Could the REALTOR Settlement Bring More Transparency to St. Louis Real Estate?

Yesterday, I reported on the groundbreaking settlement proposed by the National Association of Realtors (NAR) to resolve the ongoing litigation surrounding broker commissions. Today, I want to dive deeper into the specifics of this settlement agreement and what it means for homeowners and real estate professionals here in the St. Louis area.

Key Points of the NAR Settlement Agreement

  • Broad Coverage: The settlement class is expansive, including home sellers who listed properties on MLSs anywhere in the U.S. during specified date ranges and paid a commission to any brokerage. For the St. Louis region, sellers are covered if they sold homes between October 31, 2018, and the date of the official Class Notice.
  • Released Parties: The settlement releases a wide range of parties from future claims related to broker commissions, including NAR, REALTOR associations, and MLSs that adhere to the required practice changes. Brokerages with 2022 transaction volumes under $2 billion are also released if they comply with the new rules.
  • Practice Changes: The agreement mandates significant shifts in industry practices, including:
    • “eliminate and prohibit any requirement by the National Association of REALTORS®, REALTOR® MLS, or Member Boards that listing brokers or sellers must make offers of compensation to buyer brokers or other buyer representatives (either directly or through buyers), and eliminate and prohibit any requirement that such offers, if made, must be blanket, unconditional, or unilateral;”
    • “prohibit REALTOR® MLS Participants, subscribers, other real estate brokers, other real estate agents, and their sellers from (a) making offers of compensation on the MLS to buyer brokers or other buyer representatives (either directly or through buyers) or (b) requiring that offers of compensation be made on the MLS to buyer brokers or other buyer representatives (either directly or through buyers);”
    • “require that REALTOR® MLS Participants who work with buyers enter into written agreements with their buyer clients that specify the broker compensation and how it will be paid, including if it will be paid by the buyer;”
    • “require that REALTOR® MLSs and REALTOR® MLS Participants provide, with any MLS listings that include a listing broker’s offer of compensation to a buyer broker or other buyer representative (either directly or through buyers), (i) disclosure as to the amount of that offer of compensation and (ii) a searchable field that displays buyer broker compensation offers;”
    • “prohibit REALTOR® MLSs, REALTOR® MLS Participants, and REALTOR® Member Boards from taking any adverse action against any Person making offers of compensation to buyer brokers at any price, or no price, either on or off the MLS;”
  • Financial Payout: NAR will pay a total of $418 million over four years to resolve the claims, with the first payment of $5 million due within 30 days of preliminary approval of the settlement. What This Means for St. Louis

What This Means for St. Louis
For homeowners in the St. Louis area, this settlement could bring more transparency to the commission structure when selling a home. By removing the requirement for listing brokers to offer buyer broker compensation through the MLS, the agreement aims to give sellers more control over how commissions are negotiated and paid.

Real estate agents and brokerages in our region will need to adapt to these changes, focusing on educating clients about compensation options and ensuring compliance with the new rules. At MORE, REALTORS®, we’ve been preparing for these shifts and are ready to guide our clients through the evolving landscape.

The full text of the NAR settlement agreement can be found below. As always, I’ll continue to keep you informed about how these developments impact our local market.


The Proposed NAR Settlement Agreement

(click on image to view entire agreement)

The Proposed NAR Settlement Agreement

NAR to Settle Nationwide Litigation on Broker Commissions, Introduces Industry-Wide Changes

Kevin Sears, NAR President

Kevin Sears, NAR President

This morning, Kevin Sears, President of the National Association of Realtors (NAR), unveiled a proposed settlement designed to bring to a close the contentious litigation surrounding broker commissions, a move that could significantly alter the landscape of the real estate industry. This development comes on the heels of the Sitzer-Burnett verdict, which cast the traditional practices of real estate professionals, particularly those concerning hiring and compensation methods, into the spotlight, sparking a series of lawsuits and raising questions about the future of the industry.

A Closer Look at the Proposed Settlement

The core aim of the proposed settlement is to resolve the ongoing litigation against NAR, its members, and associated real estate entities by addressing the claims related to broker commissions. Key components of the settlement include:

  • Liability Release: More than one million NAR members, along with various real estate entities, will be absolved from liability for claims akin to those highlighted in the lawsuits.
  • Compensation Offers: A pivotal change involves the elimination of compensation offers from MLS listings, a rule set to take effect in mid-July 2024.
  • Written Agreements: Starting mid-July 2024, MLS participants working with buyers will be required to engage through written representation agreements.
  • Financial Implications: NAR has committed to paying $418 million over a four-year span, a significant financial undertaking that will not result in an increase in the 2024 membership dues according to the release. (Noted is the fact they didn’t commit to no increases as a result beyond 2024)

Kevin Sears Weighs In

Sears articulated the objectives of the settlement, stating, “This proposed settlement achieves our goals to reduce strain on our members and chart a path forward for the industry.” He further emphasized the industry’s resilience and adaptability, expressing confidence that the agreement “allows us to move forward, preserving the right to real property for all.”

MORE, REALTORS® Prepared for the Future

Yes, this might come off as a shameless plug, but it would be a disservice not to mention how myself, alongside our brokerage’s leadership team, brokers, and agents, have been proactively preparing for the anticipated changes. We’ve delved deep into the issues raised by these lawsuits, identifying practices in need of rectification, regardless of the legal outcomes. Thus, while the shift away from MLS compensation offerings may catch many off guard, our team stands ready. We’re equipped to demystify the compensation process for our clients transparently, dedicating our focus to their needs. Discover more about our exceptional team at MORERealtors.com.

The Proposed NAR Settlement Agreement

(click on image to view entire agreement)

The Proposed NAR Settlement Agreement

Controversy Surrounds Cash for 40-Year Listing Rights Contracts in St. Louis Real Estate Market

Attorney General Andrew Bailey vs MV RealtyMV Realty Holdings, LLC, a Florida-based real estate company, has recently come under scrutiny for alleged wrongdoing and is currently facing bankruptcy proceedings. The company, which offers homeowners cash in exchange for exclusive rights to list their properties for sale for purportedly a period that lasts forty (40) years, has been accused of deceptive practices and unfair treatment of its clients, including homeowners in Missouri and the St. Louis area.

Here in Missouri, MV Realty has faced legal action from Missouri State Attorney General, Andrew Bailey who, earlier this year, filed suit against MV Realty “for its deceptive practices in marketing its services to Missouri homeowners.”  In a press release about this suit, Attorney General Bailey stated “I will enforce the laws as written and defend innocent Missourians from being ripped off” and the he was “proud of the work done by our Consumer Protection Unit to obtain justice for victims in this case.”

The suit filed by Attorney General Bailey alleges that “MV Realty, in violation of Missouri law, paid homeowners a tiny percentage of the value of their homes in exchange for a promise that the homeowner would use MV Realty as their brokers when they sold their homes.”  Attorney General Bailey’s statement about the suit filed goes on to to state that “the petition further alleges that MV Realty failed to tell the homeowners that the contract would be enforceable against their heirs after their death, that the contract bound them for 40 years, and that it would result in a lien being placed on their homes. In some instances, MV Realty falsely told homeowners that MV Realty would not place a lien on their homes, and that they would never have to pay the money back.”

