{"id":77011,"date":"2023-10-31T14:19:50","date_gmt":"2023-10-31T21:19:50","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=77011"},"modified":"2025-07-01T05:52:15","modified_gmt":"2025-07-01T12:52:15","slug":"sitzer-burnett-changes-industry","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/sitzer-burnett-changes-industry\/","title":{"rendered":"Change Comes to the Real Estate Industry"},"content":{"rendered":"

A jury today issued a verdict in the Sitzer-Burnett federal class-action lawsuit finding that the National Association of Realtors and major real estate franchisors conspired to inflate real estate commissions, by requiring home sellers to offer a commission to the agent representing a buyer, as a prerequisite to listing their property.<\/span><\/p>\n

Damages of $1.8 Billion<\/b><\/p>\n

The jury awarded damages of $1.8 billion to the plaintiffs, who are based in Missouri. There is a similar lawsuit representing plaintiffs in Illinois, seeking damages of $40 billion. The Department of Justice has also been closely watching these cases.<\/span><\/p>\n

Redfin Has Been on the Right Side of History<\/b><\/p>\n

The size of the verdict has already led, in just the past few hours, to at least one copycat lawsuit, with plaintiffs in other states, and with every major brokerage named as a defendant, including even Redfin. As a company that exists to give real estate consumers a better deal, Redfin is proud of our unwavering consumer advocacy. Redfin has saved our clients more than $1.5 billion in fees.<\/span><\/p>\n

A Tireless, Lonely Advocate for Lower Fees<\/b><\/p>\n

For many years, recently and in the distant past, we offered an online service for people to buy homes unrepresented. Prior to this verdict, <\/span>we announced<\/span><\/a> our resignation from the National Association of Realtors. For our entire history, at Congressional hearings, in press appearances, in sensationalized debates, and in public and private industry meetings, we\u2019ve campaigned tirelessly for lower fees, commission transparency, and broader consumer access to real estate listings. When I first used Redfin to list my own property, our yard sign was felled by a chainsaw, presumably in opposition to our stand on fees. Every day to this day, Redfin agents are denigrated by other agents as discounters.<\/span><\/p>\n

Even if the Judge Doesn\u2019t Require Structural Change, Structural Change Is Coming<\/b><\/p>\n

The judge may take days or weeks to decide what structural changes the jury\u2019s verdict will entail. There will also be years of appeals about the legal standard used in the case and other issues. For now, the initial size of the damages alone will ensure major change. In the weeks leading up to the verdict, the National Association of Realtors already updated its guidelines to let agents list homes for sale that don\u2019t offer a commission to the buyer\u2019s agent.<\/span><\/p>\n

Traditional Brokers Will Train Their Agents To Give Sellers All Their Options<\/b><\/p>\n

Traditional brokers will undoubtedly now train their agents to welcome conversations about fees, just as Redfin has been doing for years, especially when advising a seller on what fee to offer to buyers\u2019 agents. Rather than saying that a fee for the buyers\u2019 agent of 2% or 3% is customary or recommended, agents will say that a buyers\u2019 agent fee, if one is offered at all, is entirely up to the seller. This is as it should be.<\/span><\/p>\n

But A Bigger Change May Be Afoot: Buyers Pay the Buyer\u2019s Agent<\/b><\/p>\n

But it\u2019s also possible that buyers will become the ones who decide how much to pay a buyer\u2019s agent. Even without a judge\u2019s injunction, the local Multiple Listing Services that agents use to list homes may decide to stop supporting cooperation between buyers\u2019 and sellers\u2019 agents on fees.<\/span> In this event, many buyers will still hire a buyer\u2019s agent, but at a fee they negotiate, constrained in part by the buyer\u2019s heightened awareness of the fee, but also because the fee may not be a part of the home price, which has long been financed by a mortgage.\u00a0<\/span><\/p>\n

More Significant Change Is Possible<\/b><\/p>\n

More significant change is also possible. Industry observers who imagine that American real estate could easily become like Great Britain, New Zealand or Australia, with one agent representing both buyer and seller, haven\u2019t noticed what Redfin learned through painful experience in our earliest years: American consumers, long accustomed to the convenience of a buyer\u2019s agent who can show all the homes for sale, dislike calling different listing agents to see different properties.<\/span><\/p>\n

Buyers Should Be Able To Choose Whether to Hire an Agent at All<\/b><\/p>\n

But some may ask what will happen if this case, or if one of the cases that follow, ends cooperation, so that it becomes cost-prohibitive for many homebuyers to hire an agent at all. Redfin\u2019s position is that no one should hire a buyers\u2019 agent who doesn\u2019t want to; people should hire buyers\u2019 agents to see properties listed by a wide range of agents, to get guidance on how home-buying works, to understand the advantages and defects of the homes they\u2019re buying and the deals they\u2019re striking. Buyers can choose to work directly with a listing agent if they seek to avoid the fee paid to a buyers\u2019 agent, and if they understand the tradeoffs involved.\u00a0<\/span><\/p>\n

Redfin Is Prepared for Whatever the Future Brings<\/b><\/p>\n

It\u2019s hard to say whether the future will bring reformed cooperation, where the commission paid to the buyers\u2019 agent is optional, negotiable and open for all to see, or if cooperation ends entirely. Either way, Redfin will be ready. Since Redfin uses technology to operate more efficiently than just about any other major broker, with a national, low-cost home-touring service already in place, we\u2019ll be better prepared for this future than any other broker.<\/span><\/p>\n

If Buyers\u2019 Agents Mostly Go Away, Redfin Will Take Market Share<\/b>\u00a0<\/span><\/p>\n

But if buyers\u2019 agents become less common, Redfin will prosper in that world too. We run the largest brokerage website in America. We\u2019ve built self-service technology for buyers to set up their own tours and to make offers. We\u2019ll use that technology to market the properties listed by our agents directly to consumers, taking market share from other brokerages. We may open that platform to other listing agents who work with us as partners.<\/span><\/p>\n

Change Is Good<\/b><\/p>\n

Change, in whatever form it takes, can be painful for many industry incumbents, but it could be good for consumers, good for innovators, and good overall. I spent the first year or two of my now-18-year Redfin career proclaiming every other month that a revolution was at hand, only to discover how impervious to change our industry is. No matter what happens with the Missouri judge, or in any other courtroom, one thing is certain: there\u2019s no going back to the way things were. What Redfin wants in this uncertain world is what we\u2019ve always wanted: to give real estate consumers a better deal.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

A jury today issued a verdict in the Sitzer-Burnett federal class-action lawsuit finding that the National Association of Realtors and major real estate franchisors conspired to inflate real estate commissions, by requiring home sellers to offer a commission to the agent representing a buyer, as a prerequisite to listing their property. Damages of $1.8 Billion […]<\/p>\n","protected":false},"author":13210,"featured_media":76539,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[57],"tags":[14],"dashboard":[],"coauthors":[126],"class_list":["post-77011","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-news","tag-industry"],"acf":[],"yoast_head":"\nChange Comes to the Real Estate Industry - Redfin Real Estate News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.redfin.com\/news\/sitzer-burnett-changes-industry\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Change Comes to the Real Estate Industry\" \/>\n<meta property=\"og:description\" content=\"A jury today issued a verdict in the Sitzer-Burnett federal class-action lawsuit finding that the National Association of Realtors and major real estate franchisors conspired to inflate real estate commissions, by requiring home sellers to offer a commission to the agent representing a buyer, as a prerequisite to listing their property. 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