Buyer Broker Commissions Go to Trial
On Monday, October 16, 2023, the Sitzer/Burnett lawsuit goes to trial. It’s expected to last about three weeks, with a verdict due by mid-November. The fundamental question is how buyer commissions will be paid in the future.
The plaintiffs are a group of home sellers from Missouri who are alleging that buyer agent commissions have remained artificially high because of the rules in place requiring home seller to offer compensation to the buyer’s broker.
While Anywhere and RE/MAX have settled their portion of the lawsuit, NAR, Keller Williams, and Home Services of America are going to trial.
KW and Home Services intend to show that they played no role in the activities relating to NAR’s Cooperative Compensation Rule. They also both deny that there was any conspiracy.
According to Real Estate News, “The industry is paying close attention to this case because of the wide range of outcomes if the plaintiffs prevail. The monetary damages could be zero — or mind-boggling sums that could cripple some defendants’ ability to do business.”
No matter what happens, you can probably expect the losing side to appeal. Stay tuned for more updates soon.
Zero Percent Commissions Are Now a Reality
Last week Anywhere announced the terms of their settlement agreement for the two bombshell lawsuits that sought to have buyer agents negotiate their commission directly with the seller and/or their own buyers.
Part of that settlement would allow listing brokers to post a zero percent commission for the buyer’s broker. Several days ago, NAR relented and said they would also allow agents to post listings on the MLS where there is a zero percent
commission for buyer’s agents.
What’s really surprising, however, is the seven major Anywhere brands will no longer require their company owned brokerages (franchisees will determine their own policies) to be members of NAR. This is a huge issue, and the ramifications could cause serious problems for NAR going forward.
The bottom line is that if you represent buyers, it’s time to become educated on how to obtain buyer brokerage agreements on every buyer you represent. The time to take action is now because you’re going to need these skills for the rest of your career.
Simple Tips for Creating Repeat Customers
An important way to maintain a successful book of business is to have repeat customers. The challenge today is the lack of inventory means people are now moving on average about every 9-10 years rather than every 6-7 years.
Here are some simple ways to expand your business with your past single-family residence clients.
- A small income property (2-4 units) can be a very smart investment for a variety of reasons. These properties are treated the same as single family properties in terms of their financing and down payment. This means they’re easier to purchase and may have higher returns than larger rental building that require more expensive financing.
- Another option is to buy a condominium for another family member such a child attending college. Roommates can cut down on the cost and there is also an opportunity for appreciation on the investment.
- Given the high number of baby boomers, housing an older relative can be another option. A duplex could also be a smart alternative for a parent who wants independence but still wants to be close to their adult children. Best of all, once the mortgage is paid for, an investment property can provide a retirement income for years to come.
Four Simple Tips to Improve Your Mileage
Gas prices are up again. If you want to improve your mileage and save money on your gas expenses, here are some quick tips.
- First, you can reduce your gas consumption by 31 to 37 percent simply by gently accelerating rather than gunning it.
- You can also save money by taking your foot off the accelerator as soon as you see a light ahead of you change.
- Slow down. It saves 12-14 percent in gasoline costs and you get the benefit of reducing your stress.
- Save 7-14 percent by using your cruise control. Humans don’t accelerate or decelerate as smoothly as a computer does.
- Finally, gasoline expands when it is warmer and contracts when it is cooler. Fill up in the morning where you will have fewer fumes and more liquid.
Bill Gates Got It Wrong in 2000 and He’s Still Wrong Today
In 1995, Bill Gates predicted that real estate agents would become obsolete by the year 2000 because people would purchase their homes on-line. Today, Gate’s prediction is still wrong.
According to NAR, only one percent of all buyers purchased a home without viewing it first. In fact, 81 percent of all buyers viewed the homes they purchased between two and six times.
Home buying is an emotional process for most people. Looking at on-line pictures can never duplicate the sense of what it’s like to walk through the property. When it’s time to purchase, close to 99 percent of us want to see what we are buying in person.