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Real estate commissions are negotiable, no matter what any lawsuit says

(FINANCE) An anti-trust lawsuit against major players in the residential real estate industry sheds light on misinformation and misunderstandings about commissions – when you’re buying or selling a home, you’re in the driver’s seat. Negotiate!

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Minnesota home seller, Christopher Moehrl, has filed an class action anti-trust lawsuit [in April], alleging a “conspiracy” to price fix broker compensation in the 2.5-3% range, naming the National Association of Realtors (NAR), Realogy, HomeServices of America, RE/MAX, and Keller Williams (with more to be named, inevitably).

The complaint intimates that by requiring brokers to offer buyer broker compensation when listing a property on the MLS, fees are “fixed” and inflated, violating anti-trust laws. In short, they believe buyer’s agents shouldn’t be paid because buyers can find their home online now.

The class action suit claims that because the seller has to pay the buyer’s agent, commissions are inflated. The truth is that although it is NAR’s rule to require compensation, it could be as little as one cent, and Associations support all compensation models (flat-fee, discount, rebates, traditional 3% per side, and even higher on luxury listings).

Let’s take a look at some of the court documents directly:

8. Defendants’ conspiracy has kept buyer broker commissions in the 2.5 to 3.0 percent range for many years despite the diminishing role of buyer brokers.

This point continues to outline how buyers agents are essentially useless in an era where homebuyers have direct access to listings and can find their own home online. That claim is similar to claims made by anti-Realtor bloggers in the early 2000s, and is wildly uninformed. All agents, no matter which side they represent have a fiduciary duty to their client, negotiate on their behalf, and walk them through (and oversee) a complex financial process.

Beyond that, buyer’s agents are often the person that has to inform a buyer that their dream home they found on Zillow (or other sites that use non-MLS data) actually sold several days ago, or was not real to begin with.

They’re the individuals that have to not only be educated on real estate law and contracts, lending options and processes, but be experts in a certain geographical area and be informed of architectural styles, smart home features, green home features, and so on.

The indication that a buyers agent’s sole value is to pair a homebuyer with a home is ludicrous and objectively false.

17. In that sales transaction, Mr. Moehrl was represented by a RE/MAX franchisee, and the buyer was represented by a Keller Williams franchisee. As part of the sales transaction, Mr. Moehrl paid a total broker commission of six percent, and 2.7 percentage points of the six percentage points were paid to the buyer broker.

It is important to note that it is not illegal to buy or sell a home without representation. It happens every day across this nation. If there was a legal requirement to hire a real estate professional, this lawsuit might have merit. But there is not.

Further, the fact that the buyer broker was only given 2.7 percent indicates that Moehrl negotiated against the supposed 3.0 percent standard the lawsuit is so aggressively fighting against.

Obviously this home seller knew he could negotiate commissions.

Not only did the Plaintiff not have to hire a Realtor, he didn’t have to allow any negotiation of the compensation, given that the buyer side earned 2.7 percent, and his own Realtor earned 3.3 percent.

38. As required by the Buyer Broker Commission Rule, the seller broker makes a blanket, non-negotiable offer of a three percent commission to the buyer’s broker when it lists the home on the local MLS.

The Plaintiff’s attorneys have clearly not done any homework. Compensation is required, that is factual, but there are no bylaws that dictate the amount. It can be as little as one cent. Or as high as 100%, it is all negotiable. All of it.

63. For years, buyer broker commissions have remained steady at two-and-a-half to three percent in the areas in which the Covered MLSs operate despite both an increase in home prices (increasing the dollar amount of the commission) and the diminishing role of buyer brokers described above.

NAR does not track or store broker commission data, and while brokerages individually do, they don’t uniformly or openly share that information with any competing brokers. There is no conspiracy regarding commissions.

The responsibilities of a buyer broker have actually increased over time, not diminished. Ask a broker in 1980 if they had to be well versed in modern marketing, social media strategies, analytics, paperless contract technologies, know the privacy laws regarding the collection and dissemination of information online, and so forth.

