(WTNH) – A bombshell court ruling in the real estate industry could affect anyone buying or selling a home.
A jury deciding realtors have been conspiring to keep commissions high. We are Stretching Your Dollar with how that could impact what you’re paying.
A federal jury’s verdict threatens to shake up the real estate industry.
The jury found the National Association of Realtors is liable for $1.8 billion in damages for controlling the “multiple listing service” or MLS and for requiring home sellers to pay both the buyer and seller brokerage fees in a single transaction.
“As a seller of a home or a homeowner, you have to agree to make an offer of compensation to the buyer’s agent. That’s the only way you can list it. They have a stranglehold on the data,” Plaintiffs Attorney Michael Ketchmark said.
Ketchmark is one of the lead attorneys in the Missouri class-action case.
“There’s no reason that home sellers should be forced to pay a buyers agent. It doesn’t happen around the world. The only reason it’s happening here is because the National Association of Realtors and these corporate real estate companies are enforcing this rule. It’s not right and it’s against the law,” Ketchmark said.
The federal jury agreed, but real estate agent Jogh Flagg said home sellers routinely become buyers again and then benefit on the other end.
“When you’re going to buy a house, it’s reversed. You get a free ride one time and the other time you get to pay,” Flagg said.
It’s big money commissions paid for by the seller and then split between buyers and seller’s agents can be as much as five or six percent of a property’s value.
The Missouri ruling could do away with that split, potentially upending how real estate agents have done business for decades.
“So what happens after this is kind of confusing. We don’t know yet, in other words, what the effect of this decision will be,” Host of Yahoo Finance, Julie Hyman said.
So this is something to watch for sure and even ask about if you’re in the buying or selling position.
The National Association of Realtors plans to appeal the decision. The Just Department is also looking into the issue, which could take years to resolve.