Attorney General Bailey is asking the court to order that the liens be removed, that the agreements are void and unenforceable and to provide restitution to consumers who have been charged unlawful cancellation penalties and then finally to order that MV Realty pay fines and penalties, including $213 million in penalties for calling homeowners on the No Call list.

MV Realty operated in several states and appears to have complaints mounting in many of them from various parties.  In late 2022 the Florida Attorney General’s Office filed a lawsuit against MV Realty, accusing the company of violating the state’s Deceptive and Unfair Trade Practices Act. The lawsuit sought to enjoin MV Realty from engaging in further deceptive practices and to obtain restitution for affected homeowners.

As legal challenges and claims against MV Realty accumulated, MV Realty Holdings and approximately two dozen affiliated companies sought Chapter 11 bankruptcy protection in September 2023. This move automatically initiates a “stay” on existing lawsuits and claims, effectively pausing them. These actions remain on hold until the bankruptcy court either grants relief from the stay or the bankruptcy case concludes through dismissal or discharge. Currently, with the bankruptcy cases still active, proceedings are largely at a standstill. However, indications suggest the bankruptcy court may soon make further developments or progress.

Homeowners, including those in the St. Louis area, who entered agreements with MV Realty, face uncertainty regarding their property liens and seek clarity on their standing as the legal and bankruptcy proceedings progress.

The purpose of sharing this information is to educate homeowners on the importance of thoroughly understanding any agreements concerning their homes, advocating for informed decision-making with the support of qualified professionals. In our real estate practice at MORE, REALTORS®, we emphasize education and leverage a network of trusted professionals to guide homeowners, reflecting our commitment to looking out for our clients best interest and to equipping our clients to make informed decisions.

Facing New Rules: NAR and DOJ Clash Over Buyer’s Agent Commission Policies – What It Means for You

Kevin Sears,
2024 NAR President

At a real estate conference in Boston on February 1, 2024, NAR President Kevin Sears addressed a pressing issue facing the National Association of Realtors (NAR) and its members. Sears candidly discussed the aftermath of a $5.4 billion verdict against NAR, drawing parallels to a sports scenario to highlight the disappointment of a loss despite believing in the righteousness of their policy and actions. He emphasized the importance of moving forward, focusing on the legal appeals process and the ongoing challenges with the Department of Justice (DOJ), which has been a persistent adversary for NAR.

Sears detailed the history of NAR’s interactions with the DOJ, including a settled agreement in 2020, which the DOJ later contested, leading to further legal battles. He highlighted a specific case involving MLS Property Information Network (MLS PIN) in Massachusetts, which faced a “copycat lawsuit” and encountered DOJ objections to settlement agreements, underscoring the DOJ’s significant influence on the real estate industry’s operations.

Kevin Sears provided a comprehensive overview of the National Association of Realtors’ (NAR) complex and ongoing interactions with the Department of Justice (DOJ), painting a picture of an enduring legal struggle that has deep implications for the real estate industry. He began by recounting a pivotal moment in 2020 when NAR reached a settlement agreement with the DOJ, a moment that seemed to mark the beginning of a resolution to their disputes. However, this sense of resolution was short-lived as the DOJ later contested the terms of the agreement, reigniting a series of legal challenges that have since persisted.

Sears’ narrative then shifted focus to a more recent and illustrative example of these challenges: the case involving the MLS Property Information Network (MLS PIN) in Massachusetts. This particular case, described by Sears as a “copycat lawsuit,” mirrored the broader issues at stake between NAR and the DOJ. The lawsuit led to a proposed settlement agreement between MLS PIN and the plaintiff’s attorneys, which, in a turn of events characteristic of the DOJ’s recent interventions, faced objections from the DOJ. The federal department’s refusal to endorse the settlement underscored its readiness to closely scrutinize and influence the outcomes of legal disputes in the real estate sector.

Through these examples, Sears emphasized the DOJ’s significant and active role in shaping the operational landscape of the real estate industry. He highlighted the DOJ’s apparent commitment to altering traditional practices within the industry, particularly those related to the compensation of buyer’s agents through commissions offered by sellers. This ongoing legal saga between NAR, its members, and the DOJ not only reflects the complexities of antitrust law in real estate but also signals a potentially transformative period for industry practices and professional relationships.


 

Key Points Made by Kevin Sears:

  • Acknowledged the $5.4 billion verdict against NAR, emphasizing the need to move forward through legal appeals and post-trial motions.
  • Highlighted the longstanding challenges with the DOJ, including a contested settlement and ongoing legal disputes.
  • Discussed the specifics of a lawsuit involving MLS PIN in Massachusetts, illustrating the DOJ’s active role in scrutinizing industry practices and settlements.
  • Stressed the importance of adapting to changes in the real estate industry, particularly regarding how businesses operate and how realtors are compensated.
  • Urged the audience to consider the future of the industry and the necessity of embracing change, whether willingly or as a result of external pressures.

DOJ Suggests Ending Seller-Paid Buyer Agent Commissions

Yesterday, the Department of Justice filed a Statement of Interest  concerning the Nosalek v. MLS PIN case.  In the class action lawsuit Nosalek v. MLS Property Information Network, Inc., plaintiffs allege that mandatory commission agreements for buyer-brokers on the MLS system are anticompetitive, leading to artificially inflated commission rates for sellers, in violation of antitrust laws.  Previously, a settlement was reached by the parties in the lawsuit, but the DOJ intervened, asking the court to hear the views of the United States before deciding whether to approve the settlement.  This statement of interest was what the DOJ asked the court to wait for.

In the Statement of Interest, the Department of Justice conducts a critical examination of buyer agent commissions, suggesting that a transformative approach to real estate transactions is needed. The Department critiques the current practice of seller-offered commissions to buyer brokers for maintaining artificially high fees and stifling competition. It does not think the proposed changes in the settlement go far enough, stating, “as long as sellers can make buyer-broker commission offers, they will continue to offer ‘customary’ commissions out of fear that buyer brokers will direct buyers away from listings with lower commissions.” Their alternative? The DOJ states, “the parties could propose an injunction that would prohibit sellers from making commission offers to buyer brokers at all. That injunction would promote competition by empowering buyers to negotiate directly with their own brokers.” Ah, what I’ve been predicting for some time now, that a real estate agent will only be able to be paid by their client.

While this case is in Massachusetts and does not directly impact the St. Louis real estate industry, industry leaders throughout the country have been anxiously monitoring the suit to get a better idea of what the DOJ is going to want from the industry as a whole, which I think we clearly see with this filing.