To repeatedly argue that anything other than market conditions have determined commission levels is dead wrong. In fact, some would argue that commissions on both sides of the transaction should be higher (and therefore, some brokerages offer services at higher commission levels than 3%).

The takeaway is that all commissions in real estate are negotiable, it’s not a legal requirement to hire a real estate professional when buying or selling a home, and that buyer agent responsibilities and values have actually increased over time.

Anyone in America who doesn’t like a Realtor’s services offered at a specific commission level can negotiate or hire a different Realtor – there is no conspiracy here. This lawsuit has a variety of factually inaccurate statements regarding commissions, and is laughable.

This story was first published in April of 2019.

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Business News

How remote work has changed over the last decade

(BUSINESS NEWS) let’s reflect on how remote working and telecommuting has changed in recent years and look to how it will continue to change in the 2020s.

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As someone who often works remote, it’s interesting to see how much that means for work has evolved. The increase in commonality has been steady, and shows no signs of slowing down. Go Remotely has developed an insightful graphic showing the changes in trends regarding remote work over the years.

“For decades, the established economy dictated that you should pick one job, visit the same office for the next 40 years, and then retire,” reads the graphic’s intro. “However, recent remote working stats suggest the working world might be in for some revolutionary changes.”

From there, the graphic is broken down into five facets: Flexible Workspace Policy, Entrepreneurial Minds, Telecommuting is a Growing Trend, The Role of Companies in the Remote Working World, and The Future of Telecommuting.

With Flexible Workspace Policy, its suggested that telecommuting could be a solution for costly issues including lack of productivity caused by employee distractions, health problems, etc. It is said that employers lose $1.8 trillion annually due to these issues.

The end of 2018 found 35 percent of the US workforce working remotely. This is only expected to climb. Ten percent of employees don’t know if their company offers flexible work policies (this is something to check into!)

Bills and laws for virtual jobs passed by governments reflect the need for accessibility, economic stability, and emigration concerns. Companies with flexible work policies have reported seeing increases in productivity and profits. (Funny those both start with pro, no?)

With Entrepreneurial Minds, a few interesting things found include: remote workers are less likely to take off if they are sick, the majority reports better productivity when working alone, the majority reported lower stress levels. However, there is a problem with not being able to unplug after work which is an issue for some.

Telecommuting is a Growing Trend finds that there has been a seven percent increase between 2012 and 2016, with the majority (80-100 percent) reporting they work remotely. Industries seen embracing remote work include: transportation, computer/information systems/mathematical, arts/design/entertainment/sports/media, finance/insurance/real estate, law or public policy, community/social services, science/engineering/architecture, manufacturing or construction, healthcare, education/training/library, and retail.

The Role of Companies in the Remote Working World finds that the pros to hiring remote workers includes: finding talent outside of your geographic area, improves retention on work/life balance, increases productivity by decreasing commute time, and saves money by requiring less office space. The cons include lack of timeliness when it comes to receiving information from employers.

Finally, the Future of Telecommuting suggests that in 2020 the US mobile worker population will surpass 105 million (and will account for 72 percent of the US workforce). Hiring managers predict that telecommuting will increase tremendously, most skills will become even more niche over the next decade, and many think that 38 percent of their full-time workers will be working remotely in the next decade.

How do you feel about the increase in remote working and telecommuting?

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Business News

ClickUp team productivity app is gorgeous and wildly efficient

(BUSINESS NEWS) Seeking to improve your productivity and speed up your team, ClickUp is an inexpensive option for those obsessed with efficiency.

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Back again to obsess over productivity apps – ClickUp, is a project management tool seeking to knock the frustration out of PM. It’s getting some good reviews, so I gave it a try for a week by setting up my current job search as a project and getting a feel for the app. And as you’ve read in my other reviews, we will address features and design.

