National Tax Lien Association (NTLA)’s Post

For decades, the Department of Justice pushed for more competition in the real estate market — now the agency might be getting its way. Pressure from the DOJ's antitrust division likely played a role in getting to the game-changing class action settlement announced by the National Association of Realtors last Friday. We've been in their crosshairs for as long as I've been involved at the National Association of Realtors," NAR president Kevin Sears, a licensed Realtor for 20+ years, told hundreds in the industry at a conference in February. The writing was on the wall, Sears told the audience. His group faced an onslaught of lawsuits over the way commissions are offered — and the possibility of having to shell out more than $5 billion in damages in just one case. The DOJ, though, was "the bigger problem," he said. "The way we operate our business is going to change," he said. Either embrace and adapt, he added, or "it's going to be forced down our throats." Last Friday, NAR announced it would settle some of the class action lawsuits (including the $5 billy one) filed by home sellers, who alleged the industry group conspired with real estate companies to fix prices. The NAR said it would no longer allow real estate agents for home sellers to offer buyer agents commissions in real estate listings — a seemingly small fix with big implications, as we explained Monday. Even though the DOJ wasn't a party in the suit, it's been investigating the real estate industry for years — all the way back to the 1930s. More recently, it was a DOJ lawsuit that made it possible for sites like Zillow and Redfin to post real estate listings. During the Trump administration, the agency soldiered on with a lawsuit and settlement over anti-competitive practices. But in 2021, the agency filed to stop that agreement from going through. They argued it would have prevented the department from pursuing the NAR in the future. Their suit is still working its way through the courts. In February, the department filed an objection to a different settlement in a case over commissions in Massachusetts. The suit mirrors the big case that was settled last week. Between the lines: In filing that objection, the DOJ was effectively letting the industry know what kind of settlement would meet the department's approval. The deal announced last Friday looks a lot more like what the department said it would like to see: a "decoupling," where agents for home sellers no longer set commission rates for buyer agents. That objection was a game changer. "They got what they wanted," says Steve Brobeck, a senior fellow at the Consumer Federation of America. The court hasn't yet approved the settlement and the DOJ is still wading through its details. Already critics are saying the deal might not do the trick. And DOJ may find the deal, which still allows for the possibility of sellers negotiating to pay buyer agent fees, doesn't go far enough.

In a groundbreaking verdict, a Missouri Federal District Court awarded plaintiffs $1.8 billion in damages against the National Association of Realtors (NAR) and several major residential real estate brokerage firms. The jury determined that the NAR and participating brokerage firms had illegally colluded by requiring real estate sellers to pay artificially high 6% agent commission fees. This verdict upended the multi-trillion-dollar US residential real estate industry, as similar class-action lawsuits have been filed in state and federal courts across the country. The inflated commissions were shared with brokers representing home buyers, denying sellers or buyers the opportunity to individually negotiate lower commissions with their agents and effectively making buyers pay more for their properties. Stay tuned for updates on how this verdict will impact the industry going forward. #RealEstate #NAR #BrokerageFirms #ClassActionLawsuit #HomeBuyers #HomeSellers

Since the March 15 announcement of the proposed settlement of lawsuits against the National Association of Realtors, assessments of its impact on commission rates and even home prices have been making headlines. Right now, we know three things: First, beyond the 1.5 million Realtors in the United States, millions of people are interested in or passionate about real estate, fueling interpretations and predictions about the impact of this proposal. It is all speculation until the Department of Justice opines on the settlement offer. Second, real estate is local. Buying and selling of homes is conducted differently throughout the United States. In Connecticut, for example, Buyer Brokerage Contracts were first introduced in 1990, which was among the earliest in the nation. Agreements, now titled Exclusive Right to Represent Buyer, are required to provide clarity of services a buyer can expect from us and transparency regarding our fees. Third, commission rates are and always have been negotiable in Fairfield County. While discount brokerage models have existed for some time, our community has embraced professional, full-service representation. As part of the proposed litigation settlement, NAR plans to modify certain practices. For example, sellers may, but will not be required to, offer a commission to the buyer’s representative. Any such offer will not be included in its Multiple Listing Services. We believe this may change how agents are compensated for representing home buyers. But the underlying reasons why they are compensated remain. We’d be happy to discuss how we partner with our clients to achieve maximum success with minimal stress in each real estate transaction.

Putnam county recently auctioned off 160 foreclosed properties. This generated the county over $1.7 million in revenue and returning $6.2 million in assessed value to the tax rolls. The County Legislature approved the sale of 144 properties, with an average sale price of $10,751. The auctions were part of a broader effort to reduce the local tax burden per the county. As we continue to move beyond the post-COVID moratoriums and backlog, we may see counties launching larger auction initiatives such as this. Attorney Advertising: Prior results do not guarantee a similar outcome. https://lnkd.in/esePJgPR

I have an op-ed in the Detroit Free Press today about a forthcoming decision from the Michigan Supreme Court. The court is considering whether their ruling in the 2020 tax foreclosure case, Rafaeli v. Oakland County, applies retroactively. If the court decides it does apply retroactively, that means windfall profits (where properties sold at auction for more than tax debt owed) from prior to 2020 will need to be repaid to former property owners — well more than $100M in Wayne County alone. The decision would primarily benefit speculators and landlords, not former homeowners. Tens of thousands of Detroit homeowners, as I’ve extensively documented, lost their homes to tax auctions. So why wouldn’t they be the primary beneficiaries if tax auctions profits need to be repaid? Because “windfall profits” were rarely generated on their homes, relative to the scale of homeowners tax foreclosed. Speculators and landlords, on the other hand, often had portfolios of property in tax auctions. In instances where those sold for more than the debt owed, they would be owed a **portfolio** worth of windfall profits. Here’s just a couple examples from the 2018 tax auction: - 9 properties, owner in Livonia, MI, windfall profits: $106,000 - 5 properties, owner in Las Vegas, NV, windfall: $73,000 - 8 properties, owner in Dallas, TX, windfall: $53,000 Read more in the Free Press: https://lnkd.in/gq73Xafz