 

Statement of Interest of The United States – Nosalek v MLS PIN


Real Estate’s Game Changer: Decoding the Latest Twists in the Sitzer Saga

Since the suit was first filed in 2019, I’ve been following the the Sitzer v. National Association of REALTORS® case closely and sharing my thoughts on the potential impact it could have on the real estate industry, as well as on home buyers and sellers. This task has been far from dull, as the litigation has been filled with action, especially since the Missouri jury’s ruling in favor of the plaintiffs in October. The past week has seen an increase in legal activity from the defendants, making the situation even more intense. Below is a breakdown of the latest events and their implications, from my perspective (bear in mind, I’m not an attorney, just a real estate broker):


Key Motions Filed:

  • National Association of Realtors Seeks a New Trial: This motion contests the fairness of the original trial, highlighting potential procedural and evidentiary errors that might have skewed the jury’s decision.
  • Calls for Judgment as a Matter of Law: Various defendants, including Keller Williams and BHH Affiliates, have challenged the verdict based on the argument that it contradicts the evidence presented. They point to possible legal oversights, such as flawed jury instructions.
  • Questioning the Class Action Status: A notable move by BHH Affiliates and HomeServices of America, this motion disputes the class action’s suitability, arguing that individual differences overshadow commonalities crucial in such lawsuits.

Analyzing the Legal Landscape:

  • The Frequency of Post-Verdict Motions: In complex cases like this, it’s quite typical for defendants to pursue motions for a new trial or a judgment reversal. These legal steps, while common, underscore the high stakes involved, especially in a sector as impactful as real estate.
  • Prospects of These Motions: Historically, the success of such motions varies. They can occasionally lead to new trials or judgment alterations. However, overturning a jury’s decision is often a challenging hill to climb, given the U.S. legal system’s respect for jury findings. These motions are more likely precursors to an appeal.
  • Real Estate Industry at a Crossroads: The decisions on these motions are critical. Their outcomes could prompt significant changes in how real estate transactions are conducted, especially regarding agent commissions and competitive practices.

What Does This Mean for Home Buyers and Sellers?

Now, you might be wondering, “All this legal talk is great, but how does it affect me as a home buyer or seller?” Well, I have some thoughts on that as well:

  • Changes in Commission Structures: The heart of the Sitzer case is about how real estate commissions are handled. Depending on the outcome, we might see a shift in how agents are paid. This could mean more flexibility or different options when it comes to commission rates.
  • Increased Transparency: The case also touches on transparency in real estate transactions. We could be looking at a future where there’s more clarity on how agents operate, which means you, as a buyer or seller, would have a clearer picture of what you’re getting into.
  • Potential for More Competitive Pricing: If the verdict leads to changes in how commissions are structured, this could open the door for more competitive pricing in the real estate market. It could mean better deals for buyers and more options for sellers.

In short, this trial isn’t just about big real estate companies; it’s about potentially changing the playing field for everyone involved in buying or selling a home. It’s about making sure that the process is fair and transparent for you, the consumer. So, stay tuned – the decisions made in this courtroom could be game-changers for how we buy and sell homes.

Compilation of Motions Filed In The Past Week in Sitzer v NAR

(click below to access the document containing all the motions filed)

Compilation of Motions Filed In The Past Week in Sitzer v NAR


 

Big Brokers Hit with New Antitrust Lawsuit Over Buyer Broker Commissions

The residential real estate industry is facing yet another antitrust lawsuit targeting the long-standing practice of home sellers paying the commissions of buyer’s agents. Filed on December 27th in Missouri federal court, Daniel Umpa v. National Association of Realtors alleges the NAR and large national brokerages like Compass and Keller Williams conspired to maintain inflated buyer agent commissions through anticompetitive practices.

This latest suit comes on the heels of the Department of Justice’s ongoing investigation into potentially anti-competitive industry practices related to real estate commissions and access to MLS listings. It also follows similar buyer broker commission lawsuits brought in the past two years by home sellers against NAR and large brokerages. The new complaint alleges the defendants worked together to enact NAR policies like the ‘Buyer Broker Commission Rule’ which required listing brokers to make blanket, non-negotiable commission offers to buyer brokers. This rule allegedly discourages lower commissions and impedes market competition to the detriment of home sellers.

If successful, the plaintiff seeks injunctive relief under antitrust laws forcing changes to current industry practices, as well as damages related to overcharges paid by class members stretching back to late 2019. With the DOJ investigation ongoing and buyer broker commissions under continued legal scrutiny, pressure mounts for transparency and reform in how real estate agents are compensated. Though the industry justifies maintaining the status quo to ensure access to listing data critical for buyers and sellers, critics argue new technologies make this argument increasingly dubious. One thing is clear – more antitrust litigation is brewing which could profoundly reshape residential brokerage.


Umpa vs The National Association of REALTORS, et al

(click on image to view entire complaint)

Umpa vs The National Association of REALTORS, et al

Is the REALTORS’ Clear Cooperation Policy Aiding Market Fairness or Fueling Legal Battles?

Recently, the real estate industry has found itself under increasing legal scrutiny, with multiple lawsuits challenging established norms. A critical point of debate is the REALTORS’ Clear Cooperation Policy. This policy mandates that within one business day of marketing a property to the public, agents must list the property on the MLS. While designed to promote transparency and cooperation among real estate professionals, it’s worth asking: Is this policy partly to blame for the industry’s legal challenges, or does it genuinely foster a fair and open market in compliance with the Sherman Antitrust Act?

The Sherman Antitrust Act, a cornerstone of U.S. antitrust law, prohibits any contract or combination that restrains trade. The Clear Cooperation Policy, by restricting agents’ freedom to market properties outside the MLS, potentially limits competition. Centralizing all listings within the MLS could be seen as creating a monopolistic environment, contrary to the principles of free trade the Sherman Act seeks to protect. On the other hand, proponents argue that the policy ensures equal access to property listings for all agents, thereby benefiting consumers by offering a comprehensive market view.

As legal battles unfold and regulatory bodies like the DOJ and FTC weigh in, the real estate industry awaits clarity. The coming months are crucial, and they will likely reveal whether the Clear Cooperation Policy aligns with the ethos of the Sherman Antitrust Act or contradicts it. As we navigate these complex legal waters, stay tuned to St Louis Real Estate News for the latest developments and insights. We’re committed to keeping you informed about how these critical issues will shape the future of real estate marketing and market fairness. Moreover, you can rely on the professional agents at MORE, REALTORS. They possess not only the knowledge and expertise to navigate through all the rules and regulations but also deliver exceptional results to their clients.


Highlights of the Clear Cooperation Policy

  • Mandatory MLS Listing: Properties must be listed on the MLS within one business day of public marketing.
  • Scope of Public Marketing: Includes flyers, yard signs, digital marketing, and more.
  • Office Exclusive Listings: Allows keeping listings off the MLS if not publicly marketed.
  • Filing Requirement: All exclusive listings must be filed with the MLS if publicly marketed.
  • Enforcement: Imposes fines and reporting mechanism for non-compliance.

Key Components of Sherman Antitrust Act Relevant to the Policy

  • Restriction on Trade: Prohibits practices that restrain trade or commerce.
  • Legal Consequences: Includes fines and imprisonment for violations.
  • Focus on Competition: Aims to maintain free and competitive markets.
  • Application to Real Estate: Includes practices affecting inter-state commerce.
  • Interpretation in Courts: Requires judicial determination on trade restraints.

