The lead plaintiff in the Sitzer/Burnett case stated that landmark lawsuit was based on her real estate agent’s refusal to negotiate her commission – but rather than sue the agent, she was steered into suing the trade association representing real estate professionals.
In an interview with the New York Times, Rhonda Burnett stated that when she prepared to sell a second home that she and her husband owned in Kansas City in 2016, her agent gave her a form with four choices for the commission rate – 6%, 7%, 8% or 9% — with Burnett being told the commission would be evenly split with the buyer’s agent. Burnett claimed that when she asked if she lower the commission for the buyer’s agent, she was told that agents representing other buyers would be discouraged from doing business with her.
“When I asked her if I could negotiate, she said, ‘No, you really can’t,’” Burnett said.
Burnett’s agent listed the house for $275,000 but it sold for $250,000, with Burnett paying $15,298 for the commission.
Burnett did not identify her agent by name or by brokerage, and that individual was not a defendant in the case that resulted in a $1.8 billion verdict. Burnett added she knew the agent prior to the sale – both women were advocates for the Kansas City public school system.
Instead, Burnett felt the National Association of Realtors (NAR) was at fault.
“It’s not the realtors,” she declared. “But the realtors are controlled by a huge spider web. After I joined the lawsuit, I learned so much about how the industry is run. It goes all the way to the brokerages and up to NAR.”
The Times’ coverage included a statement from NAR that refuted the notion of arachnoid-level control.
“NAR does not set commissions, and commissions were negotiable long before this settlement,” the trade group said. “They are and will remain entirely negotiable between brokers and their clients.”
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Why not counter sue?
The agent was stupid. May be her training or lack of was responsible for her stupidity . Thx to these stupid agents they are the bad apples that spoil the whole lot & are giving real estate agents & this industry a bad wrap.
I totally agree. I’m a broker since 1980. An old mentor once told me “you don’t go broker makin money. The agent is a short sighted stupid agent. rather than than negotiate, her pompous ass lost a long term client, referrals, and probably a friend. You negotiate when you need to. This hardline cocky attitude ruined it.
Most industries adjust when big government is breathing down their neck. But not dumbass NAR. So, this is what you get. They kicked your ass. Read it and weep. Lie lay in it.
This is an example of the greedy and manipulative agent. Asking for as much as 9% commission it’s just wrong in my opinion… And not offer the option to negotiate just wrong. But the seller didn’t have to go with her and could have interviewed other agents as well.
i total agreed that the commission will be negotiate between agents, brokerage and clients that always i do that and i don’t mind to lower my commission to help clients. i know some agents are really grid and they want all the commission and the services are not good either but if the have clients that supported always will be the same not matter what’s and make all look bad for there actions. i ben on business since 2003 and all my clients are referrals i don’t had to advertise but the service is all about take care customers.
The seller should have interviewed other agents who likely would have charged a lower commission. The seller did not have to hire this agent so it is her own fault for not interviewing other agents and hiring this agent. This is not NAR or the real estate industry’s fault.
That is correct. If she didn’t like the deal, pick another agent.
Counter sue please
I work very hard on behalf of my clients and commissions are always negotiated and transparent. How much do the lawyers charge… what’s their take?
20%, 30% half?
The 4 attorneys will make $256 million, plaintiffs about $5000 each
Lawyers are the real criminals. Why don’t we start suing them for taking bigger fees than any other industry.
Or for not negotiating fees. I’ve never known a lawyer who was willing to negotiate the fee on a settlement. Isn’t it 40% of the award?
I’m a small broker, with about 20 agents, most of whom are not active. So this “huge spider web” she is referring to isn’t true across the board. There are large brokerage firms, but the majority of firms are smaller than mine–often just one person or a few people. Real Estate agents and brokers are generally small, self-employed individuals trying to scratch out an existence, and they work very hard for their money.
Burnette could have, and should have simply FSBO’d her home. Instead, she ruins an entire industry.
I question how many of these so called agents really are. Much of the spelling is below the standards of people who call themselves a professional
Amen but I see this often from licensed agents.
Show me the car fax. I don’t believe the 7-8% claim.
Every agent charges a different amount. Our experience, expertise and market knowledge dictate our rate. Just like any other professions. If I sense the property owner is looking for the cheapest commission model possible, I’ll refer that owner to another agent in the office who might be a better fit. I know my worth and my value and those of my colleagues. I can’t provide Nordstrom service at Walmart prices. Just not a sustainable business model. Not to mention we’re constantly working for free. For every deal we close, there are 4-5 others that don’t. Our time is very valuable and so we have to be very careful with who we work with.
Gutless seller should have chosen another agent as she was afraid to do anything against her friend. Don’t take it out on our industry because of your low life and greedy agent friend. We need to get rid of agents like her.
Its truly very interesting to me that everyone is so concerned about the real estate agents and a six percent commission to package, market, sell and close on a property but the attorney’s, who are so anxious to prosecute the agents for price fixing, are taking a standard rate 30% of any settlement they obtain on behalf of their clients and they still charge for hard costs incurred on behalf of their clients even if they lose their case because their case lacks merit. Even a normal business tries to achieve at least an 6-8% NOI and that 6% sales commission on real property charged by agents is gross revenue and certainly not the NOI. I think we should take a real hard look at who is gaslighting the public here, is it the real estate agents or the attorney’s??
The agent could have simply said that she does not choose to negotiate HER compensation. Saying “you can’t” was the jumping off point for all of this mess sadly. We can agree to negotiate with customers or not depending upon each of our business models. Seller should have interviewed other brokers and saved all of us this microscope we live under now. Let’s rise above all this and continue to do that great job we do working for our customers. We are up to the task! You got this Realtor peeps!
I would love to hear the other side of the story.