The END of Realtors | NAR LOST $1.8 BILLION LAWSUIT
Transcript:
hey up guys John here the entire real
estate industry is about to go through a
massive overhaul I’m talking possibly
1.5 million real estate agents losing
their job the National Association of
Realtors about 45 minutes ago lost the
lawsuit for 1
b780 million suing all the real estate
brokerages that are essentially
Associated to the National Association
Realtors they’re in big trouble and if
they don’t pay up fines could double
fines could double I’m going to show you
what’s going on because this is soon
getting pushed to a national level to
where all of the this all of this that
we’ve been used to in the real estate
industry go on Zillow you find a real
estate agent you list your home for sale
all of that could be changed please hit
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this so Missouri jury finds National
Association of realtor brokerages guilty
of conspiring to inflate
commissions look at this defendants have
been ordered to pay damages of
1.78 billion treble damages could result
in the National associations and
brokerages paying more than twice that
amount think about that $4 billion in
Damages right it also opens a door for
additional potential class action
lawsuits being filed in other states you
have to ask yourself if you’re in a real
estate market like what we were in 2020
2021 where a lot of home buyers probably
overpaid in a lot of markets now they’re
looking at the economy things are
changing you know banks are laying off a
lot of people are losing their jobs
interest rates are record highs people
are in you know a different a different
position than they were a couple years
ago looking at the real estate AG like
hey my real estate AG be 20 grand
finding me a property on Zillow right
maybe I should join the class action
lawsuit there’s going to be millions of
people thinking that thing thing as well
they’re going to be thinking that hey my
real estate agent I paid 20 grand for
them to find me a property on Zillow or
hey I listed my home for sale I sold it
for a million dollars it got a great
price but I had to pay 6% or 5% I had to
pay $50,000 to to sell that property
maybe you want to sue the brokerages
maybe you want to join this action
lawsuit right it might sound far-fetched
but that’s what they are pushing for
they’re pushing for this so if this does
happen you can just imagine the amount
of restructuring that will change the
entire real estate transaction
all this is underway they go on to say
the jury reached its verdict a little
after two weeks ago two weeks of
testimony from the plaintiff so again
the jury reached their verdict a little
after two weeks of testimony from their
plaintiffs and defendants during their
testimony the home seller plaintiff and
the lead attorney Michael argued that
despite the defendants having antitrust
rules and regulations in place the trade
group and corporate brokerages knowingly
violated their own rules in order to
maintain High commit rates you have to
ask yourself too imagine you’re selling
a home for a million bucks nowadays
that’s not the Mansion anymore it’s like
a nice upper middle class neighborhood
right a million dollars you pay 25,000 2
and half% to the buyer’s agent 2 and
half% pay 25,000 to a buyer’s agent to
negotiate against your best interest
they want to negotiate against you
during inspections all the problems that
come up on the house there’s no perfect
house they want to hammer you they want
you to pay twice they want you to pay
their Commission and they want you to
reduce your price to represent their
buyer their interest it might not make a
lot of sense a lot of people would argue
so when they are going in this direction
you just have to take into consideration
how many transactions were done over the
last couple years talking about 40% of
all mortgages in America were taken out
between 2020 and 2021 so if they go back
five years just imagine it’s like almost
every home in America has recently
traded right so you’re going to look at
a lot a lot of problems that are be
coming to this real estate industry
judge Steven burrow who is overseeing
the suit still needs to issue his final
judgment on the case before the verdict
has final he has wide latitude in
injunction relief in a worst case
scenario the defendant’s burrow could
ban The Cooperative compensation rule
nationally on the multiple listing
services which would prevent listing
agents and home Sellers from
predetermining buyer agent commission
rates listing agents would have
prohibited from sharing commissions with
Buyer Agents and buyer agent commission
rates would not be published in the MLS
the multiple listing
service alternatively brough said could
also keep elements of the rule in place
and require an offer of at least one
cent in Cooperative compensation at
least one cent the class action lawsuit
which is originally filed in 2019
included Remax and anywhere anywhere
real estates essentially all the big
brokerages I mean they own they own the
entire market share uh as defendants
however the two it’s a conglomerate the
two reach settlements in the suit as
well as two other common
lawsuits darl frost a spokes personer
Keller Williams said that crucial
evidence was not allowed to be entered
and alluded to an appeal being filed we
are disappointed that before the jury
decided the case the court could not
allow them to hear crucial evidence that
Cooperative compensation is permitted
under Missouri law you can see the bias
you can see what’s happening here
whether you agree with it or you
disagree with it you can see the
direction that the court seems to want
to take and that’s going to be against
the real estate industry he said in a
statement following a verdict this is
not the end Keller Williams followed the
law regarding Cooperative compensation
and stands by the evidence presented on
the hundred-year-old practice of sellers
agents offering commissions to other
agents who help market and sell their
