorneys getting rich. 🤣
glad i'm renting her in KS..
going to Subscribe and follow your R/E insights on this matter pls keep channel updated, Cheers..
Thank you! Will do!
So what you are saying oh well the sellers need to eat it. "None of it matters" the seller is going to get Less money for their home. You slimy relators make me sick.
It doesn't matter because the net result for the seller is that they are getting MORE money, not less. How is that slimy?
Slimy?? As a buyer you already come in with a down payment and closing costs. Now you have to pay a realtors commission as well. That's alot of money. You see, the doj ( the government) has just made it harder for you to buy a home. This is BAD for the consumer. With high rates and inflation, this just makes it worse...
It depends on who the agent is representing. In the first example you gave, the agent was representing the seller. It's the job of the listing agent to get the highest price and best terms for the seller. The same could be said for a buyer agent but in reverse (lowest price, most favorable terms). One thing we can agree on is that if these proposed changes do go through, it will 100% make it more difficult - and MORE expensive - to buy a home.
There is talk that the listing agent could add a supplemental document to the MLS listing that details both compensations. Not sure if this is possible! Guess we will find out in July.
I don't think that's going to happen. The DOJ is on the warpath to make it illegal for a listing agent to make any blanket offer of compensation anywhere. They want to completely de-couple the buyer and listing agent commissions. It will work no differently than commercial real estate where it's part of the offer. I also don't think anything will happen in July. There are too many lawsuits out there and it won't be settled by then.
Most likely the DOJ is monitoring this discussion and will stop any schemes to avert the law. An appeals court just ruled that the DOJ may continue their investigation of wrongdoing by your industry.
Great NAR stinks
The NAR Code of Ethics is necessary and comprehensive, but their operating procedures still need a ton of work. It still too early to tell if these proposed changes will have any meaningful impact on the way business is done.
Agree....NAR sneaky off MLS maneuver is now worst than before the 3/15/24 settlement
We're already starting to see no offer of compensation for buyer agent in my market. But if you call me, I got a deal for ya, off the record... Not sure how that's better than before for consumers - seems a lot worse to me.
So if an agent is not a member of NAR, does the settlement apply to them?
No. Only REALTORS are covered under the terms of the settlement. Independent agents and brokerages could be subject to future lawsuits, but that's unlikely to happen because this money-grabbing attorneys understand it's not worth the effort due to small payday.
You can get in line to get sued next! Up that E&O insurance
Hey Brian, thanks for this topic. I'm an agent in NY. Maybe you can explain this to me, I've tried with several colleagues and am curious what you and your readers think. Let's say I have a buyer who is taking out an FHA with minimum down - 3.5%. House costs 400k. The seller agrees to offer compensation to the buyer broker, commission is 2.5. So, the buyer gives the seller 400k and the seller pays out 20k in commission. My question is, didn't the buyer finance their broker commission ?
Good question! You've got it half right. In your example, the buyer is financing only their $10k buyer agent commission. The listing agent is getting paid $10k from the seller via sale proceeds. Not entirely sure how NY accounts for it on the closing statement, but it should be clearly spelled out on there somewhere. Hope that helps clarify!
@@brianfitzrealty yes, understood, however, what's the difference between what is already happening (buyer financing their buyer broker commission), and what is being proposed, splitting the two sides so the buyer pays their own broker? Blows my mind that the buyer's commission is being financed for 15 or 30 years, in some instances. It seems to me that they are already doing it. Thanks for your reply.
The math will be the same, but will look different on paper. Right now, the listing agent commission is shared with the buyer broker. Moving forward, there will be a separate line item on the closing statement that identifies the seller concession. What's crazy is that if the buyer opts to pay their buyer agent directly, that would not make it on to the closing statement. Even if the buyer does not pay the buyer agent, the attorney will still close since everything else is in order. In that scenario, if the buyer does not pay the buyer agent, the buyer agent will then have to sue the buyer for their commission. I can see a number of buyers claiming ignorance "oh, I thought it was part of the deal" and buyer agents getting screwed at closing.
The buyer is financing commission through the entire mortgage. In essence, the house and mortgage could have been $10K less if no buyer commission.
@@321bizdev_usa Nope. There is NO WAY a seller just gives up $10K. If there is no buyer commission paid, the seller keeps the $10K in that scenario.
why the multiple camera angles?
Why not? Keeps the viewer engaged through different perspectives.
@@brianfitzrealty I found it distracting, makes it hard to focus on the subject. But that’s me.
I think this may be the end of buyers' agents and we go back to the way it was 50 years ago with listing agents only. I think it's foolish to think buyers will sign any compensation agreement. Additionally, those seeking a VA loan can not pay their agent. So they can't sign the agreement.
VA is a big problem - and I still haven't seen anything that addresses it. There will be far fewer buyer agents in the future. Look no further than commercial real estate. How many buyer brokers are there? Not many - and the ones that are doing it, are very very skilled. It will be much more difficult to become a successful real estate agent which is good news for the ones that remain because of less competition and more market share.
NAR are vampires!!!
We want flat fees! No more % BS!
Great. You can 100% do that today. Interview several buyer agents and select the one that is willing to accept your flat fee structure and provide you with the level of service you expect.
@@brianfitzrealty I tried to buy my home without a buyer's agent in 2019. I called the seller's agent, and was told 'no'. Your industry is rigged and deeply corrupt.
I'm sure if an agent agreed to a flat fee they'd probably be tarred & feathered by your industry leaders.
Plenty of flat fee brokerages 😊
What exactly was the agent saying "no" to? Did you draft all the proper offer documents? Sign off on the lead paint disclosure? Any addendums? What about the seller statement of property disclosure? Was there an escalation clause? Any inspection/mortgage/pest contingencies? Was there appraisal gap coverage?...
Question, have you ever hired an attorney? Think about the percentage you paid him. and Have you looked at your detailed billing before the insurance company pays after you have went to the doctor? That is a great example of Flat Fees.