Another week, another copycat lawsuit regarding real estate broker commissions! The latest was filed on Feb. 16 in Nevada, marking the second filed in the state this year.
According to combined media reports, the new lawsuit involves Andrea Boykin, who sold her Las Vegas home for $525,000 in 2022 – but two years later, she feels the 5% commission totaling $26,250, was the result of an industrywide conspiracy designed to force home sellers to pay inflated commission fees.
Boykin’s lawsuit cites 22 defendants including (who else?) the National Association of Realtors plus eight brokerages – The Agency, BHHS Affiliates, Compass, Douglas Elliman Realty, eXp, HomeSmart, Realty ONE Group and Redfin – plus Nevada Realtors, other local realtor trade groups and a pair of multiple listing services. Whaley’s lawsuit claims the defendants ran afoul of the Nevada Deceptive Trade Practices Act and it seeks class-action status on behalf of Nevada home sellers who listed a home for sale on one of a state-based MLS during the past four years and who paid a buyer broker commission with any of the brokerages named as defendants.
Boykin now resides in Minnesota. The lawsuit doesn’t explain why she waited two years to seek legal action regarding her home sale.
Last month, another Las Vegas resident named Nathaniel Whaley filed a lawsuit where he complained about the “substantial” $40,250 commission he paid to the buyer’s broker on the $805,000 sale of his home in April 2022. The total commission charged on that transaction was 5%, with 3% of the sum paid to the buyer’s broker. Whaley cited NAR’s Buyer Broker Commission Rule as a conspiracy that inflated broker fees.
“The United Kingdom, Singapore, the Netherlands, Australia and Belgium, the average commissions is between 1-3%, and here we’re typically 5-6%,” said Ben Lehavi, one of Whaley’s attorneys. “Home sellers must increase their sale price to cover the cost of inflated commissions. This raises the price of homes for all homebuyers at a time when unaffordability is already at record highs.”
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Buyer Beware. They could have tried negotiating a lower commission. No one forced them to use that particular broker. No doubt they were impressed.
IMO the Sellers that had signed a listing agreement and KNEW how much commission was being paid. The Sellers should have negotiated the commission at that time, NOT 2 damn years after they sold the property. These frivolous law suits are doing nothing but costing tax payers money.
When siting the 1-3% commission for the United Kingdom, Singapore, the Netherlands, Australia and Belgium; you are not identifying who that commission is paid to? But are comparing it to the commissions paid in the US as 5-6%.
You need to clarify who the commissions are paid to! Both RE agents or a RE single agent!
Is it the total commission charged on a property on those countries outside of US.
In the US the average total commission paid on a single property is between 3-6% negotiated and agreed upon with the seller before the property is listed for sale! That total commission is split between both real estate parties involved in the sale. Which means each side of the RE sale gets 1-3% commission.
There are costs incurred by both RE parties. Costs associated with advertising , contract administration, legal compliance, photography fees, property staging, negotiations between real estate parties involved, coordinating the parties involved with preparation of documents and title searches and dead clearance, mortgage activities monitoring and closing completion. Not to mention the time of the RE professionals involved in the transaction and transportation costs!
These are unseen activities that are integral to getting the property sold.
When siting the 1-3% commission for the United Kingdom, Singapore, the Netherlands, Australia and Belgium; you are not identifying who that commission is paid to? But are comparing it to the commissions paid in the US as 5-6%.
You need to clarify who the commissions are paid to! Both RE agents or a RE single agent!
Is it the total commission charged on a property on those countries outside of US.
In the US the average total commission paid on a single property is between 3-6% negotiated and agreed upon with the seller before the property is listed for sale! That total commission is split between both real estate parties involved in the sale. Which means each side of the RE sale gets 1-3% commission.
There are costs incurred by both RE parties. Costs associated with advertising , contract administration, legal compliance, photography fees, property staging, negotiations between real estate parties involved, coordinating the parties involved with preparation of documents and title searches and dead clearance, mortgage activities monitoring and closing completion. Not to mention the time of the RE professionals involved in the transaction and transportation costs!
These are unseen activities that are integral to getting the property sold.
The listing agreement is a valid contract negotiated between the seller and listing broker. The broker fulfilled the agreed upon contract
What if the buyer has remorseful feelings that he paid too much for the house? Can he sue the seller for overpricing the home?
These frivolous lawsuits should be stopped. If the owner had attempted to sell the without a professional broker the buyer would have offered 5% less than the asking price because he knows the seller didn’t pay a commission. Buyers are not stupid and realtors are not working for free.
