Keller Williams announced it has agreed to a $70 million settlement in the Sitzer/Burnett lawsuit that challenged the commission structure of real estate professionals.
Company founder and Executive Chairman Gary Keller announced the settlement in an internal email, stating this agreement “releases individual agents and franchisees from copycat litigation filed in the wake of Sitzer/Burnett.” He added the decision was reached to protect the company from an extended and expensive future in courtrooms.
“We had full confidence in the strength of our appeal,” he continued. “But we also knew the appellate process could be long and unpredictable – and that our franchisees and agents would have no protection and complete uncertainty while that process played out over time. Our Keller Williams family needs and deserves protection now, not later.”
The terms of the settlement were not disclosed, although the company is reportedly seeking a deal similar to the ones achieved by Anywhere Real Estate and RE/MAX. HomeServices of America and the National Association of Realtors are the remaining defendants in Sitzer/Burnett lawsuit that have not agreed to a settlement.
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They should reverse the system and give the greater percentage of commission to the selling agent, who really does all the work. It’s too much compensation for the listing agent.
I have never thought the structure was fair.
Maybe in your world, Sweetheart, but never in mine. You should be ashamed. A good listing agent works just has hard as a good selling agent.
Walt,
I totally agree with you. It is the listing agent that uses his or her resources to bring the property to market. Do the marketing helping to set pricing and provide valuable insight to the property and his client. Without the Listing Agent there would not be an opportunity for the Selling agent.
Why does everyone think that all a listing agent does is list, show, and sell the home? There are so many steps in between. Submit contracts and all supporting documents to attorneys for Attorney Review. Schedule and be present for home inspection, negotiate any problems that come up with the buyer and their agent. Then set up and be present for the Certificate of Occupancy and Fire Inspections, and have the buyer fix or credit any items that may come up, while keeping the seller’s agent, title company, and attorneys aware of what is going on. Finally when all that is “ironed out” the walk through is scheduled and the closing can take place. Keep in mind this scenario is for the perfect sale. There are so many other variables that can and most times do take place. I for one do not think any of the agents deserve a bigger commission than the other. If everyone does their job both agents are putting in equal time to ensure that their client gets the best deal possible and all bases are covered. When I hear someone say “I guess I’ll just get my Real Estate license and become an agent. I smile to myself and say “if it was as easy as you think everybody would do it!”
Bravo ! Spot on!!
Nailed it!
Exactly
I totally agree, it’s a lot of work on both sides.
Buyers agents who don’t see how much work listing agents have to do must have NEVER listed a home for sale
Thank you Walt.
Absolutely! I agree 100%. In some cases the listing agent has to help selling agent to get the deal closed.
That is true. I done it many times out of 18 years
Amen!
The listing agent provides all the marketing expenses for term of the listings, time for Open Houses, providing updates keeping sellers happy, meets inspectors, buyers, agents appraisers, contractors, and the buyers purchasing for measurements, negotiation with both parties while selling agent knocks on the door, Really??
Not sure the use of “sweetheart” is politically correct, and it’s absolutely unnecessary. I’m sure you wouldn’t address a client with that term.
True, where else do your front money with no means of retrieving if they decide to go to another company.
Absolutely! The listing agent spends time & money, staging, photos, print materials, negotiations, inspections, has the stress of getting the home sold……and keeping the seller happy. And depending on the listing you to have be at every showing as well.
I have buyers and sellers and the bottom line is Real Estate is not an easy job. It is 24/7.
Totally agree, amen to that!
Walt, you’re the one in today’s society that should be ashamed. Are you serious calling someone sweetheart? In your world you may think it’s ok, but not in today’s world. A good listing agent should do their due diligence and never put in listings sellers agent to verify all information. That happens way too often.
Respectfully disagree. It takes to get a listing. The seller gets to pick listing agent, in most cases. I personally think the lawsuit was the typical shakedown because the public and shady characters do not like people making money. I was a Realtor and getting back in the industry soon.
I think the amount of work is subjective to each transaction. I’ve just worked for over 6 months on listing a home and literally the week we were finalizing everything, I get a text that says she is going with her friend that said, she didn’t have to make the repairs and will list it at the higher price. I, of course, did recommend that she get the AC fixed before selling it, but that if she didn’t, then the buyers could come back and request it to be fixed, a credit or nothing at all and just base their offer on the current conditions. But she did not give me an opportunity to discuss it with her after she already had her friend come by. On another listing, I had a few hours or research put in and hosted 3 open houses and got it sold. and Buyers… found one in one day, closed in 30 days and another, been working with him for a few months now and seeing everything and lots of research and spending lots of time. so I think in the end it balances out and I think it should stay pretty even split.
