The settlement of the Sitzer-Burnett lawsuit got a lot of traditional media coverage. It got much more hand-wringing on YouTube and in comment sections across the social media landscape. The required practice changes, which are widely misunderstood, are being implemented unevenly across the nation, including in Idaho. We will recap how this affects the owners of high-value properties as they consider a sale.
New Requirements
The settlement agreement of the Sitzer-Burnett lawsuit requires two things: First, it requires advance negotiation between a buyer and the real estate salesperson representing that buyer. How and how much the salesperson will be paid must be decided in advance by the buyer. A seller no longer determines a buyer representative's compensation. Second, no offer of compensation for a buyer's representative can be communicated through any MLS system.
What's Ahead?
The Sitzer-Burnett lawsuit was only one of a series. The plaintiffs were sellers, and the scope was limited. Multiple copycat suits are in process, including a handful in which the plaintiffs are buyers. These suits are progressing through court jurisdictions nationwide.
But the biggest wildcard is the Department of Justice. The National Association of Realtors is the largest trade or professional association in the U.S. It has drawn the attention of the DOJ several times. The DOJ focuses on anything that appears to be anticompetitive behavior. And this is the best way to understand "antitrust." The DOJ's announced objective is the "complete decoupling" of compensation for buyers' representatives from sellers' representatives.
How Idaho Luxe® Has Adapted
We've taken three steps:
- We no longer recommend that our clients (the selling owners of a high-value property) decide on offering compensation to buyers' agents in advance. This approach ensures our clients achieve the best possible compliance.
- Our simple recommendation to the owners of high-value properties is this: authorize us to communicate that you'll happily consider a request for a specific concession as a term in a valid, legal offer. Anything else is premature.
- We avoid any conflict of interest because we only represent as clients the selling owners of high-value properties. We can provide very limited services to potential buyers as customers under Idaho statute and rules. But our loyalty is never diluted. And we’re happy to unpack how that works to your advantage.
How Does This Affect You?
Frankly, it all works to your benefit. For the first time, any agreement to provide all or part of the buyer's representative compensation can be included as one term of a valid, legal offer to purchase. The offered purchase price and all concessions can be considered together by the selling owners and negotiated. This was theoretically possible before the Sitzer-Burnett settlement, but impractical. Now it is straightforward. Skillful negotiation is required, and we provide that skill set.
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