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As lawsuits over real estate commissions mount, many homebuyers and sellers are trying to figure out how much they need to pay their real estate agents.
The National Association of Realtors lost a Missouri lawsuit in November that argued its practices led to inflating real estate commissions. A jury awarded homebuyers covered by the suit $1.8 billion in compensation.
The behemoth trade group is now facing a growing number of other antitrust lawsuits about the practice requiring listing agents to pay buyers agents in the home sales process. As a result, the National Association of Realtors could see huge losses and some Realtor support.
Earlier this month, an Arizona home seller from 2021 filed a similar complaint against the state’s biggest Realtor associations and more than a dozen of its biggest residential brokerages.
Many real estate agents are getting more questions and pushback on commissions. But some think it could shake out inexperienced agents who aren’t helping buyers and sellers enough to call for 3% to 6% commissions.
“Price fixing is not happening, but now more agents don’t want to represent buyers and that will hurt first-time buyers,” said Christa Lawcock of Realty Executives. “It’s the lawyers who are going to make the money off the suits, not the people selling homes.”
Arizona commission lawsuit
Joseph Masiello filed an Arizona class-action complaint against the state’s big Realtor groups and brokerages, alleging antitrust violations because they “compel home sellers to pay inflated commissions to the home buyer’s broker, even though the buyer’s broker does not represent the seller.”
The suit also accuses agents, who aren’t getting a commission on a house, to steer buyers to homes with sellers who will pay a commission.
He sold an Arizona home in October 2021 through HomeSmart, which is a defendant in the case. Masiello was “required” to pay a 2% commission of $8,200 to his broker and a 2.5% commission of $10,250 to the buyer’s agent, according to the lawsuit filed on Jan. 5.
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HomeSmart declined to comment. The Phoenix and Scottsdale Realtors groups are defendants in the Arizona lawsuit, too. The Phoenix Association of Realtors said it would “respond to the matter through due legal process.” The Scottsdale Area Association of Realtors didn’t respond to requests for comment.
“The National Association of REALTORS maintains, and we agree, that the practice of cooperative compensation makes efficient, transparent, and accessible marketplaces possible,” the Arizona Association of Realtors, also a defendant, said in a statement. “Sellers can sell their home for more and have their home seen by a larger pool of potential buyers, while buyers have more choices of homes and can afford representation.”
Masiello is asking for a jury trial, like the case in Missouri. Also, the complaint is asking for class-action status to include homeowners who worked with a brokerage that used an Arizona multiple listing service to sell a home starting in January 2020.
His attorneys didn’t respond to questions or requests for comment.
The case is similar to the National Association of Realtors case in Missouri, which the real estate industry group just asked for a retrial on.
Who will pay commissions?
The real estate industry group’s legal challenges could change the home buying and selling process.
Greg Hague, CEO of real estate firm 72SOLD, said the judge in the Missouri case that led to a national lawsuit “will likely craft rules that mandate significant change in the U.S. commission structure, essentially resulting in sellers paying only their listing agent.”
And he said buyers will pay their agent if they want one.
John Wake, a real estate agent with HomeSmart, didn’t comment on the Arizona lawsuit but said the Missouri lawsuit could lead to sellers offering the multiple listing service to directly pay buyers’ agents without going through the seller’s agent.
“It will be pretty much status quo without the agent liability,” he said.
Lawcock said experienced agents charge commissions based on what they can do for buyers and sellers, including spending money on marketing, negotiating better prices, helping find the best financing, and inspectors and appraisers.
“You get what you pay for,” she said.
Bobby Lieb, associate broker with Launch Powered By Compass, said the current commission issues are driving inexperienced real estate agents, who got into the business during the pandemic housing boom, out.
“I am loving it because people will pay to work with experienced agents because we can sell homes faster and for more than newbies who don’t know an area or understand the market,” he said.
Reach the reporter at catherine.reagor@arizonarepublic.com or 602-444-8040. Follow her on X, formerly Twitter: @CatherineReagor.
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This article was originally published by a www.azcentral.com . Read the Original article here. .