100% correct. It depends on the property AND also on the market. In some, a listing is an automatic quick sale wile Buyer’s agents work to compete to “win.” In others, listing can languish and the time and $$$ invested are barely worth it.
Respectfully disagree, listing agents often have much more to do than the selling agent in many cases. You need good listing agents to bring quality listings to the market with the right data & terms presented to offer selling agents inventory to choose from. Both listing & selling agents have many duties to their clients & the list is not short on either side. Respect both sides of the transaction or we will face more of this scrutiny in the future… May we all support the business & the professionals that we work with!
to Elaine – either you are not an agent or you haven’t been for long or maybe haven’t experienced a lot of transactions – any agent doing the job they should be doing for their party, Listing or Selling side, earns their money and sometimes in reality is underpaid. There are too many “practicing” agents that only have their interests in mind and not their clients. It’s easy to “play” real estate agent it’s not easy to be a real estate agent. We bring value to any transaction and most of us expect to earn our money not expect the other agent to do their job too.
Pumpkin Joe,
After reading all the comments I totally agree with you. I have seen it all for over 35 years in this profession. Many of them are working for themselves not for their clients. As a listing agent, most of the time I paid out to the buyer’s agents more than the listing’s side.
Most of the agents had to show dozens of properties before their buyers make an offer.
The buyers agent deserves to be paid equal.
Everyone out there can take a real estate license, but not many reserved to be called a real estate agent.
Pumpkin Joe,
After reading all the comments I totally agree with you. I have seen it all for over 35 years in this profession. Many of them are working for themselves not for their clients. As a listing agent, most of the time I paid out to the buyer’s agents more than the listing’s side.
Most of the agents had to show dozens of properties before their buyers make an offer.
The buyers agent deserves to be paid equal.
Everyone out there can take a real estate license, but not many reserved to be called a real estate agent.
Perhaps the public and the so called unsavory characters who surd( not my description of them) would be less resentful if the commission structure was graduated say 6% on the first $250k and then gradually reducing percentage as is practiced in Canada and uk ( I am told)
It’s disappointing in our line of business to have our commissions squeezed and for all the hard work both Buyer’s and Seller’s agent both do.
Commissions should be clear and split 50/50 Boston norm is 5% 2.5% each agent Suburbs are normally 4-5% split 50/50 each agent
There is no norm. It is what you as a listing charge for your services. Any seller is free to negotiate rates.
Sorry, I don’t agree. When I list a property, I spent a lot of time and money branding myself to get it. My listings are all professionally photographed, staged, and marketed extensively. I’m there for every phone call, inspection, and perform multiple open houses, if that’s what it takes. I put a lot of time and money in. When I bring a buyer, I mostly have my gas money and MLS fees as expenses. No comparison.
The reason a listing office gets a greater split is they are the ones marketing the property. Selling side or buyers agent isn’t marketing the sellers property.
Elaine, to recap, you are suggesting the commission paid by the seller should go in a higher percentage to the selling agent? I doubt you understand the full scope of representing a seller, obtaining listings, marketing to the whole world & being available at their convenience. To suggest the buyer’s agent (also referred to as selling agent) does all the work shows a very naive & short sided view of the industry.
Listing agent has FAR more expense than selling agent. With 25+ years of experience my costs for listing far far exceeds expense for selling expenses
I have to agree with others replying on your comment. Our job shows us that everything is negotiable. if you are a lousy listing agent, then fine, take less. But the beauty of our business is, we don’t have to abide to that lazy work ethic.
The listing agent is the one that has to put all the money out for marketing the property. They are solely responsible for making sure the buyer sees the property via the marketing outlets. Not only that but they are responsible for all marketing materials and advertising for that home. We photograph or hire photographers, we have drone service, 3D photography services, and pay for brochures, etc. We spend countless hours holding open houses and answering the endless questions. We complete mountains of paperwork just to take the listing and much more time and money is spent marketing ourselves so that the seller finds us and wants to list with us. All this is done so that when the buyer finds the home we listed online they can call the buyer agent and ask for a showing.
No you will see less commission to the selling agent. The lawsuit was that sellers should not have to pay for the buyers agent. How do you think you are getting more money than the listing agent ? You will get less. Or have to receive compensation from the buyer.
