A powerful real estate trade group has agreed to do away with policies that for decades helped set agent commissions, moving to resolve lawsuits that claim the rules have forced people to pay artificially inflated costs to sell their homes.
Under the terms of the agreement announced Friday, the National Association of Realtors also agreed to pay $418 million to help compensate home sellers across the U.S.
Home sellers behind multiple lawsuits against the NAR and several major brokerages argued that the trade group’s rules governing homes listed for sale on its affiliated Multiple Listing Services unfairly propped up agent commissions. The rules also incentivized agents representing buyers to avoid showing their clients listings where the seller’s broker was offering a lower commission to the buyer’s agent, they argued.
As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer’s agent. The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms, though the home seller’s broker has to disclose any such compensation arrangements.
The trade group also agreed to require agents or others working with a homebuyer to enter into a written agreement with them. That is meant to ensure homebuyers know going in what their agent will charge them for their services.
The rule changes, which are set to go into effect in mid-July, represent a major change to the way real estate agents have operated going back to the 1990s, and could lead to homebuyers and sellers negotiating lower agent commissions.
Currently, agents working with a buyer and seller typically split a commission of around 5% to 6% that’s paid by the seller. This practice essentially became customary as home listings included built-in offers of “cooperative compensation” between agents on both sides of the transaction.
But the rule changes the NAR agreed to as part of the settlement could give home sellers and buyers more impetus to negotiate lower agent commissions.
“It may take some time for the changes to impact the marketplace, but our hope and expectation is that this will put a downward pressure on the cost of hiring a real estate broker,” said Robby Braun, an attorney in a federal lawsuit brought in 2019 in Chicago on behalf of millions of home sellers.
Analysts with Keefe, Bruyette & Woods also anticipate that the NAR rule changes will lead to lower agent commissions and could persuade some homebuyers to skip using an agent altogether.
“In our view, the combination of mandated buyer representation agreements and the prohibition of blanket compensation offers made by listing agents and sellers should result in significant price competition for buyer agent commissions,” the analysts wrote in a research note Friday.
While setting the stage for homebuyers to negotiate a more competitive price for their agent’s services, the rule changes mean home shoppers will have to factor in how to cover their agent’s compensation.
Homebuyers could still ask a prospective home seller for a concession that includes money to help cover the buyer’s agent compensation. However, a home seller with multiple offers, for example, could refuse such a request, or opt to go with a bid from a different buyer who isn’t asking for such a concession.
“The real solution is for the industry to work to remove regulatory barriers that make it difficult for buyers to include this compensation in their mortgages,” said Stephen Brobeck, senior fellow at the Consumer Federation of America.
The NAR faced multiple lawsuits over the way agent commissions are set. In late October, a federal jury in Missouri found that the NAR and several large real estate brokerages conspired to require that home sellers pay homebuyers’ agent commissions in violation of federal antitrust law.
The jury ordered the defendants to pay almost $1.8 billion in damages — and potentially more than $5 billion if the court ended up awarding the plaintiffs treble damages.
The settlement, if approved by the court, resolves that and similar suits faced by the NAR. It covers over one million of the NAR’s members, its affiliated Multiple Listing Services and all brokerages with a NAR member as a principal that had a residential transaction volume in 2022 of $2 billion or less.
“Ultimately, continuing to litigate would have hurt members and their small businesses,” Nykia Wright, NAR’s interim CEO, said in a statement. “While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances.”
The settlement does not include real estate agents affiliated with HomeServices of America and its related companies.
Last month, Keller Williams Realty, one of the nation’s largest real estate brokerages, agreed to pay $70 million and change some of of its agent guidelines to settle agent commission lawsuits.
Two other large real estate brokerages agreed to similar settlement terms last year. In their respective pacts, Anywhere Real Estate Inc. agreed to pay $83.5 million, while Re/Max agreed to pay $55 million.
A powerful real estate trade group has agreed to do away with policies that for decades helped set agent commissions, moving to resolve lawsuits that claim the rules have forced people to pay artificially inflated costs to sell their homes.
Under the terms of the agreement announced Friday, the National Association of Realtors also agreed to pay $418 million to help compensate home sellers across the U.S.
Home sellers behind multiple lawsuits against the NAR and several major brokerages argued that the trade group’s rules governing homes listed for sale on its affiliated Multiple Listing Services unfairly propped up agent commissions. The rules also incentivized agents representing buyers to avoid showing their clients listings where the seller’s broker was offering a lower commission to the buyer’s agent, they argued.
As part of the settlement, the NAR agreed to no longer require a broker advertising a home for sale on MLS to offer any upfront compensation to a buyer’s agent. The rule change leaves it open for individual home sellers to negotiate such offers with a buyer’s agent outside of the MLS platforms, though the home seller’s broker has to disclose any such compensation arrangements.