homes looking forward we will consider
all options as we assess the verdict and
trial record including Avenues of appeal
a spokesperson from Home Services vowed
to appeal the ruling in Missouri today’s
decision means that buyers will have to
face even more obstacles in an already
challenging real estate market and
sellers will have a harder time
realizing the value of their home well I
don’t know about that I really don’t
know about that my belief and I was a
real estate agent for 10 years in
Beverly Hills from9 to 2019 90% of
Agents 90% of Agents Supply very little
to no value 10% of Agents supply all the
value they’re the ones that are out
there trying to find Pock listings and
off-market deals they’re the ones that
are out there you know really doing the
Dirty Work finding a property that could
possibly be rezone they’re doing
whatever they can possibly do to try to
put that buyer in a really really strong
position or maybe a seller they’re
trying to you do the same exact thing
and you know negotiate against all the
other offers to get them the best offer
and then really take care of their
clients that’s about 10% of Real Estate
agents so but for 90% of them they don’t
really Supply the much value and so
that’s the fact that is the truth that’s
what I’ve experienced and I’m sure
that’s probably what you’ve experienced
as well and so when when with all that
taken into consideration you look at
this Market falling in a lot of markets
3 five 7 10% of the purchase price has
already been eroded due to the change in
mortgage rates and change in real estate
market do you think that a lot of people
are going to lose value by not being
able to hire a real estate agent or do
you think that we’re going to see a lot
of new Services come on board now
there’s been a lot of discount
brokerages and all that stuff that have
been intent in the past many of which
have failed for a variety of reasons but
to to say that someone if they listed
their home on Zillow themselves they
hired a you know a great photographer
took pictures and listed on their home
you know on Zillow themselves that they
would have a poor poor outcome I’m not
sure it wouldn’t actually surprise me if
a a popup shop came on and said hey look
we’ll send you the photographer we will
have an expert negotiator maybe they
have someone like a hostage negotiator
that’s actually doing the negotiations
in volume and uh we handle the
negotiation and it runs like a Mill and
we offer a discount service or a flat
fee upfront fee or something like that
that is you know maybe they pay 10,000
Upfront for the service right it would
not surprise me to see all these uh all
of these new popups come out to try to
uh to dismantle the real estate industry
and take advantage of this change I’m
not saying any of it would work but I’m
just simply saying there will be
something that will come if this does
happen and most real estate agents do
not supply that much value many do 10%
is a lot you’re looking at you know 1,
560,000 real estate agents in America
150,000 real estate agents that are
supplying a lot of value it’s a lot of
value but you know when you look at the
difference you know a million four that
aren’t a lot of disruptions coming uh it
could also Force home buyers to forego
professional help during what is likely
to be most complex and consequential
financial transaction they make in the
lifetime well home buyers agents are
compensated on completing the sale not
on getting the buyer the best deal for
me you know if I had no experience and I
was going to buy a house I would not the
last thing I would do is call a Coldwell
Banker or Keller Williams or one of
these brokerages speak to the real
estate agents that’s sitting on the
floor which is the person that is
answering the phones and ask them I want
to buy a good deal what they’re going to
do is they’re going to pull up the MLS
and they’re going to take me in a
neighborhood and say this is a good
property you should buy this and then
you buy this property and uh and you
overpaid for it and and uh and they just
basically made an easy commission off of
your lack of Education right you want to
be able to go in there and have the
knowledge be able to go on there and and
know what you’re doing so to say that
you’re going to rely fully on a buyer’s
agent to make the decision uh a lot of
smart buyers aren’t doing it that way a
lot of smart buyers are doing their
homework doing their due diligence
they’re really putting in the work
before they go out there and decide okay
yeah I’m going to go buy this real
estate transaction so when you’re
looking at all this they say home
services and Cooperative compensation
rule help ensure millions of people
realize the American dream of home
ownership with the help of the real
estate
professionals I’m not sure about that
I’m not sure some of them definitely
again I want to really elaborate on this
I think a lot of real estate agents
create a lot of value but I think most
of them do not I think most of them do
not and I think that when we look at
this changing real estate market a lot
of people in America uh you know
everywhere in the world whenever you
know we walk into a world of problems
it’s very very seldom they point the
finger in the mirror and say the problem
was me making the bad decision the
problem was me overpaying for this
property the problem was me the problem
is always someone else the problem is
always you know pointed outward at other
people that are the net result of the
bad situation that most people are in so
when you look at this situation I have a
feeling that a lot of people are going
to start pointing the finger at Realtors
um and from the conversation that
they’re having here saying that we are
uh you know they’re going to appeal it
and they didn’t even want to listen to
what they’re saying to me it’s saying
signaling big changes coming what do you
think drop below uh hit the like button
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