My experience is certainly not the same as yours! Have you cleaned the home or yard? Have you staged the home? Have you attended inspections because the buyers agent had another appointment? Have you dealt with the emotions the seller of their home after 40 years goes through? Held their hand as their possessions are sold at an estate sale? I’ve worked both sides. And I’ve shown buyers dozens of homes only for them to stop at an open house and write up the contract with that agent! This is a tough career but a rewarding career in terms of the services we provide our clients. I’ve been an agent for almost 20 years. I’m 74 years young! I plan to keep working and helping people. 🥰
Let’s step back! Back in the 70’s and 80’s it was buyer beware. Without buyers agents and the opportunity for buyers to be represented properly we wouldn’t even have this issue. It takes two sides for a good deal to take place, listing and selling agents. We have all had deals that one or the other don’t add stack up to the job at hand, but so be it, we also have had very smooth, quick and successful deals. It should be left to the broker managers or owners to help do the structures.
I disagree, listing agents have expenses of Signs, Lock Boxes, Advertising, lots of $$$ spent on Advertising.
These days Buyers look up houses online and state ” I want to see these homes”. Not as much driving the Buyers around as we did 30 years ago
I’ve been an agent since I was 18, and a broker owner for going on 30 years.
We do not need these national organizations, they do nothing for real estate agents and nothing for consumers.
The only reason we belong is for access to the MLS. Amazon or Google will eventually launch a national MLS and then everyone will leave these organizations and run their business as independent organizations, setting their own policies, including commissions.
I long for the day we can compete for business and win business based on our merits, and not be tied to these massive corporations.
At least with NAR and the MLS there is some thread of conformance to a standard. Getting away from that opens it up as the wild Wild West!
I love your comment. People always get sold on the idea that you’re working for this crate company and that will bring you prosperity. It’s ridiculous. Amen I support you and what you’re saying.
YES!!!! We should not be forced to join an organization to get access to the tools of our trade! This will be the next big lawsuit that NAR will face.
Something to consider when suggesting the listing agent doesn’t do much to earn a decent commission: they spend significant money on marketing, photos, open houses and staging.
Amen!
Obviously opiner forgot that NAR fought for us to be Important ‘Mandated’ workers during COVID.
I have been an agent for many years. 25+. At one pint I was a top producer. I got that by being FAIR. If I invested a ton of time, commissions would be 6%. If I double popped my listing quickly, what time and expense was done? We have homes flying off the market within hours. Some don’t even get marketed other than the MLS. There is fair and there is gouging. I no longer sell but the concept I’m sure would make for a top producer once again.
You’re right. I have been an agent for over 30 years. When it was a buyers market and prices were have what they are now . That meant the commissions we split with another agent were half what they are now. And it took months.
Be careful what you wish for. You don’t need an organization with standards ? We are going to have agency issues. Disclosure issues.
I can only speak for the independent firm I work for and they never require that a seller pay a particular commission to either the listing or selling agent. This is a fee (commission) that is always considered negotiable. What RE companies are forcing their agents, and requiring that their seller’s, pay a certain minimum commission? Maybe the RE companies who are deciding to settle out of court? In working with an independent firm, my broker has never chosen to be a part of NAR. Never have we ever been a part of NAR, and now realizing that there has always been a very good reason for choosing that path. My broker, as well as myself, have saved thousands of dollars by not associating ourselves with NAR, nor CAR for that matter. Why would any broker or agent choose to pay such high fees to consider themselves a “Realtor”. Labels mean nothing! It’s all about the service, knowledge, and experience you provide to your clients which is truly invaluable.
You’re missing the point of the lawsuit. It has nothing to do with who does more work or a better job. Sellers should pay their agent and buyers pay their agent. I.E. when you buy or sell stock you pay a commission to the broker that represents you.
Yes, I am hearing that a lot now, Buyers should pay their agents now.
Buyers in our Market, our area, don’t usually have enough funds to pay their own closing costs much less adding a RE Commission to it.
1st time home buyers are financing 100% and asking Sellers to pay $8k to $10 in closing costs for them.
Now, I Am hearing if Buyers have to pay half the RE commission, the buyers will have to ask the SELLER TO PAY the Buyers RE Commission as a concession.
So all of you are not thinking did the Listing pay a referral ? so now they making too much
Please oh please
I look forward to the day when each party pays for their own service provider. This is the only industry where a seller is expected to pay another party to negotiate against the seller’s interests…it’s an archaic and broken system. It’s inherently unfair and these types of lawsuits will hopefully move the industry toward a more equitable system.