The trade group also agreed to require agents or others working with a homebuyer to enter into a written agreement with them. That is meant to ensure homebuyers know going in what their agent will charge them for their services.
The rule changes, which are set to go into effect in mid-July, represent a major change to the way real estate agents have operated going back to the 1990s, and could lead to homebuyers and sellers negotiating lower agent commissions.
Currently, agents working with a buyer and seller typically split a commission of around 5% to 6% that’s paid by the seller. This practice essentially became customary as home listings included built-in offers of “cooperative compensation” between agents on both sides of the transaction.
But the rule changes the NAR agreed to as part of the settlement could give home sellers and buyers more impetus to negotiate lower agent commissions.
“It may take some time for the changes to impact the marketplace, but our hope and expectation is that this will put a downward pressure on the cost of hiring a real estate broker,” said Robby Braun, an attorney in a federal lawsuit brought in 2019 in Chicago on behalf of millions of home sellers.
Analysts with Keefe, Bruyette & Woods also anticipate that the NAR rule changes will lead to lower agent commissions and could persuade some homebuyers to skip using an agent altogether.
“In our view, the combination of mandated buyer representation agreements and the prohibition of blanket compensation offers made by listing agents and sellers should result in significant price competition for buyer agent commissions,” the analysts wrote in a research note Friday.
While setting the stage for homebuyers to negotiate a more competitive price for their agent’s services, the rule changes mean home shoppers will have to factor in how to cover their agent’s compensation.
Homebuyers could still ask a prospective home seller for a concession that includes money to help cover the buyer’s agent compensation. However, a home seller with multiple offers, for example, could refuse such a request, or opt to go with a bid from a different buyer who isn’t asking for such a concession.
“The real solution is for the industry to work to remove regulatory barriers that make it difficult for buyers to include this compensation in their mortgages,” said Stephen Brobeck, senior fellow at the Consumer Federation of America.
The NAR faced multiple lawsuits over the way agent commissions are set. In late October, a federal jury in Missouri found that the NAR and several large real estate brokerages conspired to require that home sellers pay homebuyers’ agent commissions in violation of federal antitrust law.
The jury ordered the defendants to pay almost $1.8 billion in damages — and potentially more than $5 billion if the court ended up awarding the plaintiffs treble damages.
The settlement, if approved by the court, resolves that and similar suits faced by the NAR. It covers over one million of the NAR’s members, its affiliated Multiple Listing Services and all brokerages with a NAR member as a principal that had a residential transaction volume in 2022 of $2 billion or less.
“Ultimately, continuing to litigate would have hurt members and their small businesses,” Nykia Wright, NAR’s interim CEO, said in a statement. “While there could be no perfect outcome, this agreement is the best outcome we could achieve in the circumstances.”
The settlement does not include real estate agents affiliated with HomeServices of America and its related companies.
Last month, Keller Williams Realty, one of the nation’s largest real estate brokerages, agreed to pay $70 million and change some of of its agent guidelines to settle agent commission lawsuits.
Two other large real estate brokerages agreed to similar settlement terms last year. In their respective pacts, Anywhere Real Estate Inc. agreed to pay $83.5 million, while Re/Max agreed to pay $55 million.
NEW YORK — Donald Trump could be at risk of losing some of his prized properties if he can’t pay his staggering New York civil fraud penalty. With interest, he owes the state nearly $454 million — and the amount is going up $87,502 each day until he pays.
New York Attorney General Letitia James told ABC News on Tuesday that she will seek to seize some of the former president’s assets if he’s unable to cover the bill from Judge Arthur Engoron’s Feb. 16 ruling.
Engoron concluded that Trump lied for years about his wealth as he built the real estate empire that vaulted him to stardom and the White House. Trump denies wrongdoing and has vowed to appeal.
“If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets,” James, a Democrat, said in an interview with ABC reporter Aaron Katersky.
Trump’s ability to pay his mounting legal debts is increasingly murky after back-to-back courtroom losses. In January, a jury ordered him to pay $83.3 million for defaming writer E. Jean Carroll.
Trump claimed last year that he has about $400 million in cash — reserves that would get eaten up by his court penalties. The rest of his net worth, which he says is several billion dollars, is tied up in golf courses, skyscrapers and other properties, along with investments and other holdings.
But don’t expect James to try to grab the keys to Trump Tower or Mar-a-Lago immediately. Trump’s promised appeal is likely to halt collection of his penalty while the process plays out.
Here’s a look at where things stand in the wake of Trump’s costly verdict.
COULD THE STATE REALLY SEIZE TRUMP’S ASSETS?
