Ed Zorn, general counsel for CRMLS, and Jessica Edgerton, chief legal officer for the world’s leading real estate companies, warned agents against relying on outdated practices such as fee-sharing.
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Let’s borrow the words of a lawyer who is familiar with the real estate industry. No matter what you think about the National Association of Realtors’ national antitrust settlement and rule changes, next time you don’t want to become the target of further litigation.
Ed Zorn, General Counsel of CRMLS, and Jessica Edgerton, Chief Legal Officer of one of the world’s leading real estate companies, spoke Thursday at Inman Connect New York at a session called “The Next Legal Storm,” encouraging agents to The appeal was to avoid further litigation by relying on old practices such as: Share the commission.
“Let’s stop the lawsuits,” Zorn told attendees on the main stage at the New York Hilton Midtown in Manhattan. “The way we stop lawsuits is by doing the right thing.”
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“I’m tired of regulation and legislation and being cornered and sued here,” Edgerton added, noting that her legal opinions were hers alone. “Let’s not do that.”
Zorn advocated for eliminating commission sharing among brokers and advised agents and brokers against using standardized state forms that allow commission sharing.
“There’s no need to share fees,” Zorn said. “There is no need for the listing broker to make a compensation offer to the buyer’s broker. Just leave it alone.”
Panelists said fee-sharing raises concerns that buyers will be turned away from listings that offer lower-than-usual fees.
Edgerton says he continues to see inducements in the form of buyers asking their agents not to show them homes that don’t offer buyer agent compensation, and that the right thing to do in that situation is to ask buyers to: He said his goal was to show all properties that met the criteria. Meet the criteria regardless of the offer of indemnity and seek indemnification between buyer brokers in the offer to the seller.
“If we stop sharing commissions with each other, we lose control,” Zorn said. “If sharing commissions is unethical, we’re there. It works, and that’s it.”
Edgerton urged listing agents to “raise the bar of professionalism” and have “very careful, transparent, clear and frank conversations with sellers,” and told buyer agents to ensure that sellers receive compensation. He advised them to communicate that they are open to all offers that include covering concessions. Buyer’s agent fees, but by not disclosing the actual amount, you could be leaving money on the table and violating your fiduciary duty.
Zorn said another way agents and brokers can avoid future lawsuits is to require listing brokers to submit listings to real estate agent-related MLSs within one business day of publicly selling a listing. The goal is to maintain the National Association of Realtors’ clear cooperative policy that requires
He said that if a broker keeps access to certain listings away from the MLS, buyers could band together and sue under antitrust laws, and the lack of access to listings could impact business. Similarly, buyers’ agents who have been affected could potentially band together to sue under antitrust laws.
Edgerton said Zillow found that 75% of Latino/Hispanic and Black home sellers submit private listings rather than submit their properties to the MLS, compared to just 25% of white home sellers. It pointed out that it published a study showing that real estate agents are encouraging people to use their networks. .
“Here we have a problem,” she said.
“This is going to exacerbate the problem of already underserved communities, already underserved home sellers potentially leaving money behind. What does it mean for wealth?
“There’s also the issue of corporate redlining. What does that actually mean for community growth, or do we have a larger fair housing problem?”
Email Andrea V. Brambilla.
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