This is where we have the problem. We should never, never be doing this. as you put it..” a seller is expected to pay another party to negotiate against the seller’s interests” this is not accurate and should not be the rule. The seller is NOT expected to pay the buyer agent. The seller pays his commission and the buyer pays his, however, agents have tunnel vision and have accepted this as the easy way out. I have never seen anyone trained that this is a standard or required yet every new agents seems to think this is the way it works. WHY? Commissions are NOT standard. Negotiate for what services you are doing for your client.
We are now recognized as Professionals in the real estate industry and therefore perhaps we need to start modeling our business as Professionals like attorneys do. Perhaps accepting a seller/landlord or business owner as a client and acting on their behalf for a fee or an amount of compensation to be earned on the sale or the transaction we are asked to engage in.
In working with Buyers, we may want to establish that relationship as well with an agreement to represent that party/buyer/entity/corporation/ etc. to help find the property or what they need our assistance in to complete the transaction for a fee or an amount of compensation.
This would apply to all the real estate serveries we are licensed to do for others.
Our real estate business in always in change, with new ideas and ways to see how one perhaps can or try take advantage over another, needs to be constantly looked at.
WE as Realtors in my opinion, (and personally as a Realtor for over 50 years, and still enjoying my Profession), always accepting the challenges every day, with every day different than before, makes us be an essential player in this real estate business.
I believe a lot of you are missing the point. Commissions are negotiable! I work on real estate problems, and most complaints come in where there was no explanation or negotiation at all. The clients weather buyer or seller were TOLD the commission is standard and the listing agreement, buyers agreement, contracts and docs were never explained or even gone over at all. sometimes they were given a booklet to explain… HOW REAL ESTATE WORKS! My daughter is in the process of selling and buying and no one gave her the time of day to explain any doc she received to sign by an online system and she again was told the commission is a standard 3% throughout the industry.
This lawsuit is a long time coming for a lot of agents that do not understand their own industry. This is a shame on us moment!
I say to the sellers I represent that I charge x% for my services.
Who spends more time on a listing is absolutely irrelevant. So producers, in any industry, are more efficient and productive than others. What the multiple listing service brings to the table is liquidity. Any idea how many countries in the world where real estate is next to impossible to dispose of? In the USA we can turn brinks and mortar in to cold hard cash in 30 days, depending on the closing date agreed upon. The dispute over “who pays the commission” is just a grab and nothing else. I had no idea when I bought watermelon at the grocery store they were getting a mark up. I guess I should file a really big lawsuit. If the commission wasn’t taken from the sale proceeds the buyer would have to go to the real estate selling agent for each house he/she wanted to see. To purchase a house the alleged buyer would have to sign a disclosure the agent is working for the seller and their would be no representation at all let alone let alone any local knowledge in which to benefit from.
It is alarming to see that these individuals sought to legal action to get what they wanted, not understanding process and basically won. As a real estate agent, I work with clients on the buying or selling side; have worked in intermediary process with both. The big part of what we do is “negotiation” and a good real estate agent knows how to manage the process. Commissions are “negiotiable”. However, we also work with our clients in finding contractors, house cleaning services, moving companies, inspectors, dog sitters, etc. What is that value worth? Still today, I have clients who do not know the real estate process or any idea of what we pay in fees; CE classes, brokerage fees, license renewal or our marketing. After the pandemic, I think there will be more change for the real estate market being introduced. Like so many other industries, we will become a commodity where everything is done on line with little communication. We are already seeing this with companies like Opendoor, 72SOLD, Offerpad and others.
A lot of good comments here and some who obviously do not have the experience or full grasp of the issues. The only winner in this lawsuit are the attorneys. The ones hurt most by it are buyers. They will be un represented and will pay dearly for their mistakes unless they hire a buyer’s agent or attorney. Attorneys are expensive and generally do not have the knowledge or experience that a real estate agent brings to the buyer. Some buyers foolishly think they are qualified to represent themselves. As a result there will be mistakes and law suits. The old system served the best interests of the public and this law suit does not.
In Texas our agreements state the fee is for the listing broker and further in the agreement we show transparency in how we may share MY fee if there is an agent who brings a protected,qualified, able buyer to work with us. These law suits never talk about agency issues should they do away with buyer agency. The burden on buyers if they had to pay the fee…let’s be real they seldom have enough money for down and closing costs so the dream of homeownership goes farther away. Buyer agency came about in the mid 90’s because before that everyone represented the seller and their best interest and when buyers cried foul they decided to add that type of representation.
I think we all need to take a breath and someone needs to explain to the public and the courts how real estate transactions really work, our representation to our clients, our fiduciary duties, and what we really do to help people achieve the dream of homeownership, wealth building and infrastructure change. Agents work really hard on both sides each having details of their own depending on who they represent.