NAR Aims to Dismiss Moehrl Suit: Summary Judgment Motion Marks Latest Turn in Landmark Real Estate Case

Earlier this week, on Tuesday, December 19, 2023, the Moehrl v. National Association of Realtors (NAR) lawsuit saw a flurry of activity.  Motions for summary judgment were filed by the remaining defendants, including the National Association of REALTORS® (NAR), Keller Williams Realty, Inc., BHH Affiliates, LLC, The Long & Foster Companies, Inc., HSF Affiliates, LLC and HomeServices of America, Inc. Notably, two other defendants, Realogy (now known as Anywhere) and Re/Max, had previously reached a settlement agreement with the plaintiff, which is currently pending court approval.

With the exception of Keller Williams Realty, Inc., all of the real estate brokerage defendants jointly filed a single motion for summary judgment. In contrast, Keller Williams Realty, Inc. submitted their own separate motion, which, while distinct, shares similarities with the collective motion of the other brokerages in its arguments and legal stance.

  • The National Association of Realtors defended its model rules and policies, asserting they’re not conspiratorial and are instead standard practice in the industry, aiming to facilitate transparency and efficiency in real estate transactions.
  • Keller Williams Realty, Inc. focused on their lack of involvement in the alleged conspiracy, emphasizing no direct role in NAR’s Cooperative Compensation Rule.
  • BHH Affiliates, LLC, The Long & Foster Companies, Inc., HSF Affiliates, LLC, HomeServices of America, Inc. similarly argued for their non-participation in any actions related to the NAR rule they’re accused of conspiring to adopt.

As I’ve mentioned in many previous articles, this legal battle, along with other similar cases across the country, is poised to have significant implications for the real estate industry and profession. At the heart of these challenges lies a foundational method of conducting residential real estate transactions, including the compensation of agents (particularly buyer’s agents). Regardless of the outcomes of these lawsuits, the industry is set to undergo significant changes. This is partly due to the heightened attention these cases have attracted, which will likely lead to a better understanding of the transaction process by home buyers and sellers, as well as greater transparency, especially in terms of the roles and compensation of real estate agents involved. Personally, I believe these developments are positive. They will benefit dedicated, professional agents and their clients, and may disadvantage those who are underperforming or, frankly, should not be in the business in the first place.

Find complete information on this lawsuit as well as all the other related lawsuits as well as a wealth of information on the St Louis real estate market at the MORE Resource Center by clicking this link or the button below.


Missouri Supreme Court Overturns Bill Criminalizing Sleeping on State Lands

Yesterday, the Missouri Supreme Court issued a ruling striking down Missouri House Bill 1606 (2022), particularly section 67.2300, which sought to criminalize unauthorized sleeping and camping on state-owned lands, making it a class C misdemeanor. The Court found this section to be in violation of the Missouri Constitution’s single subject requirement.

In the decision, the Supreme Court emphasized that the inclusion of section 67.2300 introduced an impermissible additional subject—homelessness—into the bill, which was originally focused on political subdivisions. Justice Paul C. Wilson, writing for the Court, noted that the provisions of section 67.2300 “do not fairly relate to or have a natural connection with” the subject of political subdivisions, and instead relate to the different subject of homelessness. This divergence from the bill’s original purpose led to the conclusion that TAFP HB 1606, in its entirety, violated the single subject requirement of article III section 23 of the Missouri Constitution.


Missouri Supreme Court Opinion Issued December 19, 2023

(click on image below to access full opinion)

Missouri Supreme Court Opinion Issued December 19, 2023

 

Indications Lean Towards DOJ in NAR Legal Battle: Insights from Appellate Court’s Oral Arguments

In yet another pivotal moment for the real estate industry, oral arguments were made yesterday before a three-judge panel at the United States Court of Appeals for the District of Columbia Circuit in the ongoing battle between the National Association of REALTORS (NAR) and the Department of Justice (DOJ).   The panel, consisting of Circuit Judges Henderson, Walker, and Pan, will now deliberate and make a ruling in the future, a decision that could significantly impact the industry.

The case centers on NAR’s attempt to prevent the DOJ from reopening an investigation into the organization’s commission-sharing policies. The dispute revolves around a 2020 closure agreement, which NAR interprets as barring any future investigations. However, this interpretation faced scrutiny from the judges, particularly Judge Florence Pan, who questioned the permanence of the agreement.

Representing the DOJ, Frederick Liu argued that there was never an intention to indefinitely halt the investigation. He emphasized that during the negotiation process, the DOJ’s antitrust division did not make explicit commitments to end the probe permanently.

This legal showdown is crucial for NAR, an association with more than 1.5 million members. Just last month, NAR, along with other defendants, lost a nearly $1.8 Billion anti-trust lawsuit here in Missouri (Sitzer v NAR) and NAR is currently facing multiple other antitrust lawsuits, including a substantial class-action suit in Illinois, potentially leading to damages of $40 billion.

NAR’s attorney, Christopher Michel, stressed the significance of the closure agreement, arguing that reopening the investigation would render it meaningless. Judge Justin Walker, however, highlighted the inherent risk NAR took in depending on the continuity of the DOJ’s personnel after the election.

The decision by this appellate court will be closely watched, as it could herald significant changes in how real estate transactions are conducted, affecting agents, buyers, and sellers alike. Stay updated with St Louis Real Estate News for the latest on this critical legal development.


New Class Action Lawsuit Targets Major Real Estate Players Following Sitzer Verdict

In a remarkable turn of events, just minutes after the jury sided with the homeseller-plaintiffs in the landmark Sitzer | Burnett trial, attorney Michael Ketchmark wasted no time in launching another legal salvo against the real estate industry. This new class action lawsuit, filed on behalf of three new homesellers, aims to further scrutinize the practices surrounding agent commissions.

The Defendants

This new lawsuit expands the list of defendants to include: Compass, eXp World Holdings, Redfin, Weichert Realtors, United Real Estate, Howard Hanna, and Douglas Elliman. Notably, the National Association of Realtors is once again named as a defendant, marking its continued entanglement in legal challenges related to commission structures.

The Allegations

The plaintiffs in this new case echo the grievances aired in the Sitzer | Burnett lawsuit, claiming they have been adversely affected by a “real estate industry conspiracy” that artificially inflates agent commissions. The suit alleges that this practice has a cascading effect, ultimately driving up costs for homesellers.

Legal Venue

The lawsuit has been filed in the United States District Court for the Western District of Missouri, the same jurisdiction that recently saw the Sitzer | Burnett plaintiffs awarded $1.785 billion in damages.

What This Means for the Industry

The filing of this new lawsuit so swiftly on the heels of the Sitzer | Burnett verdict could signal a wave of legal challenges aimed at traditional real estate commission models. Industry stakeholders will undoubtedly be watching closely as this new case unfolds, given its potential to further disrupt established practices and financial structures within the real estate market.

