In Part 7 of the real estate commission lawsuit series, we’ll take a look at plaintiff damages and who gets paid.
Front of the Line – the Plaintiff Lawyers – It’s the lawyers, always the lawyers. Some of them will make out like bandits they are! Hundreds of millions of dollars in legal fees and a huge cut of the damages award (30% minimum). Gazillionaires.
Right Behind Them – the defendants’ lawyers. They got to rack up a lot of billable hours and have a pipeline of work for years to come with copycat suits, appeals and the ongoing buyer suit.
Support Local – Local attorneys who will either chase the scraps leftover to sue anyone not covered by the settlements or will defend local brokerages and Realtors. A lot of cheese.
The Plaintiff Class – here’s the crazy part. All this fuss about protecting the public and in the end, according to one estimate, each successful home seller will get as little as $130. That doesn’t seem right. Did we blow up the greatest real estate marketplace for nothing?
Click Bait Media – the sensational and misleading headlines were horrific. But train crashes sell advertising.
Danger for Buyers – how will buyers, who struggle to come up with a down payment, also come up with buyer agent commission? Fortunately, Fannie, Freddie, FHA etc. have issued a directive that buyer agent commission will not be considered part of seller concessions.
Objections by Homeowners – a number of homeowners have objected to the proposed settlement as being too small.
Big Homebuilders – Pulte and other big homebuilders were sellers and are a member of the plaintiff class. I mention Pulte because they filed an objection to the proposed NAR settlement. They sold 28,603 homes in 2023 and want their cut of the settlement.
Why Big Homebuilders? – most big homebuilders I know have their own in-house sales team and write their own contracts. They also set their own buyer agent commissions. At the peak of the market, they often cut commission, sometimes all they way down to zero.
Indirect Pay Outs – agents score a small indirect win. They may no longer need to spend $800 a year to join NAR and hundreds more by not being compelled to join multiple MLSs. That’s a big chunk of savings for part-time and low producing agents.
Take a Moment – think about shareholders and owners of the large real estate brokerages. They stand to lose just about everything, for following rules mandated by NAR? Where’s that class action lawsuit – Realtors suing NAR?
Next, in Part 8, we’ll look at the future role for MAR and the MLS.
