by Drew Thompson | Sep 7, 2024 | Industry, News Feed
They’ve been fighting since 2020, and now NAR plans to take the Department of Justice to the nation’s highest court to enforce a previous settlement.
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Each week on The Download, Inman’s Christy Murdock takes a deeper look at the top-read stories of the week to give you what you’ll need to meet Monday head-on. This week: They’ve been fighting since 2020, and now NAR plans to take the Department of Justice to the nation’s highest court to enforce a previous settlement.
So much of the legal wrangling that’s been talked and written about in recent years has been consumer-focused, with consumer watchdog organizations — not to mention buyers and sellers themselves — at the center of the conversation about what’s wrong with the way Realtors do business.
Looming over these since the National Association of Realtors’ settlement, however, has been the question of what the Department of Justice thinks about the way Realtors do business — and what changes it might seek to mandate.
Back in 2020, the DOJ simultaneously announced a lawsuit against and settlement with NAR, focusing on rules that federal officials views as anticompetitive. Subsequently, the DOJ resumed its probe and, in 2021, withdrew from the settlement.
Now, in a court filing, NAR has stated that it plans to file a petition for a writ of certiorari — a request for case review — to the Supreme Court by Oct. 10. This comes about a month and a half after NAR suffered a setback in the case after an appeals court refused the trade group’s request for a rehearing.
EXTRA: Kevin Sears opens up about NAR and the DOJ
Since NAR’s struggles and agent uncertainty appear to be far from over, it’s essential to watch your p’s and q’s when it comes to the trade group — and the way you do business. There’s no question that the industry and its professional organizations are under scrutiny, so act accordingly.
Massachusetts broker Nadine Hiser outlines the differences between NAR-affiliated brokers and independents like her — and why her company, Key Realty Group, made the choice to leave NAR.
Selling real estate under the new commission rules is like playing Red Light, Green Light on a tightrope, bicoastal agent Cara Ameer writes. Here’s how her business has been since the change.
EXTRA: Lamacchia: Knock off the threats to hardworking real estate agents
Bernice Ross talks with Patrick Stone, chairman and founder of Williston Financial, about interest rates, new construction and the 2024 election.
EXTRA: 8 non-negotiables for business ethics in 2024
by Drew Thompson | Aug 30, 2024 | Industry, News Feed
Inman Connect is moving from Las Vegas to San Diego in 2025 and it’ll be bigger, better, and bolder than ever before. Join us for Inman Connect San Diego on July 30-Aug. 1, 2025 with the brightest minds in real estate to shape the future of the industry. Reserve your spot today for an exclusive discount.
Looking for a quick catch-up on the buzziest stories of the week? Here’s Inman Top 5, the most essential stories, according to Inman readers.
And don’t miss The Download, our weekly column that breaks down one of the top stories of the week and equips you with what you’ll need to meet next Monday head-on.
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Eight Realtors are seeking class action status in their lawsuit against Realtor.com for allegedly selling unvetted and fraudulent buyer and seller leads. This is the third lawsuit against Realtor.com and parent company Move over its lead gen business.
In a new report, University of Buffalo contracts law professor Tanya Monestier details ways in which contracts allow buyer agents to collect more compensation than agreed-to with the buyer.
Photo by Andrew Harnik/Getty Images
“Americans should not have to pay more in rent because a company has found a new way to scheme with landlords to break the law,” Attorney General Merrick Garland said on Friday.
Trainer Rachael Hite breaks down the latest viral TikTok trend and gives guidance on whether real estate agents should hop on the bandwagon.
With confusion around the new commission rules, compliance expert Summer Goralik unpacks whether listing agents should verify signed buyer-broker agreements before showing a property.
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by Drew Thompson | Aug 26, 2024 | Industry, News Feed
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
Eight Realtors from California, Nevada, Washington, Florida, Georgia and New York State have filed a class action complaint against Realtor.com parent company Move for the alleged sale of unvetted and fraudulent leads through Move Network sites, including Realtor.com, ListHub and UpNest.
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Move parent company News Corp and real estate lead generation technology platform Opcity and The National Association of Realtors are named as co-defendants for their role in the alleged scheme to sell fake buyer leads. The plaintiffs are seeking damages equal to the amount they spent on Realtor.com leads alongside any punitive and exemplary damages approved by the Court.