Sitzer v National Association of Realtors: A Mid-Trial Summary

I’ve been discussing and writing about the Sitzer v National Association of REALTORS®, et al, lawsuit since it was originally filed in 2019. My previous articles on this case, as well as the Moerhl suit—a similar lawsuit filed in Illinois—can be found at the links below, which are in chronological order with the most recent first:

Today marks the end of the second week the trial has been underway, and it’s time to take stock of what has transpired so far.

Key Developments

Motions and Counter-Motions

  • Motion to Enforce Court Order: BHH Affiliates, LLC, HSF Affiliates, LLC, and HomeServices of America, Inc., filed a motion to enforce a court order. This motion was subsequently denied by District Judge Stephen R. Bough.
  • Deposition Designations: The court overruled most of the defendants’ objections regarding the deposition of Kevin Goffstein, allowing most of the deposition to be part of the trial record.
  • State Statutes and Regulations: A significant ruling came when the court prohibited the defendants from using state statutes and regulations as exhibits.

Legal Maneuvers

  • Pro Hac Vice Admission: Ian T. Hampton was allowed to appear pro hac vice to represent HomeServices of America, Inc.
  • Motions in Limine: Multiple motions in limine were filed by both parties, aiming to limit the evidence that can be presented during the trial.
  • Motions for Judgment as a Matter of Law: Both the National Association of Realtors and Keller Williams Realty, Inc., filed motions for judgment as a matter of law, which were denied by the court.

Trial Proceedings

  • Jury Trial: The jury trial has been ongoing, with proceedings taking place almost daily. The court has been in session for extended hours, indicating the complexity and importance of the case.
  • Witness Withdrawals: Plaintiffs withdrew David Liniger and Jay Papasan as witnesses to be called by videotaped deposition.
  • Jury Instructions: Various motions and objections were raised concerning the jury instructions, including a specific motion by Keller Williams Realty, Inc., for a Jury Instruction on Missouri State Law.

The first two weeks of the trial have been action-packed, with both sides employing various legal strategies. The court has been diligent in its rulings, aiming to ensure a fair trial. As we move into the next phase, it’s clear that the outcome of this case could have far-reaching implications for the real estate industry. Stay tuned for more updates as the trial progresses.


Beware of Seller Impersonation Fraud: A Real-Life Example and How to Protect Yourself

Seller impersonation fraud, also known as deed fraud, is a growing concern in the real estate industry. This type of fraud involves forging the property owner’s signature to illegally transfer ownership of the property. A recent case in the City of St. Louis serves as a cautionary tale for homeowners.

A Disturbing Case in St. Louis

Bernadette Brown, a member of the Royal Realty Group LLC, recently discovered that a property owned by the LLC at 1129 Penrose Street, St. Louis, MO 63107, was conveyed to Keith Brown via a Quit Claim deed. Bernadette Brown claims her name was forged on the deed, which was then notarized by a non-existent notary. This alarming incident underscores the need for homeowners to be vigilant in monitoring their property records.

How to Protect Yourself

Fortunately, there are several ways homeowners can protect themselves from becoming victims of deed fraud:

Property Fraud Alert Services

Many counties offer free services that alert property owners when deeds or other documents related to their property are filed. Property Fraud Alert is one such service, available in 23 counties in Missouri, including the City of St. Louis, St. Louis County, St Charles County, Jefferson, and Franklin. These alerts can serve as an early warning system, allowing you to take immediate action if you suspect fraudulent activity.

Title Reports

If you have concerns about your property, you can order a title report from a local title insurance company for a modest fee. M&I Title* in St. Louis, MO, is one such company that can provide this service. A title report will confirm the name under which the property is registered and identify any deeds of trust against it.

REALIST Reports

Agents from MORE, REALTORS can assist you by pulling a REALIST report from the MLS at no charge. This report will provide some basic information about your property, offering another layer of protection against fraud.

For more insights and advice on the St. Louis real estate market, stay tuned to StLouisRealEstateNews.com.

*Disclosure: I have a financial interest in M&I Title.


Do Landlords Have to Allow Support Animals If They Have a No Pet Policy?

With changing regulations, subdivision restrictions, municipal ordinances, state and federal laws, landlords certainly have a lot to keep up with today to make sure they stay compliant in their rental business.   I’ve been in the business over 40 years, have an interest-and a fair understanding of- laws that affect real estate, yet still find it challenging to stay updated. Given this, I can only imagine the challenge faced by someone with a full-time career who also owns rental properties as an investment. Perhaps, this might be a compelling reason to consider hiring a professional property manager for your rentals. However, that decision brings its own complexities, which I’ll delve into in a future article.

A recurring issue for landlords, which prompts many questions from agents in our firm, clients, and other landlords, revolves around service animals. The question is usually framed something like, “I don’t want any pets in my rental properties, so I have a strict no-pet policy but am I obligated to allow dogs or other pets if the tenant claims it’s a ‘service animal’?” Before I go further, let me remind you, I am not an attorney, this isn’t legal advice—in fact, it’s not advice at all. I’m merely sharing what I’ve learned on the topic to heighten awareness of the issue and to encourage those that are not familiar with it to learn what they need to learn or to seek out proper legal guidance to avoid problems.


CFPB Orders Wells Fargo To Pay $3.7 Billion…Includes more than $2 B in redress to consumers

Today, the Consumer Financial Protection Bureau (CFPB) released details of a Consent Order they reached with Wells Fargo Bank, N.A. in which Wells Fargo is ordered to pay “more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines.”  According to a press release issued by the CFPB, Wells Fargo’s “..illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes.”   Rohit Chopra, the Director of the Consumer Financial Protection Bureau, stated “Wells Fargo’s rinse-repeat cycle of violating the law has harmed millions of American families”.

The CFPB order requires Wells Fargo to: 

  • Provide more than $2 billion in redress to consumers: Wells Fargo will be required to pay redress totaling more than $2 billion to harmed customers. These payments represent refunds of wrongful fees and other charges and compensation for a variety of harms such as frozen bank accounts, illegally repossessed vehicles, and wrongfully foreclosed homes. Specifically, Wells Fargo will have to pay:
    • More than $1.3 billion in consumer redress for affected auto lending accounts.
    • More than $500 million in consumer redress for affected deposit accounts, including $205 million for illegal surprise overdraft fees.
    • Nearly $200 million in consumer redress for affected mortgage servicing accounts.
  • Stop charging surprise overdraft fees: Wells Fargo may not charge overdraft fees for deposit accounts when the consumer had available funds at the time of a purchase or other debit transaction, but then subsequently had a negative balance once the transaction settled. Surprise overdraft fees have been a recurring issue for consumers who can neither reasonably anticipate nor take steps to avoid them.
  • Ensure auto loan borrowers receive refunds for certain add-on fees: Wells Fargo must ensure that the unused portion of GAP contracts, a type of debt cancellation contract that covers the remaining amount of the borrower’s auto loan in the case of a major accident or theft, is refunded to the borrower when a loan is paid off or otherwise terminates early.
  • Pay $1.7 billion in penalties: Wells Fargo will pay a $1.7 billion penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund.

