Planet Money
The real estate industry on trial
Apr 3, 2024
Mike Ketchmark, a personal injury lawyer from Kansas City, discusses his unexpected journey into the realm of real estate law. He takes on an antitrust case that questions the legality of high real estate commissions, spurred by the Burnetts' experience of paying over $15,000 in fees. Ketchmark uncovers potential collusion among agents and the historical practices that have shaped the industry. The stakes rise in the courtroom as the jury prepares to deliver a landmark verdict that could reshape real estate transactions nationwide.
28:41
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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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