“Defendants’ unlawful conduct alleged herein is so widespread that it has caused harm to the goodwill of each prospective class member and the residential real estate agency (and brokerage) business as a whole,” court documents read. “Defendants have previously been sued for nearly identical conduct and resolved such lawsuits; but yet continue to operate the Scheme and the fraudulent and unlawful business practices alleged herein.”
The lawsuit claims Move scrapes data from owned, controlled, operated and affiliate websites, web properties, digital and social media sites to gather information about users who are searching for common real estate terms (e.g., real estate, property, house, mortgage) or seem to be in the market for other large, non-real-estate purchases, such as vehicles.
These users are then presented as fully-vetted, high-intent leads on Realtor.com’s suite of buyer and seller lead generation solutions, including Connections Plus, ReadyConnect Concierge (formerly Opcity), Market VIP and ListHub. Beyond the alleged selling of no-intent leads, the suit also claims some leads cannot be verified as an “actual, living human being.”
The lawsuit alleges 40 to 50 percent of Realtor.com leads have no intent to purchase real estate or cannot be verified as a real person. Furthermore, they said, Realtor.com sells the same group of leads (a minimum of 36-40 per month) to multiple agents — breaking a promise of lead exclusivity.
“Defendants further misled, defrauded and intentionally deceived each of the Plaintiffs (and each potential member of the class) by representing that by paying subscription fees, enhanced subscription fees and other payments; each such real estate agent was obtaining specific benefits which had a high likelihood to generate business and clients for each such real estate agent,” court documents read.
The plaintiffs said they notified Realtor.com about the issues with low quality leads and requested refunds. However, Realtor.com’s sales team either denied refund requests, offered credits that could be used to purchase more leads, or suggested agents purchase higher-tier subscriptions to get better lead quality.
“Each such Plaintiff complained about the Fake Leads and sought refund(s) and/or partial refunds from the Defendants,” court documents read. “However, the Defendants then would engage in the Attrition Program (which included showing or reciting the Fraudulent Terms to each such Plaintiff) and asserting that each such Plaintiff was not entitled to any such relief.”
“In each such situation, Defendants failed and refused to refund the monies paid by the applicable Plaintiff and/or to offer any reasonable make-good therefor,” it added.
The suit claims senior executives, managing agents, managers, directors and officers at News Corp, Move, Realtor.com and NAR knew of agents’ growing complaints about lead quality and “willfully and consciously” ignored the alleged sale of unvetted and fraudulent buyer and seller leads.
The plaintiffs specifically called out NAR for allegedly “aiding and abetting,” as they trusted Realtor.com’s products and services due to its connection with the Association.
“NAR is (and at all times was) independently and intimately aware of the Scheme and complicit therein through NAR’s relationship with and reliance upon the other Defendants to build its membership ranks,” court documents read. “NAR allows and contributes to its affiliation with its co-defendants to act as a broad endorsement of the conduct alleged herein (and the co-defendants’ Fraudulent Scheme itself) so that the Plaintiffs and each member of the prospective class trusted and relied upon NAR’s affiliation with the other Defendants and based at least in part on that relationship chose to do business with the other Defendants.”
“NAR actively and passively induced each of the Plaintiffs (and each member of the prospective class) to do business with the Defendants,” it added.
When asked about the suit, a NAR spokesperson said the Association “does not own or operate Move, Inc.” and “will address these false allegations in court.”
Inman also reached out to Realtor.com, and will add their statements when available.
This isn’t the first Realtor.com has been sued over its lead generation business. In 2018, two real estate agents and a former Move sales representative filed separate suits in the Los Angeles Superior Court with claims that Move/Realtor.com willfully misrepresented the quality of leads they sold to agents.
In one suit, California agent John Herkenrath and Ohio agent Tina Wilson said they paid $500 and $120 per month, respectively, for buyer leads. However, Herkenrath and Wilson said the leads were “useless” as they included the wrong contact information or weren’t interested in purchasing a home.
Meanwhile, former Move sales representative Brian Bobik’s suit alleged he was wrongfully terminated for refusing to defraud agents by charging them for services they never ordered or received, or charging their credit cards without authorization. He also claimed Move refused to accommodate his disability, attention deficit disorder.
Bobik’s lawsuit was dismissed without prejudice in April 2019. Herkenrath and Wilson’s suit was dismissed without prejudice in January 2020, after they failed to file a timely response to a court order. Both parties had two years to refile the suits after the dismissals; however, they didn’t.