To get more information on the CFPB victims relief fund, click here.

Wells Fargo employees who are aware of other illegal activity are encouraged to send information about what they know to whistleblower@cfpb.gov.

 

Lawsuit Filed Against Zillow With Accusations of Wiretapping and Invasion of Privacy

On Monday of this week, a federal lawsuit was filed in the United Status District Court for the Western District of Washington by Natalie Perkins and Kenneth Hasson against Zillow Group, Inc. and Microsoft Corporation.  The suit was filed as a class action complaint on behalf of “All natural persons in the United States and its territories whose Website Communications were captured through the use of Session Replay Code embedded in Zillow’s website”.

In the complaint, the plaintiff’s allege that the defendants, Zillow and Microsoft, violated the Washington Wiretapping Statute (Wash. Rev. Code §9.73.030, et. seq.) through the use of Microsoft’s Session Replay Code “…on Zillow’s website to spy on, automatically and secretly, and to intercept Zillow’s website visitors’ electronic interactions communications with Zillow in real time”.  The second Count of the complaint, Invasion of Privacy – Intrusion Upon Seclusion, alleges that, using the same code as well as other methods which violated the plaintiff’s “…reasonable expectation of privacy in their Website Communications..” which violates the plaintiff’s “….right to
privacy is also established in the Constitution of the State of Washington which explicitly recognizes an individual’s right to privacy under Article 1 §7.

The lawsuit is asking the court for relief in the form of a judgment as follows:

A. Certifying the Class and appointing Plaintiffs as the Class representatives; B. Appointing Plaintiffs’ counsel as class counsel;
C. Declaring that Defendants’ past conduct was unlawful, as alleged herein; D. Declaring Defendants’ ongoing conduct is unlawful, as alleged herein;
E. Enjoining Defendants from continuing the unlawful practices described herein, and awarding such injunctive and other equitable relief as the Court deems just and proper;
F. Awarding Plaintiffs and the Class members statutory, actual, compensatory, consequential, punitive, and nominal damages, as well as restitution and/or disgorgement of profits unlawfully obtained;
G. Awarding Plaintiffs and the Class members pre-judgment and post-judgment interest;
H. Awarding Plaintiffs and the Class members reasonable attorneys’ fees, costs, and expenses; and
I. Granting such other relief as the Court deems just and proper.

The entire lawsuit filing, NATALIE PERKINS and KENNETH HASSON, individually and on behalf themselves and of all others similarly situated, Plaintiffs, v. ZILLOW GROUP, INC. and MICROSOFT CORPORATION, can be accessed here.

 

Most Consumers Who Sold to Opendoor Lost Money According to FTC Complaint

Maybe you’ve received an unsolicited offer recently to buy your home via email or postcard from Opendoor, a home buying firm. OpenDoor will make an offer on your house, bypassing the traditional method of selling your home via a REALTOR® using the MLS (which reaches 13,000+ REALTORS®) and entices you with catchy phrases on their website like “Get an instant offer and get paid” and “Skip showings and repairs”. It can sound good and SIMPLE but, according to the FTC complaint against OPENDOOR LABS, Inc. (Opendoor) and the agreement and consent order, “…consumers who sold to Opendoor have lost money compared to what they would have received through a traditional sale.

The consent order which, according to a press release issued by Opendoor about the FTC complaint, they have agreed to, prohibits Opendoor from misrepresenting:

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Continue reading “Most Consumers Who Sold to Opendoor Lost Money According to FTC Complaint

Sitzer vs NAR (National Association of REALTORS) – Good or bad for consumers?

In an article published yesterday, I referenced the Sitzer vs National Association of REALTORS law suit and said I would have a more in-depth discussion about that suit and here it is.  The lawsuit was filed by Joshua Sitzer, Amy Winger, Scott and Rhonda Burnett and Ryan Hendrickson on June 21, 2019 against the National Association of REALTORS® and the parent companies of major real estate companies and franchises including Coldwell Banker, ReMax, Keller Williams and Berkshire Hathaway Homeservices.

The Sitzer lawsuit was filed in the United States District Court for the Western District of Missouri sought to be certified as a class action lawsuit on behalf of “all persons and entities who listed properties on one of four Multiple Listing Services…and paid a broker commission from at least April 29, 2015 until the Present…“.   The four MLS’s listed in the suit that this applies to are:

  • Heartland MLS (Kansas City, MO)
  • MARIS MLS (St Louis, MO)
  • Southern Missouri Regional MLS (Springfield, MO)
  • CBOR MLS (Columbia, MO)

Last Friday, April 22, 2022, Stephen R. Bough, a Federal Judge for in the Western District of Missouri, issued an order granting the class action status for the lawsuit the Plaintiffs sought.

What does the class action ruling change?

Continue reading “Sitzer vs NAR (National Association of REALTORS) – Good or bad for consumers?

Eviction Moratorium Extended To July 31st But Is The Last Extension

The Director for the Center for Disease Control (CDC), Dr. Rochelle Walensky, signed an extension to the eviction moratorium extending its expiration from June 30, 2021 to July 31, 2021.  The CDC has indicated that “this is intended to be the final extension of the moratorium.”

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CFPB Proposes Banning Foreclosures Through The End Of This Year

The Consumer Financial Protection Bureau (CFPB) earlier this week proposed rule changes that would help prevent “avoidable foreclosures” that will come about when the current foreclosure ban expires June 30th.  According to the CFPB, nearly 3 million homeowners are delinquent on their mortgages as a result of the COVID-19 pandemic as well as the economic issues that have come about as a result.

The CFPB’s proposed rule changes include:

  • Require a pre-foreclosure review period that would generally prohibit loan servicers from starting foreclosure until after December 31, 2021 on loans secured by a borrower’s principal residence.
  • Permit loan servicers to offer “certain streamlined loan modification options to borrowers with COVID-19-related hardships.”

The CFPB is going to accept comments on their proposed rules until May 11, 2011 and then afterward will decide how to proceed.

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About the CFPB (from their website)

The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

Transparency in the home buying process including buyer’s agent commissions

Buyers Agent Commission TransparencyIn December I wrote about multiple class-action lawsuits filed against the National Association of REALTORS® (NAR), as well as some of the largest real estate brokerages, like ReMax and Keller Williams as well as a Department of Justice (DOJ) complaint filed again NAR over issues related to the lack of transparency in the home buying process.

The aforementioned complaints claim, among other things, that there has been an effort by the defendants to force buyers to pay an “inflated” price for a home as a result of the buyer not realizing the seller was forced to offer a commission to a buyer’s agent in order to get their listing in the MLS.  In addition, they claim that NAR and its members misrepresented to buyers that a buyer’s agent’s representation and services were “free”, when in fact their agent was being paid a commission,  which came from the seller and as a result, they claim this expense inflated the cost the buyer was forced to pay for the home.

