CLASS-ACTION SHAKE REAL ESTATE INDUSTRY

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Recent legal battles in Arizona and New York have exposed allegations of antitrust violations in the real estate industry, challenging the practice of inflating broker commissions. Simultaneously, a survey by Clever Real Estate sheds light on the remarkable sacrifices millennials are willing to make in their pursuit of homeownership.
 

Antitrust Lawsuits

Homesellers in Brooklyn, New York, led by Robert Friedman, and Joseph Masiello in Arizona have filed class-action lawsuits accusing real estate companies of conspiring to inflate broker commissions. The suits challenge rules requiring listing brokers to share commissions with buyer brokers, claiming these practices lead to artificially inflated prices for real estate services.

The legal action follows the landmark Sitzer | Burnett case verdict, where a Kansas City jury found the National Association of Realtors and major real estate franchisors guilty of conspiring to inflate commissions, potentially resulting in damages exceeding $5.4 billion.

Both Friedman and Masiello allege violations of the federal Sherman Antitrust Act and state antitrust laws, targeting trade group rules mandating compensation to buyer brokers for listing submissions.
 

Millennials' Housing Dilemmas

Clever Real Estate's survey highlights the willingness of millennials to make significant sacrifices to attain homeownership. With millennials comprising the largest pool of potential homebuyers, the survey reveals their readiness to accept higher interest rates, purchase fixer-uppers, and work multiple jobs to achieve this dream.

A staggering 78 percent of millennial homebuyers would consider accepting interest rates higher than the national average, with 65 percent open to rates of 10 percent or more. The survey showcases their determination, with 80 percent willing to pay above asking price, 85 percent considering sight-unseen purchases, and more than 60 percent open to buying homes with potential issues like asbestos, mold, or termite problems.
 

Despite their eagerness, financial realities pose challenges, with 25 percent of millennials having less than $10,000 in savings. To overcome this, millennials are adopting strategies like cutting back on spending, taking on extra jobs, moving in with family, tapping into retirement funds, or receiving financial assistance from family and friends.

 

Regrets Among Millennial Homeowners

Surprisingly, among the 33 percent of millennials who own homes, 90 percent express regrets about their purchase. Common concerns include choosing a bad location (30 percent), dealing with unpleasant neighbors (26 percent), facing unfavorable interest rates (25 percent), managing expensive mortgages (22 percent), and outgrowing homes faster than expected (20 percent).

As legal battles unfold in the real estate industry, and millennials grapple with substantial sacrifices in their quest for homeownership, the landscape of the housing market continues to evolve. The intersection of legal scrutiny and generational aspirations raises essential questions about the future of real estate practices and the challenges faced by aspiring homeowners.