NAR Lawsuit Gains Class Action Status.
NAR. There’s a lawsuit against you, and it just gained class action lawsuit. Class action status. So I do have the article.
I’m going to reference that and we’re going to just discuss around this topic in the event that any of your clients start to ask you about it or you’re concerned about like, where’s a future, what’s going on?
And I’ll talk down some of these like rabbit holes of what could kind of happen with this whole thing. And they’re coming after your commissions in this situation, but not like actually you, but like maybe you. I don’t really know what’s going on.
So let’s go ahead and share the screen here and we’ll reference this article and drop it in for you.
So is your brain exploding agents? Brokers are all torn over this whole thing. So what’s going on? If we scroll down through the article and I’ll let Omar control that and scroll through as I discuss it, what’s basically going on here is there’s commissions, there’s a buyer and a seller, and then we have the buyer’s agent and the seller’s agent on both sides.
Right. And there’s a commission paid out in the typical situation.
So I’m not going to discuss the exact commissions or any of those things and have any violations here. But essentially what happens is when you do a listing, you agree with the seller on what’s going to happen with the commissions that there’s going to be X Commission offered to the listing agent and X Commission offered to the selling agent and you fill it in.
It could be a whole number, it could be a percentage, could be like, whatever these numbers are, you fill them in, there’s blanks for everything and it’s agreed to contractually.
Right. And you say this person is going to represent them in this person, going to represent them, and here’s how this is going to go. There’s all these boxes, you check these boxes and agreed to what’s going on. So the listing agent does that and inputs the data into MLS.
So what this lawsuit is claiming is that they should be able to go back and, you know, because the buyer paid an artificially high price for the home and their claim is the buyer paid an artificially high price for this for this for all properties over the last eight years, because the commissions are being paid by the seller and not by the buyer.
And with doing that, what happens is the prices are allegedly higher and they want all of the commission that was paid to the buyer’s agents, all of it over the last eight years, to be paid back to the buyer. So it’s a class action lawsuit asking for all that commission money back over the last eight years. Now, that would be like a crazy high number, right?
Imagine all the buyer agent commissions over an eight year time frame. And then how do they get that money back? And like how and why? Because there’s already, like, an agreement. Contractually. That said, the seller is going to pay this commission and here’s how.
And they entered into it and signed it all independently. And so this really goes down these weird rabbit holes, because if they let this actually happen and they sue. Well, I mean, honestly. Right. Think about this.
Over the last eight years, do you have 100% of all the money that you earned sitting in a bank account that like, oh, man, I thought I might get sued someday. I would just pay that all out. So, like, nobody has that money, right? So fundamentally, what are they trying to go after and how that works?
So then if you’re found liable, like there’s this class action lawsuit against all buyers agents, that the house is too high, like you have to pay this money back.
Well, then you would go after and sue. The cellar, right. And then the cellar wood. It’s just like this rabbit hole of, like, who sues who and like, who tries to get this money back. And then you would suit the seller would sue the bank because the bank over like this whole thing just goes in a circle of what’s going on.
And then do they really want all of the buyers to go unrepresented? Because essentially what they’re trying to say is that the person was represented and paid by the wrong party.
So they actually want everyone to be on the seller side and the buyers to be unrepresented in these transactions. Which kind of goes against all agency rules and what should really happen in this buyer’s agent situation. And then all of a sudden you’ll have all this discrimination because certain people won’t be able to pay this money for a buyer agent commission, and there’s going to be all types of problems.
So anyways, I reference this article for you and that’s put in the chat and you’ll be able to look at this article yourself and review it.
But it is something you should kind of stay on top of to see what’s going on. And I eventually think that it’s going to go away and nothing’s going to happen from it.
Everyone’s always trying to change the way things are going on, but there’s already been a contract agreed to. It was all signed off by every party involved and everyone knew the representation are getting. So going backwards, ensuing, maybe going forward should we change the rules? But I don’t think that anyone wants buyers unrepresented, right?
I don’t think they’re thinking that that’s in anyone’s best interest because then all of a sudden you have people that are making decisions on a purchase of X amount without any expertise and they represent themselves to save a couple of dollars.
And with that large of a purchase, somebody really needs to be on their side from this macro, from this big perspective, looking at it and helping them out, because we can’t have the most important purchase your life, you know, where there’s all these things open and it just create lawsuit after lawsuit because people will be unrepresented.
They’ll be like, Oh, you didn’t tell me this, and I didn’t know that. And then there’s a burden put on this seller to disclose even more and to show things and to educate the seller. Because the educate the buyer because the buyer can be like, I didn’t know anything.
And they’re just going to be claiming like ignorance. So all of a sudden you’ll be like an ignorant buyer, but yet always suing the seller for everything. And it’s going to create just like problem after problem and lawsuits.
And then they’re going to be like, I’m going to sue the bank too. And then the banks getting sued way more often than the bank is like, Whoa, I can’t be getting sued. I need to raise interest rates and not lend to people that are going to sue me.
So then it totally stops the movement of all homes and then they’re like, Fine, don’t finance it, pay cash for a sucker.
And then people are like, Whoa, I can’t do that. And then the whole economy falls apart and everyone lives in a bunker. Maybe I went too far. Anyway, it’s 9:00. Let’s get out of here.