Sellers and their attorneys jumping on the band-wagon. Pandora’s box has been unleashed. What these sellers don’t realize (or care to realize now, because they’ve already sold and are just focused on getting money back) is this simple fact. If no compensation was offered to the buyers broker, a buyer’s broker would 1: Present an offer that includes compensation anyway for themselves whether or not the price would be negotiated upward or 2: Present a higher priced offer just to turn around and credit the commission because many buyers aren’t in a position to absorb this additional expense. Buyers are already having to cough up the down payment, closing costs and an inflated market. Old saying, “six of one, half a dozen of another”. It all pencils out the same in the end.
Can we get more details about the plaintiff’s case?
Commissions are spelled out in the listing agreement & purchase contract – no wool being pulled over anyone’s eyes. These lawsuits have a funky smell. What’s really going on? The banks, large corporations want a piece of the action, have to get rid of realtors, drive them out of business by reducing their commissions, overwhelm them w lawsuits & legal fees, reduce number of home buyers (they cant afford to pay commissions), soon AI technology will take over real estate sales, sell/buy a home online, contracts will be digital, money too. Pay attention people!
This crazy real estate market is not being driven by greedy real estate agents…..it’s being driven by cash buyers who are willing to bid “up” on the property they want. In some cases almost $100K over the asking price. I’ve been a real estate broker for over 30 years and I’ve never seen such a competitive market……. and I’ve never heard of a seller rejecting an offer because it was too high…… They are very willing to take the money and run. With most sales it’s a co-broke……thanks to state Multiple listing services, Realtor.com, and Zillow, a seller’s home/property gets a lot of exposure. If a brokerage didn’t subscribe to MLS it would probably take months to sell a property and a lot of the seller’s money spent on advertising in multiple publications.
More lawfare to ruin the Real Estate market like they ruin everything else. The fees are negotiated up front and the seller is provided a net sheet to show the amount taken out. When you look at it the buyer pays the commission in any case because they are taking the loan on the house. They don’t want any independent Brokers or agents, Doctors, Truckers, Tradesmen, or any business.
Communism is here.
A home purchase or sale is one of the biggest transactions in a person’s life. Each party should be represented by a knowledgeable, ethical and experienced professional real estate agent/broker.
I don’t want a cut rate doctor, builder or
electrician and I certainly don’t want a cut rate real-estate handling my re estate transactions. There are so very many moving parts involved. If Realtors charged by the hour, plus their real expenses it would be more than the 2% this Nevada seller agreed to pay. The 3% that the seller agreed to pay an agent who brought a qualified buyer earned their 3% by getting the buyer closed. Would this Nevada seller have reduced his home by 5% and muddled through getting it sold without a Realtor? She was happy to take the highest profit she could get. Commission s are negotiable and so are services provided. The real-estate industry definently needs oversight through licensing laws and education requirements. If you ad a seller or buyer are not getting the service you contracted to pay then cancel the contract. But don’t sign up, take your profit and then whine.
A home purchase or sale is one of the biggest transactions in a person’s life. Each party should be represented by a knowledgeable, ethical and experienced professional real estate agent/broker.
I don’t want a cut rate doctor, builder or
electrician and I certainly don’t want a cut rate real-estate handling my re estate transactions. There are so very many moving parts involved. If Realtors charged by the hour, plus their real expenses it would be more than the 2% this Nevada seller agreed to pay. The 3% (that the seller agreed to pay an agent who brought a qualified buyer) earned their 3% by getting the buyer closed. Would this Nevada seller have reduced her home by 5% and muddled through getting it sold without a Realtor? She was happy to take the highest profit she could get. Commission is negotiable and so are services provided. The real-estate industry definently needs oversight through licensing laws and education requirements. If you as a seller or buyer are not getting the service you contracted to pay then cancel the contract. But don’t sign up, take your profit and then whine.
In our market the lack of supply is what is driving the prices higher. It’s simple we have more buyer demand than we do houses and when buyers compete prices are driven up. Prices are not driven up because of the RE commission. I’m not in Nevada and familiar with the Nevada Deceptive Trade Practices Act so it will be interesting to see how these sellers were deceived. Our listing contracts clearly state the commission amount and that it will be split with a buyers agent.
The issue that caused NAR to loose the $1.8b lawsuit in KC was the plantiffs claimed it is a standard requirement that home sellers pay a 6% commission that is split between their own agent and that of the buyer and compliance with the Realtors association’s rule is required for properties to be listed on the MLS, which are regional databases of properties through which nearly all homes are sold, constituting a restraint on competition. The clear cooperation rule is what is at the heart of the lawsuit and the problem for NAR.
That’s fine
Any of you the real estate Broker talked and mentioned anything about your fees and commission split and EOfee .and MLS and the annual fee for the association wich are going up .
Anyone spoke up to reduce the fees$$$ since they are suing and going after your commission %
Brokers …Agents rise and speak up
I dont know why they dont. We were all fools to ever give our MLS data to companies like ZIllow, Redfin and all the rest.