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Planet Money

The real estate industry on trial

Apr 3, 2024
28:41
Snipd AI
Lawyers Brandon Boulware and Mike Ketchmark challenge the real estate industry over high commissions and dual representation. They uncover suspicious practices, leading to a legal battle against major realtor franchises. The case may revolutionize how homes are bought and sold in the US by addressing fixed commission rates and collusion.
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Podcast summary created with Snipd AI

Quick takeaways

  • The legal case exposed collusion in fixed real estate commissions, leading to a $5.4 billion antitrust verdict.
  • The verdict pushed for transparency in commission practices, reshaping the real estate industry towards consumer empowerment.

Deep dives

Illegal Commissions in Real Estate

Real estate agents in the US typically earn a commission when a house is sold, which can be high and fixed, leading to concerns about anti-competitive practices. A personal injury lawyer, Mike Ketchmark, took on a legal case representing homeowners over high commissions, exposing potential collusion between seller's and buyer's agents. Through evidence and expert testimonies, the case revealed a system-wide practice of fixed commissions, resulting in a successful $1.8 billion verdict against major realtor franchises and the National Association of Realtors.

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