Read the full filing below:
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by Drew Thompson | Aug 23, 2024 | Industry, News Feed
Women’s real estate advocate Bobbie Wasserman shares strategies for overcoming hurdles and obstacles that sometimes block women from optimizing the financial potential of real estate ownership.
Whether it’s refining your business model, mastering new technologies, or discovering strategies to capitalize on the next market surge, Inman Connect New York will prepare you to take bold steps forward. The Next Chapter is about to begin. Be part of it. Join us and thousands of real estate leaders Jan. 22-24, 2025.
The real estate commission change is here. As of Aug. 17, 2024, listing agents no longer advertise the commission they are willing to pay — if any — to buyer agents on MLSs. For sellers, the change potentially saves money in the form of less commission paid to their agents. For buyers, it potentially means spending less on home purchases to cover the cost of a real estate agent’s expertise.
For women homebuyers, the new commission landscape might be particularly daunting. According to a Yale School of Management study, single women still lag behind men when it comes to wealth accumulation achieved through home equity.
The study found that women still pay more to buy a home and usually walk away with less profit when they sell.
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Earlier this year, Zillow teamed up with the National Fair Housing Alliance to survey homebuyers, and the results found that the purchasing process is even more complicated and filled with hurdles for women of color and noted that a racial wealth gap still exists in 2024.
The commission structure change only adds more uncertainty to an already complicated process for some women — particularly regarding the financial implications of the purchase, negotiation dynamics involved in a home purchase and home maintenance.
Financial implications
Women already encounter financial challenges in the homebuying process compared to men — including income disparities, wealth accumulation, financial literacy and confidence, and access to credit. The added burden of formally hiring a buying agent and negotiating a commission could increase the risk of unintentional errors with long-term consequences.
Here are a few tips that can help your female clients better navigate the home purchase process while building trust and credibility in the process.
Understand and acknowledge financial concerns
Take the time to listen to concerns without rushing the conversation. Provide budgeting guides, and offer strategies for leveraging financial assistance programs, grants or lower down payment mortgage options.
The housing affordability crisis has prompted many states to offer special programs. Remember, women can be “first-time” homebuyers at every stage of life — a young professional, a veteran, a seasoned professional, or purchasing a home solo after a divorce or spousal death.
Understand that women process information differently than men and may need more time and information to feel confident in their decisions. You can empower them by giving them all the necessary information and the space to make decisions at their own pace.
Guide your client through the entire home purchase process. If your client encounters obstacles in securing a mortgage, assist them in finding lenders who offer fair terms and explain the importance of comparing loan offers. Demystify the process.
Negotiation dynamics
The vast majority — 89 percent, according to NAR — of homebuyers use real estate agents or brokers to purchase homes, and a major reason for this is the agent’s ability to negotiate effectively.
It is essential to explain your negotiation process and expertise. When working with women homebuyers, providing a more detailed explanation of what to expect can significantly enhance their understanding of the process while demonstrating the value you bring.
Be prepared to discuss the following:
- Negotiation style: Women homebuyers value clarity on how your negotiation approach aligns with their preferences and needs. Share examples of how your negotiation tactics have benefited past clients, and explain what sets your approach apart from other agents.
- Negotiations: Detail how you prepare for successful negotiations and how you plan to involve the buyer in this process. This helps women feel more confident and informed about the steps they will take to secure the best deal.
- Protecting client interests: Clearly outline how you protect your client’s interests during negotiations, especially in situations involving multiple offers or counteroffers. Discuss your strategies for recommending contingencies and ensuring the buyer is well-protected.
- Effective communication: Explain how frequently you provide updates, and involve the buyer in the decision-making process. Effective communication is key to building trust and credibility and ensuring the buyer feels supported throughout the transaction.
- Paying the right price: Describe how you assess the true value of a property before entering negotiations. This can alleviate some financial anxieties and instill more confidence in the process.
Home maintenance planning
The cost of homeownership is a frequent topic of discussion within the Single Lady Estates community. As a buyer agent, you can play a crucial role in setting your clients up for long-term success by emphasizing the importance of maintenance planning right from the start.
By sharing trusted personal contacts — such as dependable contractors and service providers — and recommending popular home maintenance apps, agents can empower new homeowners to take proactive steps in protecting their investments.
Encouraging clients to prioritize these essential aspects early on not only enhances the homeownership experience and safeguards the value of the property but also reinforces an agent’s value.
Remember this
As the real estate commission structure undergoes significant changes, the challenges faced by women homebuyers are more pronounced than ever.
