The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.
Each week on The Download, Inman’s Christy Murdock takes a deeper look at the top-read stories of the week to give you what you’ll need to meet Monday head-on. This week: Breaking down the aftermath of that $5 billion verdict in favor of the plaintiffs in Sitzer | Burnett.
While we’d been hearing for months that the commission lawsuits were likely to find in favor of the plaintiffs, it seems that no one was truly prepared for the reality of a $5 billion award. Only then did people start asking, who’s going to pay for this?
Then the next lawsuit was announced, on the same day, no less, and targeted some of the usual suspects (ahem, NAR, ahem) as well as a slew of newly named defendants: Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna Real Estate, Douglas Elliman, along with the National Association of Realtors.
It’s early days yet and we’re still figuring out what all this is going to look like — for the industry at large and your business in particular. In the meantime, stay with us so you can keep up with all of the latest as it unfolds, along with expert analysis from our staff writers, contributors and featured industry experts.
In live reporting from the Kansas City courtroom, Andrea V. Brambila broke the news that the federal jury in Sitzer | Burnett had found in favor of the plaintiffs and against the National Association of Realtors and a group of major real estate companies in the antitrust case designed to prove a conspiracy to inflate real estate commissions, to the detriment of homeowners.
The suit, representing approximately half a million Missouri homesellers, sought reimbursements for $1.78 billion in commissions paid to buyer brokers. The jury’s award was tripled automatically to $5.356 billion.
The verdict was unanimous and delivered after only 2.5 hours of deliberation on Tuesday morning.
Ironically, the case was decided just one day before Inman’s virtual Connect event began, offering the opportunity for Brad Inman to hold an impromptu round table. This week on The Download, we’re looking at reactions to the verdict and thinking ahead to possible consequences.
‘A new age’: Brad Inman, panelists unpack the Sitzer | Burnett verdict
During a live session Wednesday at virtual Connect, Brad Inman moderated a panel with eXp team leader Kendall Bonner and Collabra Technology CEO Russ Cofano on what lies ahead for agents as the commission model is upended. In the session, Inman put the blame squarely on NAR and the real estate franchise companies.
“They failed,” said Inman of the defendants in the trial. “A jury found them guilty of failing, and now the members are going to pay for these shenanigans. It’s shameful.”
EXTRA: Redfin CEO: With commissions in peril ‘cooperation may
Exemplary agents will see commissions grow: NextHome CEO
In an interview with author, trainer and longtime Inman contributor Bernice Ross, NextHome CEO James Dwiggins points out that the final chapter of the bombshell commission lawsuits hasn’t been written. Find out what you need to know to plan ahead and look back at Dwiggins’ rather prescient predictions pre-Sitzer in his previous interview with Ross: What’s next if NAR loses those bombshell lawsuits?
Realtor.com chief: Buying without an agent was ‘terrifying’
Before he moved to the U.S. and before he became CEO of Realtor.com parent Move Inc., Damian Eales lived in Australia — where he repeatedly bought and sold property. In his Inman Connect conversation with Brad Inman, he lauded the American system of having agents representing buyers and sellers, but said that change is likely coming thanks to lawsuits and the DOJ.
The Sitzer verdict is in. Here’s how to protect your buyer commission
There’s already a perfectly simple solution to defining your commission and communicating with buyers about it, writes St. Paul, Minnesota, broker-owner Teresa Boardman. “Buyer representation contracts are nothing new, and they should not be feared.” Boardman writes that she “can not imagine why anyone would want to work with a buyer who isn’t under contract.”
EXTRA: NAR CEO Bob Goldberg to retire early after ’emergency meetings’
Christy Murdock is a freelance writer, coach and consultant and the owner of Writing Real Estate. Connect with Writing Real Estate on Instagram and subscribe to the weekly roundup, The Ketchup, in either newsletter or podcast form.