If you’re curious about how attorney Mike Ketchmark managed to win a groundbreaking $1.8 billion class-action lawsuit against big names like the National Association of Realtors, Keller Williams, and HomeServices of America, you’ll find this podcast episode really engaging. This landmark victory is a true David versus Goliath story that’s set to change the real estate industry dramatically, likely resulting in lower commissions for both home buyers and sellers.
On March 15, 2024, the National Association of Realtors announced a significant settlement, agreeing to pay $418 million in damages and eliminate certain commission rules, concluding major antitrust litigation. This move is expected to reduce real estate commissions by 25% to 50%, which means the typical commission rate could drop from 6% to somewhere between 3% and 4.5%.
Misaligned incentives are a big problem in real estate transactions, especially when the seller is the one paying the buyer’s agent. I experienced this first-hand back in 2017 when I felt pushed into paying a 2.5% commission to a buyer’s agent who was trying to lower my asking price. Despite my reservations, I agreed because I wanted to simplify things with a newborn at home. After that experience, I promised myself not to sell another property until commission rates fell. I even started buying properties without an agent to avoid paying the buyer’s agent commission, which left a bad taste in my mouth.
It’s important to recognize that most real estate agents work hard and honestly; the issue is not with individual agents but with the systemic practice of price fixing that prevents commission rates from falling naturally due to market forces.
Mike Ketchmark’s career is impressive, particularly his work on contingency fee cases, where he doesn’t charge unless he wins. This approach means taking significant risks, but it allows him to fight passionately for his clients. For example, before the real estate case, he was known for winning a massive settlement in a case involving diluted chemotherapy treatments, showcasing his commitment to justice.
In terms of real estate commissions, since the verdict, I’ve noticed some brokers lowering their fees, and I’ve managed to negotiate lower rates myself. If you’re selling or buying a home, consider negotiating the commission rates or asking for rebates — these are now more plausible than ever thanks to the legal precedent set by the lawsuit.
Finally, if you found the podcast episode enlightening, consider leaving a review and sharing it to help spread the word about the potential for lower real estate commissions. This case shows that when consumers are informed and stand together, they can challenge even the most entrenched industry practices.
