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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

Why the world is looking at HEB as the model for preparedness

(BUSINESS NEWS) HEB didn’t react quickly, they had been planning and putting processes in place for years. Businesses that want to live through hard times need hard plans.

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HEB store front

In the midst of COVID-19, there seems to be a grocer retailer that should be recognized for how they quickly adapted their processes and supply chain as it relates to providing one of the most essential items we all need: groceries.

HEB is a regional grocer with over 400 stores in Texas and Mexico. In January 2020, they were recognized by Business Insider as being one of the best grocery stores in America. Now if you live in Texas for example, you probably have your own reasons why you love HEB (based in San Antonio, TX) but here are some reasons to truly appreciate their leadership, management and partners even more.

They actually have been working on their pandemic and influenza plan since 2005. When Hurricane Harvey hit Houston and surrounding areas extremely hard in 2017, HEB was instrumental in helping the communities to rebuild. They have done an incredible number of things like:

  • Implementing a Director of Emergency Preparedness
  • Offering raises to their store managers and employees (called partners) as a great incentive to keep up their great efforts and work
  • Allowed the partners flexibility in sick leave
  • Worked with supply chains early on identify areas that needed additional attention and how to still manage daily shipments of food and other grocery items
  • Put in signage in stores and setting up lines to help manage the amount of people in stores and the guides for social distancing
  • Adjusted store hours so that there would be ample time to re-stock overnight to meet consumer demands
  • Set limits on some items early on so that more customers would have access to those that they need
  • Continue to monitor the situation and adjust as needed
  • Received praise even from the popular Bren Brown about their Daring Leadership

While we continue to navigate what our day to day looks like, it seems like a great idea to take learnings from who is doing it well and give praise to those that are aiding however they can in this current climate and we are forever grateful for access to groceries, toilet paper and other things – thank you, HEB.

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Business News

34 places to find open remote jobs available now

(BUSINESS NEWS) With everything seeming in flux and uncertainty, there are still companies with open positions who are looking to hire people right now, so jump to it!

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It goes without saying that these are difficult and unusual times. The number of Americans that have filed for unemployment has hit over 6.6 million and many more will be adding to that number in the coming weeks. In March alone, 701,000 jobs were cut by employers in the United States.

A Job Quality Index, developed by Cornell Law School and others, finds that 37 million jobs may be at risk. A

ccording to the study, “The list assumes that the COVID-19 crisis does not ultimately result in widespread, long-term, layoffs of goods-producing workers (i.e. that the crisis will be of modest duration). It focuses on those workers in sectors that are effectively being forced to shut down as a result of social-distancing recommendations or shelter-in-place requirements.”

While everything is changing around us every single day, something that remains a constant is a fact that people need money. Online businesses, delivery services, grocery stores, and the like are busy like they’ve never been before. As a result, a number of companies within these industries are looking to hire people immediately.

We even have our own Facebook Group dedicated to remote work, Remote Digital Jobs.

Check out the list below to see 34 companies or search sites that offer remote jobs currently open:

Aetna
Amazon
AngelList
A Place for Mom
Apple
BMarko Structures
Bellhops Online Service
Collage.com
CVS
Dollar General
Domino’s
DoorDash
GrubHub
Humana
Instacart
Intuit
Kelly Services
Kroger
Lionbridge
LiveOps
Nielsen
Outschool
PagerDuty
Papa John’s
Pizza Hut
PepsiCo
Publix
Redox
Rosetta Stone
UnitedHealth Group
Walgreens
Walmart
Williams-Sonoma
Worldpay
Xerox
Zoom

Additionally, Get Hired via LinkedIn is continuously updating who is currently hiring. According to the description from curator Andrew Seaman, “Companies from industries spanning from technology to retail are hiring to meet increased demand caused by the coronavirus pandemic. Below is a regularly updated list of companies hiring right now.”

As noted, the list above are all companies and sites offering remote/work-from-home positions. The Get Hired list may include positions that require on-site work.

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Business News

Debunking ridiculous remote work myths (and some serious survival tips)

(BUSINESS) People new to remote work (or sending their teams home) are still nervous and have no concept of what really happens when people work from home. We’ll debunk that.

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With an entire nation (or planet) moving to a remote workforce in the midst of a global pandemic, we’re hearing some pretty wild misunderstandings of what remote work is, and how it functions effectively. Bosses are scrambling to buy up spying tech for some good ol’ hamfisted enforcement.

For those of us who have been remote for ages, it’s fascinating to watch the transition. And also offensive. People tweeting about getting to take naps and not wear pants. That’s not remote work, that’s just you being unsupervised like a child for five minutes, KEVIN.

I was chatting with my buddy Michael Pascuzzi about remote work (full disclosure, he’s a Moderator in our Remote Digital Jobs group) and despite cracking many jokes, we realized there is a lot of noise to cut through.

