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So I had a chance to read the complaint and I think they will have some issues showing collusion.
1) They state that most buyer brokers won't show homes with lower commission offerings and show high commissions first. While there are anecdotal comments on forums about this, I think they will have a hard time proving this statement. I know the data on my MLS doesn't show this to be true. In fact, often the higher commissions sit longer because generally, those really high commission offerings are on really hard to sell homes.
2) They state that buyer broker commissions would come down if the buyer paid it directly. I agree with this in the sense that there would be very few buyer brokers. Most people can't afford to pay it directly and VA doesn't even allow it so all VA buyers would have to represent themselves. It seems to me that buyers already look for companies that rebate commission to them so I think they are already looking at buyer brokers differently.
3) It also states that buyer brokers can't reduce their commission, but that isn't true in my MLS. I've reduced my commission before to try and get my client the house in multiple offers. Out here we can reduce our commissions voluntarily and just agree to waive what is offered on the MLS. We all just sign a compensation form with the new offering. Does your MLS not allow this? We are an indie MLS so maybe we are different?
4) They assert that most buyers find the home they want and then retain a buyer agent. That isn't the case here. Is that true where you are? Here buyers are interviewing buyer agents generally after they are preapproved and ready to get started. I don't even know how they would show data for that assertion. I don't think it is true.
5) They offer the commission structure for higher priced homes vs. lower priced homes yet act as if all the market sections are in seller's markets. Out here anything over $500k is a buyer's market, and not a seller's market.
I'm interested to see what data they are using to support the complaint because at least in my MLS, it would be easy to disprove their assertions.
Yeah, I looked through the points they are using as the basis for the lawsuit. I have a hard time seeing this go anywhere, not to mention nobody forces a seller to even higher an agent.
Hope they win. I've posted here numerous times that the system is setup for agents to "control the buyer pool".
The sell side was hammered down - now the buy side should be for those who want that option. System is rigged in favor of agents and against consumers in certain situations. One thing is for sure - millennials are not going to accept the old system as time goes on - no matter how entrenched it may be right now. that goes for real estate and other aspects of the economy they deem unfair.
Hope they win. I've posted here numerous times that the system is setup for agents to "control the buyer pool".
The sell side was hammered down - now the buy side should be for those who want that option. System is rigged in favor of agents and against consumers in certain situations. One thing is for sure - millennials are not going to accept the old system as time goes on - no matter how entrenched it may be right now. that goes for real estate and other aspects of the economy they deem unfair.
I have no issue with the current system. However, it's an industry that's ripe for disruption.
So you are saying keep the present model and just lower/compete on fees?
There are already models that offer lower fees. There are homes listed on my MLS that offer $1 in buyer agent commission. The seller does not have to pay more than $1, but they do need to shop brokerages.
There are already models that offer lower fees. There are homes listed on my MLS that offer $1 in buyer agent commission. The seller does not have to pay more than $1, but they do need to shop brokerages.
If listed at $1.00 why would one spend anytime on something they are not getting paid for?
If listed at $1.00 why would one spend anytime on something they are not getting paid for?
Why?
Because it just may be the house that fits the buyers' needs.
Then we work out compensation, if needed.
For almost all buyers, I have an expected compensation of 2.4% in our Buyers Agency Agreement. We discuss that you may have to compensate me for working with you on a listing paying less. You may need to make up the difference.
2.4% is the most common cobroke commission offered in my county. 93% of resales. So, I am right on the market in the agreement.
If you buy a property that is paying 2.2%, I probably shrug and say, "Let's do it." No problem.
But, if you are interested in a property that is offering a $1.00 co-broke commission, we will next, again, before writing the offer, discuss the point that you are probably on the hook to make at least some of the difference between $1.00 and 2.4% out of pocket.
The entire direction of the market should be to adopt the formality that each party pays their agent directly, that buyers can finance that agent fee, to eliminate the passing of buyer money to the seller, to pass to the listing agent, to pass back to the buyers agent.
Why?
Because it just may be the house that fits the buyers' needs.
Then we work out compensation, if needed.
For almost all buyers, I have an expected compensation of 2.4% in our Buyers Agency Agreement. We discuss that you may have to compensate me for working with you on a listing paying less. You may need to make up the difference.
2.4% is the most common cobroke commission offered in my county. 93% of resales. So, I am right on the market in the agreement.
If you buy a property that is paying 2.2%, I probably shrug and say, "Let's do it." No problem.
But, if you are interested in a property that is offering a $1.00 co-broke commission, we will next, again, before writing the offer, discuss the point that you are probably on the hook to make at least some of the difference between $1.00 and 2.4% out of pocket.
The entire direction of the market should be to adopt the formality that each party pays their agent directly, that buyers can finance that agent fee, to eliminate the passing of buyer money to the seller, to pass to the listing agent, to pass back to the buyers agent.
Same. Once I take on a client, I am obligated to represent their interest. Not showing or informing them of a property because I didn't like the co-broke would be a violation of the buyer agency and the buyer would have legal recourse against me if so desired. Plus, it's the right thing to do.
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