Navigating the financial implications, understanding the nuances of negotiation dynamics and planning for long-term home maintenance are crucial steps that can provide for successful homeownership. Your ability to guide women through these complexities enhances their homeownership experience and solidifies your role as a trusted partner.
Bobbie Wasserman is the founder and CEO of Single Lady Estates, a real estate resources and advocacy company that empowers women through the entire homeownership journey – buying, selling and life in between.
by Drew Thompson | Aug 1, 2024 | Industry, News Feed
HomeLight CEO Drew Uher says he’s glad to be out of the mortgage business. Fathom CEO Marco Fregenal sees value of being in lending “in a very selective way.”
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For real estate brokerages looking for opportunities to win in the post-commission lawsuit era, getting into the mortgage business might look like a tempting opportunity to generate additional revenue.
Brokers and agents attending Inman Connect Las Vegas are getting perspectives on the pros and cons of delving into mortgages from several points of view.
Those points of view include HomeLight founder and CEO Drew Uher — who’s been there and done that — and Fathom Holdings CEO Marco Fregenal, who still sees value in being in the mortgage business “in a very selective way.” LoanDepot CEO Frank Martell is urging Compass to think twice about expanding into lending.
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A 2023 Best of Proptech Inman award recipient, Uher launched HomeLight in 2012 as an agent matching site with backing from Google Ventures, among others. HomeLight got into the mortgage business with the 2019 acquisition of digital mortgage lender Eave, which became HomeLight Home Loans.
Uher said HomeLight has since exited the home loan business, and that he has “a newfound respect for the mortgage industry.”
“If you rewind to 2021, [we had a] slide in our investor deck of … the billions and billions of dollars of revenue that we’re gonna do in the future … huge growth coming out of mortgage,” he said.
What HomeLight learned was that mortgage lending is “a very people-intensive business” that Uher said he’s happy to leave “to the people who are really good at it, who specialize in it. Our unit economics now look much more like software margins than they did a few years ago.”
According to records maintained by the Nationwide Mortgage Licensing System and Registry, HomeLight Home Loans Inc. holds licenses in 34 states and Washington, D.C., and at last count sponsored 13 mortgage loan originators.
HomeLight continues to partner with mortgage lenders on its power buyer and cash offer services, which it expanded with the 2022 acquisition of Accept.inc.
“The way the ‘buy before you sell’ product works, we used to do the mortgage in that transaction — that used to be how we would monetize it,” Uher said. “By stepping out of that, and by letting the agents’ preferred lender do the mortgage, we are no longer creating friction between the agent and the lender. We can actually leverage the lender as a channel.”
Fathom, which provides real estate brokerage, mortgage, title and insurance services, got into the mortgage business in 2021 with the $26.75 million acquisition of E4:9 Holdings and its three operating subsidiaries, Encompass Lending Group, Dagley Insurance Agency and Real Results. Although Fathom ended up selling Dagley back to its founder this year, it expanded its presence in lending by acquiring Washington, D.C.-based Cornerstone First Financial.
Fregenal said that while mortgage lending is a small part Fathom’s business, it can be a valuable tool in facilitating transactions.
“I think what makes Fathom unique is that we’re not trying to do everything for everyone,” he said. “Our goal is to facilitate a transaction. We use mortgage in a very selective way.”
Fregenal said Fathom is focused on helping its agents, and Encompass “has helped get deals done. But I agree you have to be hyper-focused on what you do well.”
LoanDepot President and CEO Frank Martell also warned real estate brokers and agents on Wednesday to think “long and hard” before getting into the mortgage business, calling it “a very complicated, highly regulated industry.”
Martell also serves as a board member for real estate brokerage Compass, and panel moderator Clelia Peters said he’s been advising the company on a possible expansion into home lending.
“He told me backstage that he was really encouraging [Compass to] step away from thinking about that type of integration,” Peters said Thursday.
Uher noted that “Zillow is leaning heavily into [mortgage], which I don’t understand at all. Usually, loan officers are the ones paying for Premier Agent subscriptions, and so it’s like they’re biting the hand that feeds them.”
Fregenal said the mortgage industry is doing pioneering work in artificial intelligence, and being exposed to that has been useful for Compass.
“The mortgage industry is doing a lot of work on AI [that] has caused them to really think about the process, right?” he said. “To think about how they spend money, how long it takes to get a mortgage. So for us, having a mortgage business also helps us understand that — how do we simplify that process as well?”
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