In the spirit of offering meat for you in these hungry times, Michael offered to put his thoughts on paper. And why should you listen to him? It’s because he has worked for several tech companies, both startups and enterprises including TrackingPoint, 3DR, and H.P. He currently works remotely for Crayon, a Norwegian Digital Transformation, and Cloud Services company. He holds an M.B.A. in Digital Media Management from St. Edward’s University and a B.A. in Art History from the University of Connecticut. He’s also wonderfully weird. And a remote worker.


In his own words below:

So you’re working remotely now. Cool.

At first, it feels.. strange. But, as you get into it, you’ll get comfortable with your routine.

I’m sure you have a preconceived notion of remote workers. You probably thought this type of work was just for Unabombers and nomads. Maybe you don’t think you have a real job any longer because you’re doing it in your Underoos.

While, yes, working from home does allow you the option to work in your underwear, you still probably shouldn’t. There’s a lot to working from home and getting work done. You’re going to get a crash course in the coming weeks. I’m going to give you a leg up on your peers by telling you what you really need to know and what nobody else is telling you about remote work.

The following is a cheat sheet to getting ahead of your peers – and maybe make a case for you to continue in this lifestyle after the pandemic has subsided.

1. Working remotely doesn’t mean playtime

Right now, you’re roughly one week into your new working arrangement. You’ve got your table, your computer, and your whole set up. You’re also taking advantage of:
– The creature comforts of home
– Nobody looking over your shoulder

Irish coffees for breakfast, no pants-wearing, and naps during lunch are all available to you now that you work from home. And let’s not forget about #WhiteClawWednesdays!

These are all terrible ideas.

Here’s why:

If you come to a phone/video meeting drunk, we’ll know. If you’re on a video call with bedhead and a wrinkled shirt, we’ll assume you’re unprofessional. White Claw Wednesdays are probably okay in moderation, but taking a shot every time Karen says something annoying on a conference call is a bad idea!

Working from home should be an enjoyable and comfortable experience, but it shouldn’t be fun. It’s still work; and work sucks.

2. Working remotely should give you a better work/life balance:

Initially, you’ll find it hard for you and for your employer to separate your work hours from your life hours. Staying working only during your work hours is VITAL to keeping your sanity. Microsoft Office 365 has a tool that measures your wellbeing in “My Analytics.” Below is a picture of my wellbeing for this month. It’s not good.

digital accounting of wellbeing

The leadership team and managers at my company stress wellbeing. We take that chart seriously, and failing to have quiet days doesn’t make you look like a hard worker. Hard workers get shit done 8-5.

3. Working remotely also doesn’t mean firing the nanny

Working remotely doesn’t equal additional family time. Your work hours are your work hours. The pandemic quarantine doesn’t leave a whole lot of options for families to coexist without overlapping.

And it’s okay to occasionally have a “coworker.” But, you need to create your own private workspace within the hustle and bustle of homeschooling going on around you.

Here are a few more best practices you won’t read anywhere else:

You’ll need to learn to distance yourself from “work” when no longer at your “office.” This means powering down at the end of the day. Having a work/life balance when you work from home tends to swing in the opposite direction than you probably assumed; work can take over your life.

  • You’re going to have to turn off mobile notifications 100% of the time. It’s a pandemic, you’re not traveling; you don’t need them on – ever.
  • Turn off your computer at the end of the day. It’s good for your computer, and it’s fantastic for your mental health.
  • If your manager needs to reach you or you need to contact a direct report, just follow the wise words of Kim Possible: Call me, beep me if you wanna reach me.
  • You must wear pants. (FYI guys, dark leggings look like real pants and are super comfortable) Get ready for your day as if it were a regular office. Take a shower, shave, comb your hair, eat breakfast in the kitchen, wear jewelry. Look like you give a damn.

  • You must turn on your camera for video calls (and please don’t take your laptop into the bathroom. no field trips). Nonverbal communication accounts for 93% of all communication. We need to see your face, your posture, your eyerolls.
  • All of your calls should be video calls. You’ll find you’ll miss humans if you do not see them daily.
  • Clean the room (or at least directly behind you). We shouldn’t see laundry and quarantine snacks in the background. We absolutely should never HEAR you opening a bag of chips.
  • Close your door. Kitchen, office, bedroom… whatever you’re using needs to be YOUR space. It’s your office. Your clubhouse. Only one Homer allowed.

And for the love of all that isn’t COVID, please wear pants.

More resources:

I’m on a team at Crayon that freely consults on working remotely and cloud technology. This isn’t a sales pitch. If you have questions or need productivity tips, you can always email my team directly at contact.us@crayon.com.

Meanwhile, here are some additional resources to dig into:

  1. 20 tips for working from home
  2. Guide to engaging a distributed workforce
  3. Top 15 tips to effectively manage remote employees
  4. How to make working from home work for you

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