SECURED CREDITORS & RECOVERY ISSUES-PART 5 ISSUE: What are the circumstances which a chargor can rely on, in order to resist an Order for Sale or stop an auction in foreclosure proceedings? The leading case of Low Lee Lian v Ban Hin Lee Bank Bhd [1997] 2 CLJ 36 sets the precedent. If a chargor wishes to resist the making of an Order for Sale (by the Court or Land Office), he must show cause to the contrary within the definition of section 256(3) of the National Land Code. “Cause to the contrary within s 256(3) might be established only in three categories:- (i) when a chargor was able to bring his case within any of the exceptions to the indefeasibility doctrine s 340; (ii) when a chargor could demonstrate that the chargee had failed to meet the conditions precedent for the making of an application for an order for sale; and (iii) when a chargor could demonstrate that the grant of an order for sale would be contrary to some rule of law or equity. If no cause to the contrary could be shown, the court would be obliged to make an order for sale”. Recently we had a case where a Defendant filed an application to set an Order for Sale (OFS) by alleging, among others, that he had no knowledge of the proceedings & about the OFS. The chargor was present at all the hearing dates & when the OFS was granted. We opine that as a general rule, it is incumbent for Defendants' lawyers to get all the facts from their clients first before launching an attack based on limbs (ii) and (iii) above as it will only weaken their case. However, all is not lost for land owners in foreclosure actions. Under s 266(1), a chargor has the right to cancel or postpone the OFS by making payment before the conclusion of the sale. Thus, a chargor may still make full settlement or enter into a private treaty sale with 3rd parties & redeem the property before the hammer falls. For auction proceedings in land office, this “rescue” effort may not work if the chargor fails to file Form 16O within the prescribed time. Most land offices, if not all, are very strict on the requirements for filing the form. Under s 264A, a chargor must file the form at least 7 days before the auction, with the concurrence of the chargee & pay the fees imposed by the land office. Failure by the chargor to comply with these requirements may result in the Form 16O being rejected and thus, the auction will proceed despite the chargor and chargee having agreed to a settlement. The situation is more flexible for registry title cases as Notice of Discontinuance can be filed in court at the 11th hour by the Plaintiff to stop the auction. In conclusion, it is prudent for the chargor to comply with the terms under the facility & charge documents. Otherwise, the chargor may run the risk of losing their property unless they can fulfill the stringent test under s 256(3) NLC above. Best Regards, Faridah Ngatimin Senior Associate, AP 30.09.2024 #APMondayLaw #securedcreditors #bankinglitigation

In October 2023, a federal lawsuit raised concerns about real estate transactions, focusing on whether sellers were aware of commissions paid to buyer's brokers. A Missouri jury found the National Association of Realtors (NAR) and major real estate firms liable for $1.8 billion in damages, accusing them of artificially inflating brokerage commissions. Commissions, typically 5-6%, are split between seller's and buyer's agents, raising questions about potential conflicts of interest. NAR revised its commission rule, allowing listing brokers to offer $0 compensation to buyer's brokers, a move known as "decoupling." This change may impact future realtor commissions and buyer/seller expenses. The Department of Justice is investigating further amidst ongoing appeals and class-action lawsuits. These developments shed light on commission practices, prompting adjustments in the real estate market. Our experienced real estate team at Braun & Gresham, PLLC wants to help you navigate through the complexities of buying, selling, and owning real estate.  Link to our Blog post here: https://lnkd.in/gxmqy4E3

More on the much-discussed real estate commission: Concerns have been raised that these alterations may pose challenges and increased expenses for buyers, as we have already mentioned. While each real estate transaction varies, the customary process in Massachusetts typically involves the homeowner signing a contract with a real estate agent upon listing the property for sale. Within this agreement, the seller commits to paying the agent a specific percentage of the sale price upon closing. Although negotiable, this detail hasn't consistently been disclosed to the seller in the past. Learn more about the recent settlement here: https://lnkd.in/e6vZmPpc.

Article Review https://lnkd.in/gtzSBCVS CNN reports that the longstanding practice of charging a 6% commission on real estate transactions has been eliminated as part of a settlement agreement by the National Association of Realtors (NAR). This change comes after the NAR agreed to a $418 million settlement in antitrust lawsuits, which also includes the establishment of new rules aimed at enhancing competition and transparency in the real estate market. These changes are anticipated to significantly reduce the cost of buying and selling homes, potentially lowering real estate commissions by 25% to 50%, according to TD Cowen Insights. This settlement is expected to encourage the growth of alternative real estate selling models, such as flat-fee and discount brokerages. The news has impacted the stock market, with shares of real estate firms like Zillow and Compass dropping, while homebuilder stocks saw gains. The settlement, which still requires judicial approval, represents a significant shift in the housing market, potentially leading to a more competitive landscape where buyers and sellers can negotiate commission rates more freely. Kevin Sears, president of the NAR, emphasized the benefits of the settlement for the industry, despite the significant cost. The settlement follows a federal jury's finding in Missouri, which held the NAR and two brokerages liable for $1.8 billion in damages for conspiring to keep agent commissions high. The settlement also addresses long-standing criticisms of the NAR's practices, which some argued kept housing prices artificially high by imposing seller-paid commissions. This landmark agreement, crafted with input from attorneys like Benjamin D. Brown and Robert Braun, aims to bring about sweeping reforms to the real estate industry, challenging traditional commission structures and potentially leading to lower homebuying costs for millions of Americans.