For Awareness - Moehrl v National Assoc of Realtors

4 Replies

I ran across this article, which may be of interest to many here: Class-action lawsuit takes aim at real estate commissions

The article contains a link to a PDF of the complaint, which is Moehrl v National Assoc of Realtors.  

This section seems to be at the heart of the matter:

"This method of setting the buyer broker commission is wholly different from the method that would exist absent the Buyer Broker Commission Rule. Absent this rule, buyer brokers would be paid by their clients and would compete to be retained by offering a lower commission.The Buyer Broker Commission Rule ensures that price competition among buyer brokers is restrained because the person retaining the buyer broker, the buyer, does not negotiate or pay his or her broker’s commission. In addition,the seller’s inflated commission offer cannot be reduced by buyers or their brokers, as Defendants also prohibit buyer brokers from making home purchase offers contingent on the reduction of the buyer broker commission.Real estate brokers handle most residential real estate sales in the United States.In a typical transaction, separate brokers will represent the seller and the buyer of a home.Both the buyer broker and seller broker(also known as the listing broker)are paid a percentage of the property’s sales price.Currently, total broker compensation in the United States is typically five to six percent of the home sales price, with approximately half of that amount—and increasingly more than half—paid to the buyer broker."

@Ryan Wamsat While I take this lawsuit seriously, it makes me laugh in some ways. I can't tell you how many times I've represented a Buyer and my commission has been reduced and I had to NOT press the issue, because it would have killed the deal.

In essence, I had to put the client's interests ahead of my own (which is what you're supposed to do).

Of course these are commercial deals, so the experience of residential agents may differ.

Can you imagine if buyers had to pay for their own representation like they do in pretty much every other industry? Talk about changing the landscape. 'Suzy, I see you are too broke to qualify for anything except a VA or FHA loan with 3.5% down. Welp, double that because you have to pay for someone to educate YOU and negotiate for YOU on YOUR behalf." LOL

I've only sold 2 homes with an agent.  The first was 3 states away so I has no choice.  The 2nd one it dawned on me how idiotic it is to pay for another person's jerk of an agent to negotiate against me.  I sell on my own now and buyers add their agent costs to the price.  2 had agents, one went solo.  But I'm just one nobody on a hill no-one cares about.

If nothing else, I'm glad this suit will make more aware of listing agreements requiring sellers to pay for their counter parties representative.  Assanine. If you need to be educated, pay for it yourself.

Originally posted by @Steve Vaughan :

Can you imagine if buyers had to pay for their own representation like they do in pretty much every other industry? Talk about changing the landscape. 'Suzy, I see you are too broke to qualify for anything except a VA or FHA loan with 3.5% down. Welp, double that because you have to pay for someone to educate YOU and negotiate for YOU on YOUR behalf." LOL

I've only sold 2 homes with an agent.  The first was 3 states away so I has no choice.  The 2nd one it dawned on me how idiotic it is to pay for another person's jerk of an agent to negotiate against me.  I sell on my own now and buyers add their agent costs to the price.  2 had agents, one went solo.  But I'm just one nobody on a hill no-one cares about.

If nothing else, I'm glad this suit will make more aware of listing agreements requiring sellers to pay for their counter parties representative.  Assanine. If you need to be educated, pay for it yourself.

 I don't use brokers and if someone insists on using a broker to buy one of my properties the price rises accordingly. 

Originally posted by Account Closed: I don't use brokers and if someone insists on using a broker to buy one of my properties the price rises accordingly. 

 At least there are 2 of us out there, Mike.  

I'm not opposed to the idea of someone paying their listing agent to specifically market their home.  A ton of people need the help and there are some great agents out there.  But why are they forced to pay for their future buyers' agent 2.5-3% as well? 

Agents/agencies will argue the 2.5-3% is negotiable, but its really not and only a tiny % of sellers change it. If they do, their listings will be ignored and avoided.  Collusion and a slap in the face to what being a fiduciary is supposed to be.

If buyers started having to educate themselves or pay out of pocket for THEIR agent,  they'd have a huge incentive to educate themselves and shop around. Can't have that.  

The 'it costs you nothing to have a buyers agent' argument would collapse as it should. That's total BS.   You and I both raise our prices when agents are involved as do the majority of sellers everywhere.  They have to. I always sell 6% less solo.  On my last home this saved the buyer $13k.