KANSAS CITY, Mo. — Day 9 of the Sitzer/Barnett Commission litigation began with overnight news from the courthouse.
Wednesday morning after filing a motion for a miscarriage of justice citing several complaints, including “indecent” footage from an incident. tom ferry podcast Featuring Alan Dalton, Department of Justice investigation of National Association of Realtors (NAR), Defendant Home American Services I realized that things didn’t go as planned.
Judge Stephen Baugh rejected the motion, saying he found a miscarriage of justice was “too drastic a remedy in the present circumstances.”
“Instructs jurors to ignore all references to the Inman article, instructs jurors to ignore references to salaries of NAR executives and others, and instructs jurors to ignore recent media reports. “By administering a questionnaire to ensure that no jurors had read or seen it, the court substantially eliminated any bias, if any,” Baugh wrote in the ruling. “Further, the court found that defendants failed to timely object to video exhibits that were properly used for impeachment purposes.”
HomeServices was not the only defendant in the commission case to receive bad news. keller williams A motion for judgment as a matter of law filed early Wednesday was denied. HomeServices’ motion for judgment as a matter of law was also denied.
Home Services continues defense testimony
As the case begins Thursday, former Commissioner Dave Stevens federal housing administration (FHA) was the first to take the stand at the request of HomeServices.
Mr. Stevens’ testimony focused on how changes to the current board structure will affect homebuyers. He testified that in most cases, homebuyers cannot include buyer agent commission costs in their financing.
“What I’m concerned about are buyers who don’t have a lot of money,” Stevens said.
Stevens said the home-buying process can be “challenging” and “intimidating,” and that “not having an agent gives all the advantages to the other side of the transaction.”
But buyers aren’t the only ones benefiting from the current system, Stevens said.
He told the jury that sellers also benefit from increased foot traffic and attention to their listings.
In cross-examination, lead plaintiffs’ attorney Michael Ketchmark argued that the Internet has made buying a home easier than ever. Mr. Stevens disagreed, saying that in some markets it’s harder than ever to buy a home.
Mr. Ketchmark then noted that fees had increased six times over the past 30 years and asked if it was now six times more difficult than in 1992, when he bought his first home.
Stevens said the current very low housing inventory is making it more difficult in some markets.
Mr. Ketchmark then asked Mr. Stevens about the issue of housing affordability and believed that rising fee costs were the reason for the affordability issue.
Mr. Stevens disputed this, saying that housing costs are not determined by fees, but by other factors such as buyer demand and inventory shortages. He also pointed out that rising home prices are a major wealth driver for homeowners.
Investigated danger report
Stefan Swanepoel, author of the infamous NAR Hazard reportThe next person who stood on the stand was…
In his testimony, Mr Swanepoel talked about how the report was created, bringing together voices from 72 industries. He said the report was neutral and did not reflect his personal opinions. Despite the variety of opinions on the report, he does not feel it is very thorough.
Mr Swanepoel said he worked with a team of researchers and consulted an international panel to compile the report. He noted that some of the 72 people he spoke to were concerned about declining fees in other countries.
Swanepoel also testified that part of the analysis was conducted by Craig Schulman, an associate professor of economics at the university. Texas A&M University,I was wrong.
Mr. Shulman testified last Friday after being called as a witness by the plaintiffs. Mr Swanepoel said in his evidence that Mr Schulman compared the US to countries such as Australia and the UK, which have very different real estate systems.
no evidence of conspiracy
Like Swanepoel and Lawrence Wu. National Economic Research Associationalso viewed Shulman’s testimony as problematic.
On Friday, Schulman said there is no reason for home sellers to pay buyer agents, arguing they don’t provide much value. He also said that if clear cooperation rules are not put in place, the number of buyer brokers will decline.
“My conclusion is completely different,” Wu said, arguing that Schulman’s analysis lacks the practice and function of rules.
According to Wu, home sellers who want to sell their home quickly and at the highest price can do so by rewarding listing agents who are motivated to help their clients through the home-buying process. We are achieving that.
Mr Wu said clear cooperation rules would “facilitate the process” for home sellers by bringing in more property exposure, more bids and more funds.
Mr. Wu then moved on to Mr. Shulman’s conclusion that there must be a conspiracy because buyer agency fees are about the same across the country. Wu pointed out that clusters do not imply a conspiracy and there is no evidence that companies are coordinating to reduce competition.
Companies make their own decisions about fees to be more competitive, and in some cases may decide to do the same, Wu said. He cited examples of restaurants deciding to copy popular dishes from nearby restaurant menus, and fast food prices that are similar regardless of chain. He also pointed out that there is no evidence that individual agents colluded.
Mr Wu also referred to Mr Schulman’s comparison of the US committee structure with Australia, reaching similar conclusions as Mr Swanepoel. Buyers typically do not use a buyer’s broker because Australia does not have a policy of clear cooperation rules. In such event, Buyer pays the Service Fee at its own expense.
Shulman used this comparison to illustrate what the U.S. system would be like without this rule. Again, Wu said he had come to a completely different conclusion.
In the US market, where there are no clear cooperation rules, Northwest MLS And that New York State Real Estate BoardWu said listing agents still make offers of compensation about 99% of the time. He also pointed out that the number of buyer brokers remains strong and homebuyers are not paying for their services.
“Even if we eliminate this rule, the practice of cooperative compensation will remain,” Wu said. “Practice will continue.”
Mr. Wu echoed Mr. Stevens’ testimony earlier in the day, saying co-op coverage increases sellers’ demand for housing and helps cash-strapped buyers. He also pointed out that buyers’ agents provide a valuable service to buyers and sellers.
“We do this practice because it benefits sellers and buyers,” he said.
He concluded that this rule is important because it is about transparency and clarity, and buyer brokers know that they will be rewarded for success without making too many phone calls. Ta.
On the other hand, Schulman believes buyer agents can entice customers by posting compensation offers in their listings. Wu insists there is no evidence of manipulation.
In his analysis, which looked at all compensation offers made in Missouri MLS from April 2014 to December 2020, Wu found that commission offers are negotiated 22% to 33% of the time, and commission offers are negotiated 22% to 33% of the time. found that 46% of respondents were less than 3%. The sales price of a home.
He also looked at eight Missouri cities and found that average compensation offers ranged from 2.68% in St. Louis to 3.01% in West Plains.
During cross-examination, Ketchmark claimed that Wu’s testimony was paid for by the defense, collaborated with defense attorneys on PowerPoint, and used bad data provided by the defense. Ketchmark has since been corrected about these claims, which defense attorneys said are false.
Closing arguments in the commission case trial are expected to occur as early as Monday, although Keller Williams still has to make a defense argument.
Editor’s note: Continue checking HousingWire.com for our editorial team’s continued live coverage of the Commission Cases Trial from Kansas City.