I’m not here to address the accuracy of the claims made in these complaints nor get into an analysis of the legal merits of the case, but instead just want to address the changes I see that have already taken place or will take place in the home-buying process.  NAR has already reached a settlement with the DOJ in which they (NAR) agreed to make several changes, so those are pretty easy to predict and I think I have a reasonable idea of some other changes that will come along in the comings months as well.

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So, what are these changes I see coming to the home-buying process in terms of transparency?

Below are some of the changes I already see or expect to see:

  • Buyer’s agents aren’t FREE, nor should they be.  NAR has already agreed to prohibit their members from claiming their services are free as they are not.  A good buyer’s agent is invaluable to a home buyer and not only will earn the commission they make but in many cases,  will “pay for themselves”.   What I mean by this is their guidance and advice to their clients, which comes from their knowledge of the market and process, as well as experience, will help their clients avoid pitfalls and to make informed, good decisions.
  • Commission transparency.  Prior to the lawsuits, many MLS’s around the country, including the one that serves the St Louis area, prohibited the amount of commission being offered to a buyer’s agent by the seller from being shown on broker’s real estate search websites.  MARIS, the company that provides the MLS for St Louis area REALTORS® was quick and pro-active in this area and began allowing brokers to display buyer’s agent’s commission on their websites.  I’m happy to say that my company, MORE, REALTORS® was, I believe, one of the first brokerages in the area to begin displaying this information.  On STLMLS.com consumers can find the amount of commission being offered to buyer’s agents on listings.  In the interest of full disclosure, I should mention I’m on the board of directors for MARIS and I’m an officer and shareholder of MORE, REALTORS.
  • Sellers won’t have to offer to pay a buyer’s agent to get in the MLS.  While the first two bullet-points above are things that have happened, now I’m predicting what will happen.  I believe that soon, perhaps as soon as “months” or as long as a year or two, the MLS requirement that a seller offers compensation to a buyer’s agent to have their listing be in the MLS will be dropped.  This is nothing that should cause panic as buyer’s agents won’t go away nor work for free, it’s just the structure of the transaction will change.  The changes made will no doubt provide a much greater level of transparency to the buyer though as I believe they will have a clear picture of the process including how their buyer’s agent is getting paid.
  • Agents won’t have to be REALTORS® to be part of the MLS.  Even though this is already true in several parts of the country, most MLS’s require that agents be a REALTOR® (so be a member of the National Association of REALTORS® (NAR)) to join the MLS.  I believe that all MLS’s in the country will be forced to allow participation by all licensed real estate brokers and agents and not just REALTORS®.  I think my prior prediction will come to fruition sooner and this one will follow so it will likely be a couple of years at least before this happens.

The bottom line is some obstacles exist today for the real estate industry as well as there are changes taking place and more coming.  While many folks don’t embrace change, call me a Pollyanna, but I think the result will be positive both for the real estate professional as well as the consumer that is buying or selling a home.

I’ll close with a quote on the topic of obstacles that I frequently share on a coaching session I do for our agents that is from Victor Kiam (the Remington razor guy) – “….there is little difference between obstacle and opportunity…

 

Coming Soon To A REALTOR® Near You – Commission Transparency

The National Association of REALTORS® (NAR) has come under attack over the past few months as a defendant in two class-action lawsuits, Christopher Moehrl v The National Association of REALTORS® and Joshua A. Sitzer and Amy Winger v The National Association of REALTORS® filed in March and April of 2019 respectively, and, most recently, a complaint brought by the Department of Justice, United States v National Association of REALTORS® filed this month.  The latter came with a pre-arranged proposed settlement with NAR.  I should also mention the two class-action lawsuits have as additional defendants Realogy Holdings Corp (the own and operate several franchises, some of the local ones include Coldwell Banker-Gundaker, Better Homes & Gardens, ERA, Sotheby’s, and Century-21), HomeServices of America, Inc. (owner of Berkshire Hathway Home Services), Re/Max and Keller Williams.

While there are additional issues raised in the lawsuits and DOJ complaint, central to them are buyer’s agents’ commissions.  Issues raised include:

  • From the DOJ complaint:
    • Allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free;
    • Enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential home buyers;
  • From the lawsuits:
    • Sellers of residential property have been forced to pay inflated costs to sell their homes through forced payments of commissions to buyer brokers;
    • Home sellers have been forced to set buyer broker commissions to induce buyer brokers to show the sellers’ homes to prospective buyers;
    • Price competition has been restrained among brokers seeking to be retained by home buyers, and by brokers seeking to represent home sellers; and
    • Defendant Franchisors and their franchisees have inflated their profits by a significant margin by the increased total commissions and increased buyer broker commissions.

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Continue reading “Coming Soon To A REALTOR® Near You – Commission Transparency

Dr. Martin Luther King, Jr’s Life Work Led To Fair Housing In America

Today, as we celebrate the life of Dr. Martin Luther King, Jr. who is best known as a leader in the Civil Rights movement, I wanted to look at how his efforts also ultimately resulted in the Fair Housing Act, which sought to end discrimination in housing.

Through the efforts of the civil rights movement, Dr. King and others were able to get the attention of our nation resulting in President John F. Kennedy, in a nationally televised address on June 6, 1963, urging the nation to ” take action toward guaranteeing equal treatment of every American regardless of race.”  Shortly after his address to the nation, President Kennedy proposed that Congress consider civil rights legislation that would address rights in many areas such as voting, public accommodations, school desegregation but not housing at the time.  Even though President Kennedy was assassinated on November 22, 1963, his efforts beforehand still resulted in the Civil Rights Act of 1964 when, then President, Lyndon Johnson, signed into law on July 2, 1964.

The Civil Rights Act of 1964 prohibited discrimination in public places, provided for integration of schools and made employment discrimination illegal, however, it did not address housing.

Four years later came the Civil Rights Act of 1968, which is also referred to, and more commonly known, as the “Fair Housing Act of 1968″, which expanded the original civil rights act to include prohibiting discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin or sex.  President Lyndon Johnson signed the Fair Housing Act into law on April 11, 1968, one week after Dr. Martin Luther King, Jr. was assassinated.

Fair Housing Resources:

Dr. Martin Luther King, Jr. resources and information…

REALTORS® Adopt New MLS Rule Aimed To Eliminate “Off-MLS” Listings

Yesterday, the board of directors for the National Association of REALTORS® (NAR) approved a new policy dubbed the “Clear Cooperation Policy” which goes into effect January 1, 2020, and Multiple Listing Service’s (MLS) have until May 1, 2020, to adopt and implement.

While the vote by the board of directors, 729 in favor of it to 70 opposed, may not reflect it, there is a lot of controversy about this policy among real estate agents and brokers that are members of NAR. The two main changes this new policy bring about are that agents would be mandated to put, for all intents and purposes, 100% of their listings in the MLS system within one business-day of marketing the listing (marketing is defined to include putting a sign in the yard, telling someone about the listing, etc) and “MLS-exempt” listings will no longer be permitted.


Better for the consumer?

