Odd Lots A Stunning Lawsuit Could Change How Realtors Get Paid
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Nov 29, 2023 
In this engaging discussion, Andra Ghent, a finance professor at the University of Utah and real estate expert, dives into the recent lawsuit shaking up the real estate industry. She explains how brokers have allegedly colluded to keep commission fees inflated and the implications of the $1.8 billion verdict. Ghent also highlights the persistent inefficiencies in the market, the need for more consumer-friendly payment models, and the potential for transformative changes in how real estate transactions are structured.
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Hidden Commission Costs
- Homebuyers often believe buyer agents' services are free.
- The commission is baked into the home price and split between seller and buyer agents.
Tech's Limited Impact on Costs
- Technological advancements haven't lowered consumer costs in real estate.
- The current affordability crisis and increased demand during COVID may explain increased scrutiny on the system.
Incentives and Overinvestment
- The current commission structure incentivizes buying agents to push higher-priced homes.
- This can lead buyers to overinvest in housing, neglecting portfolio diversification.