On the feature front, ClickUp offers a pretty standard set up of tools for a productivity app. What stands out first and foremost are the status options. In general, most productivity statuses are simple: not started, started, in progress, done, etc.

But ClickUp lets you set up custom statuses that match your workflow.

For example, if you’re doing instructional design projects, you may assign projects based on where they are flowing in an ADDIE model, or if you are a Realtor, you may have things cataloged by sold, in negotiation, etc.

Customization is king and custom status is the closest you get to building your own app. And if you like it simple, you don’t have to customize it. The assigned comments feature lets you follow up on specific comments that originate action items – which is useful in team collaborations.

You can also assign changes to multiple tasks at once, including changing statuses (I would bulk assign completion tasks when I finished applications that I did in batches). There a lot of features here, but the best feature is how the app allows you to toggle on and off features that you will or won’t use – once again, customization is front and center for this platform.

In terms of design and intuive use, ClickUp nailed it.

It’s super easy to use, and the concept of space is pretty standard in design thinking. If your organization uses Agile methodology, this app is ready for you.

In terms of view, you can declutter the features, but the three viewing modes (list, box, and board) can help you filter the information and make decisions quickly depending on what role you have on a board or project. There is also a “Me” board that removes all the clutter and focuses on your tasks – a great way to do focused productivity bursts. ClickUp describes itself as beautifully intuitive, and I can’t disagree – both the web app and mobile app are insanely easy to use.

No complaints here.

And the horizon looks good for ClickUp – with new features like image markup, Gannt charts (!!!!!! #nerdalert), and threaded comments for starts.

This application is great, and it’s got a lot of growth coming up to an already rich feature base. It’s free with 100MB of storage, but the $5 fee for team member per month that includes team onboarding and set up (say you’re switching from another platform) and Dropbox/Google Docs integration? That’s a bargain, Charlie.

ClickUp is on the way up and it’s got it all – features, a beautifully accessible UI, relentless customization, and lot of new and upcoming features. If you’re into the productivity platform and you’re looking for a new solution for your team, go check it out.

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Business News

Should you alter your business travel due to the Coronavirus?

(BUSINESS NEWS) Got a business trip coming up? Worried about the coronavirus spoiling those plans? Stay up to date and safe with this cool site!

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The Center for Systems Science and Engineering (CSSE) at John Hopkins University has created a website that tracks one of the biggest trends of 2020: the coronavirus. Also known as 2019-nCoV, this disease has already spread to over 40,000 confirmed cases worldwide, with over 900 deaths (as of when this article was published, anyway.)

Not to mention, the United States Center for Disease Control and Prevention (CDC) notes that we still don’t know exactly how the virus spreads from person-to-person. In fact, there’s quite a bit we don’t know about this disease and although some people are reported as recovered, it’s only a small fraction compared to how many are sick.

So, what’s so great about this tracker? Well, first of all, it updates in real time, making it easy to keep track of everything we know about confirmed cases of the coronavirus. It’s chock full of statistics and visuals, making the information easy to digest. Plus, with a map front and center, it lets you know exactly where there have been reported outbreaks – and how many people have been diagnosed.

Because the site sticks to cold hard facts like statistics and maps, it also means you can avoid the racism and general panic that’s accompanied news of this outbreak.

This is a great tool for staying informed, but it’s also extremely helpful if you’re going to be traveling for work. As the virus continues to progress, you’ll be able to see just how many cases of coronavirus there are in the areas you’re planning to visit, which will allow you to plan accordingly. Even if you don’t feel the effects, you can still risk passing it to other people.

(In fact, the CDC recommends those traveling from certain areas in China practice “social distancing” when they return to the US, avoiding public spaces like grocery stores, malls and movie theaters.)

Of course, if you have something planned several months from now, don’t cancel your conference plans just yet. A lot can happen in that amount of time, so avoid the urge to check the website every couple hours. It’s supposed to be a tool for staying informed, not staying stressed out.

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