Recent real estate commission lawsuits have led to less information in the market, leaving buyers and sellers uncertain about commissions.
As a real estate professional, I’ve received many questions about the ongoing real estate commission lawsuits and their impact on the market, especially given the changes we’ve seen in recent months. One question I hear often is about the immediate and long-term effects of these lawsuits. Here’s what you need to know:
The proximate effect. When it comes to the Morrel, Ketchmark, and similar lawsuits, the most important point is that the $1.8 billion settlement did not benefit the average homebuyer or seller. I didn’t receive any compensation, and neither did most people involved in day-to-day real estate transactions. The money primarily went to attorneys and a few plaintiffs who were directly part of the cases.
The payouts were covered by insurance companies, which are expected to raise their premiums. Large brokerages involved in the settlements will likely do the same. While a handful of individuals may have gained financially, most saw no real benefit. The legal teams were the ones who profited the most.
“Buyers and sellers need to stay informed and take control of this market more than ever.”
The current effects in Toledo. Looking at the local market in Toledo, one thing is clear: information is lacking. Sellers are unsure if they need to pay the agent representing the buyer, and buyers often do not understand what commission costs they are responsible for.
This confusion has led to hesitation in transactions. Without clear guidance, people are entering deals without knowing what to expect. This uncertainty slows down the process, makes negotiations harder, and reduces the number of successful closings.
Why did this happen? What we’re seeing is the result of a flawed legal system heavily influenced by trial attorneys. Our courts are overwhelmed with lawsuits, and in many cases, attorney interests are prioritized over market stability and consumer welfare.
Additionally, the real estate industry has been poorly managed by the National Association of Realtors (NAR). The NAR, which should be focused on protecting the interests of real estate professionals, has been led by individuals with little to no actual business experience. These leaders have been more focused on their personal gain than on improving the industry. They’ve mismanaged funds and allowed corruption to take root, ultimately leading to the current state of affairs.
What you can do. If you’re planning to buy or sell in today’s market, it’s more important than ever to be informed. The landscape has changed, and there are new rules to navigate. I’ve put together a special report to help guide you through the new realities of real estate. It’s important to educate yourself so you can make the best decisions for your situation.
I hope you find this information helpful. If you have questions or need guidance, just reach out. You can call me at 419-466-SOLD or send an email to jon@modene.com. I’ll be happy to help.
