On Nov. 6th 2023, a federal jury reached a verdict of $1.8 billion against the National Association of Realtors (NAR) and major brokerages, including Keller Williams. This lawsuit, known as the Sitzer/Burnett Case, may raise questions. So let’s delve into the details, assuring you that our commitment to your real estate journey remains steadfast.
Your Advocates in Action: Understanding the Realtor Difference
This lawsuit centers around the requirement under the National Association of Realtors to provide a cooperative commission to the Buyer’s agent. The plaintiffs argued that this rule resulted in Brokerages colluding to maintain or inflate commission rates. NAR and the other defendants argued that cooperative compensation paid by the seller gives the greatest number of buyers a chance to afford a home and professional representation. In the first phase of this legal development, a Missouri jury sided with the plaintiffs in this civil case. This judgment has forced NAR to change its stance to reflect that an offer of cooperative compensation is not necessary, and the defendants must pay damages.
Looking Ahead: Your Realtors, Your Stability
With this verdict expected to go into multiple rounds of appeals over time, rest assured that your real estate professionals remain committed to your best interests. Your agent is still here to represent you both on the buying and selling sides. Even with this change, it is still advantageous for many sellers to pay the buyer’s agents commission. While we may see some changes over time, we don’t expect this to be like a light switch. Just as before the lawsuit, it is always valuable to have an open and transparent conversation with your realtor about how they are paid and the value they can bring to this process.
Behind the Scenes: Your Realtors’ Role in Your Journey
Critics may attribute housing price concerns to realtor commissions, but let’s consider the broader context. The larger picture involves a complex interplay of government spending, rising wages, material costs, and land shortages driving affordability challenges. Amidst this complexity, your real estate agents emerge as your trusted guides, navigating you through the intricacies of real estate transactions. This practice has been in place for decades so the influence in prices in today’s market is negligible.
Unseen Heroes: Your Realtors and Your Home Dreams
In the midst of this legal narrative, we want to acknowledge the crucial role your real estate agents play, especially for those dreaming of their first home. For clients who may lack expertise and upfront funds, your realtors step in as trusted allies, offering guidance and support.
Most first time home buyers are leveraged in their purchase, meaning they use a home loan to buy a property. If that buyer now has to pay their realtor, that substantially reduces the amount that they might pay to the seller instead. If a buyer were to purchase a home with 20% down, $10,000 would help them obtain $50,000 in financing. The buyer now pays the commission directly, they now have to offer the seller $50,000 less to cover that cost out of pocket. At this time, lenders do not allow buyers to finance commissions and the average buyer does not have a lot of extra cash and is putting all the cash down as part of their down payment.
Closing Words: Your Realtors, Your Trusted Partners
As the narrative continues to evolve, remember that your realtors are not just navigating the changes but are your trusted partners in this journey. The commitment to fairness and empowerment shines through, promising a future where your real estate agents continue to be steadfast allies. Stay tuned for the unfolding chapters – because, in this story, you are at the heart of it all.