Proponents of the new NAR MLS policy say that this will be better for consumers by:

  • Making all available listings show in the MLS;
  • Giving more exposure to sellers of their listings by not permitting “MLS exempt”, “off-MLS”, “Coming Soon” or other marketing methods that may not include putting the listing in the MLS, or at least not initially;
  • Leveling the playing field, making all listings available to all consumers since listings could no longer be marketed through just social media, private networks, etc, but, instead, would be required to be put in the MLS;
  • Eliminating practices that may violate Fair Housing Laws by limiting what audience a particular listing is exposed to;

Opponents of the new NAR MLS policy argue that it is not better for consumers because:

  • It eliminates the opportunity for an experienced listing agent to determine, in cooperation with their seller client, the best means and methods to market their home to obtain maximum exposure and the highest price;
  •  Pre-marketing, such as a coming soon promotion on social media before the listing is ready to go in the MLS in an effort to generate buzz and hype over the listing, would be prohibited.  This is a method of marketing that, in our current low-inventory market, has been extremely effective in getting maximum exposure, and the highest price, for the seller.
  • Agents would not be permitted to quietly “test” the market to see how the listing, and/or it’s price, will be received by the market.  This is often done by marketing the home before entry in the MLS to establish the right price.  Once in the MLS, the days on market start working against the seller, as do price reductions, so coming into the MLS at the right price is essential for the seller.
  • It prevents a seller from using a REALTOR® when they wish to have their property marketed in a private manner and not publicly.  This happens often when the seller is a high-profile individual that for security and/or privacy reasons, does not want photos and details about their home (including that they are selling it) publicly known.  It can also occur in the case of a divorce, a distressed-type sale, etc;

Time will tell whether this proves to be good, or bad, for the industry and the consumer.

Stay tuned.

REALTORS® Association Considers New Rule Requiring All Listings Be In MLS

The MLS Technology and Emerging Issues Advisory Board, of the National Association of REALTORS® (NAR), proposed a rule change that is sparking some controversy among its’ members.  The proposed “Clear Cooperation Policy” requires that all listings be put in the MLS within 24 hours of “marketing a property to the public“.  The policy defines “public marketing” as including, but not limited to, “flyers displayed in windows, yard signs, digital marketing on public-facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public”.

But, isn’t that how it is now?

Many consumers may having been thinking that this is how it was all along, that new listings were required to go into the MLS but, that is not currently the case.  Presently (and going back to the beginning of the MLS here in St Louis, I believe), agents have been able to determine the best marketing methods for their client, as well as allow their client input as to whether they wanted their listing in the MLS immediately, after a period of time or even not at all.

Continue reading “REALTORS® Association Considers New Rule Requiring All Listings Be In MLS

Who Pays The Buyers Agent?

I saw an article recently about the results of a survey done of home sellers that found that nearly half of them didn’t realize they pay the buyers’ agent commission when they sell their home.

Sellers pay the buyers’ agent in almost all home sales in St Louis…

While I don’t know for sure, I would guess that the people surveyed were homeowners that planned to sell their homes, rather than sellers that already had their homes listed for sale.  I say this because the standard listing agreement used by St Louis REALTORS® spells out the total commission being charged the seller, as well as the portion of the commission that will be paid to the buyers’ agent which I would think, would cause the seller to realize they are paying commission to the buyers’ agent.

While the seller, when presented with the listing agreement, could opt to not offer to pay commission to the buyer’s agent, the MLS rules require that all listings in the MLS (which is most of the St Louis home sales) include an “offer of compensation” for the buyers’ agent, which will come from the seller.  Therefore, the sellers have to either offer to pay the buyer’s agent or forego having their listing in the MLS, hence why sellers pay the buyers agent in nearly all instances.  It’s probably worth noting at this juncture that this practice has come under attack in a recent class-action lawsuit filed by Christopher Moehrl against The National Association of REALTORS®, Realogy Holdings Corp, HomeServices of America, Inc, Re/Max Holdings, Inc and Keller Williams Realty, Inc.  The suit, which can be accessed using the link below, seeks to ban this type of commission arrangement.

Christopher Moehrl v The National Association of REALTORS®

Continue reading “Who Pays The Buyers Agent?

Mortgage Fraud Risk Report Shows Missouri In Top Five Increased Risk States

CoreLogic just released it’s 2017 Mortgage Fraud Report in which Missouri made the list of the five states with the highest year-over-year risk growth for mortgage fraud.  The two types of fraud Missouri made the list on were Transaction fraud risk and Undisclosed Real Estate Debt fraud risk.

Below are some national highlights from the report (all figures are based upon 2nd quarter 2017 compared with 2nd quarter 2016):

  • Occupancy Fraud Risk increased nationally 7%
  • Transaction Fraud Risk increased 3.9%
  • Income Fraud Risk increased 3.5%
  • Property Fraud Risk decreased 1.9%
  • Undisclosed Real Estate Debt Fraud Risk decreased 2.7%
  • Identity Fraud Risk decreased 7.3%.

 

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New Landlord-Tenant Bill Make Force Missouri Landlords To Use Property Managers-UPDATED Feb 3, 2017

UPDATE February 3, 2017 –

Representative Gary Cross has introduced HB 705 which would repeal this legislation.  Ironically, Rep Cross is the representative that first introduced the original legislation, HB 1862.  I’m guessing he has come to realize the problems this legislation has caused, which I believe were unintended consequences, and has chosen to fix the issue which I praise him for!

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This legislative session, the Missouri State Legislature passed HB. 1862, which modifies provisions relating to the existing landlord-tenant law in Missouri, specifically, it repeals sections 534.350, 534.360, 535.030, 535.110, 535.160 and 535.300 of the Revised Statutes of Missouri and replaces them with five new sections as described in the bill.  The bill has been delivered to Governor Nixon and, if signed by him, will go into effect August 28th of this year.

Why This New Law May Force Landlords (even licensed real estate agents) To Use Property Managers:

While this bill has some good things in it, such as establishing some reasonable procedures and time lines for a landlord regaining possession of a property as well as doing a little housekeeping with regard to what can be deducted from a security deposit, the bill also makes, what I believe to be, a very damaging change to the law with regard to security deposits.  With regard to security deposits held by landlords, the bill changes section 535.300 (2) to read (emphasis is mine):

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Continue reading “New Landlord-Tenant Bill Make Force Missouri Landlords To Use Property Managers-UPDATED Feb 3, 2017

Judge Issues Temporary Restraining Order To Stop St Louis County From Implementing Rental Licensing Ordinance

Yesterday, St. Louis County Circuit Court Judge Gloria Reno granted a temporary restraining order against St Louis County to stop implementation of their recently adopted rental licensing ordinance.  This is a huge victory for landlords, and property owners in general, as the new ordinance, as I wrote about previously,  trampled property rights in many ways.

In response to the passage of the landlord licensing ordinance, the St Louis Association of REALTORS® file a lawsuit against St Louis County on December 29, 2015 in an effort to stop the legislation.

Hopefully, the temporary restraining order will be become a permanent injunction by the time the case comes to a close.

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