Yes. If Trump isn’t able to pay, the state “could levy and sell his assets, lien his real property, and garnish anyone who owes him money,” Syracuse University Law Professor Gregory Germain said.
Seizing assets is a common legal tactic when a defendant can’t access enough cash to pay a civil penalty. In a famous example, O.J. Simpson’s Heisman Trophy was seized and sold at auction in 1999 to cover part of a $33.5 million wrongful death judgment against him.
Trump could avoid losing assets to seizure if he has enough cash — or is able to free up enough cash — to pay his penalty and mounting interest.
How much he has isn’t clear because most information about Trump’s finances comes from Trump himself via his government disclosures and the annual financial statements that Engoron has deemed fraudulent.
Trump reported having about $294 million in cash or cash equivalents on his most recent annual financial statement for the fiscal year ending June 30, 2021.
After that, according to state lawyers, he added about $186.8 million from selling the lease on his Washington hotel in May 2022 and the rights to manage a New York City golf course in June 2023. Part of Trump’s penalty requires that he give those proceeds to the state, plus interest.
Engoron’s decision last week spared Trump’s real estate empire from what the Republican front-runner deemed the “corporate death penalty,” reversing a prior ruling and opting to leave his company in business, albeit with severe restrictions including oversight from a court-appointed monitor.
James didn’t specify to ABC which of Trump’s assets the state might want to seize, though she noted that her office happens to be right across the street from a Trump-owned office building in Lower Manhattan that was the subject of some of the fraud allegations in her lawsuit.
“We are prepared to make sure that the judgment is paid to New Yorkers,” James told ABC. “And yes, I look at 40 Wall Street each and every day.”
HOW WILL AN APPEAL AFFECT TRUMP’S PENALTY?
With Trump promising to appeal, it’s unlikely he’ll have to pay the penalty — or face the prospect of having some of his assets seized — for a while. If he wins, he might not have to pay anything.
Under state law, Trump will receive an automatic stay if he puts up money, assets or an appeal bond covering the amount he owes. A stay is a legal mechanism halting enforcement of a court decision while the appeals process plays out.
“Even if we choose to appeal this – which we will – we have to post the bond, which is the full amount and some, and we will be prepared to do that,” Trump lawyer Alina Habba told Fox News on Monday.
Trump’s lawyers can also ask the appeals court to grant a stay without obtaining a bond or with a bond for a lower amount.
In his Georgia election interference criminal case, Trump paid $20,000 — or 10% — for a $200,000 release bond. After losing at a first trial involving Carroll last year, Trump put $5.55 million in escrow to cover the cost of the judgment while he appeals. He has said he would appeal the $83.3 million January verdict but has yet to do so.
“If he can’t post a bond or meet the appellate division’s bonding requirements, then I would expect him to file bankruptcy to take advantage of the automatic stay on collection,” Germain said. “But that’s a couple of chess moves away, so we will just have to see what happens.”
Trump’s vow to appeal all but assures the legal fight over his business practices will persist into the thick of the presidential primary season as he tries to clinch the Republican nomination in his quest to retake the White House.
The appeal is also likely to overlap with his criminal trial next month in his New York hush-money case, the first of his four criminal cases to go to trial.
Trump can’t appeal yet because the clerk’s office at Engoron’s courthouse must first file paperwork to make the verdict official. Once that happens, Trump will have 30 days to appeal and get the penalty stayed, or pay up. Trump’s lawyers wrangled Wednesday with state lawyers and the judge over what that paperwork should say. Trump lawyer Cliff Robert told Engoron in a letter late Wednesday that he wants enforcement of the penalty delayed 30 days “to allow for an orderly post-Judgment process, particularly given the magnitude of Judgment.”
DOES TRUMP REALLY OWE $87,502 A DAY IN INTEREST?
With each passing day, Trump owes an additional $87,502 in interest on his civil fraud penalty. By Thursday, that’ll be an extra $525,000 since the decision was issued on Feb. 16. The interest will continue to accrue even while he appeals. Barring court intervention or an earlier resolution, his bill will soar to a half-billion dollars by August 2025.
Trump’s underlying penalty is $355 million, the equivalent of what the judge said were “ill-gotten gains” from savings on lower loan interest and windfall profits from development deals he wouldn’t have been able to make if he’d been honest about his wealth.
Under state law, he is being charged interest on that amount at an annual rate of 9%.
As of Wednesday, Trump owed just over $99 million in interest, bringing his total to just under $454 million — that’s $453,981,779 to be exact, according to the Associated Press’ calculations. Trump’s interest will keep accruing until Trump pays. Trump owes the money individually and as the owner of corporate entities that were named as defendants in James’ lawsuit.
Engoron said the interest Trump owes on about half of the total penalty amount — pertaining to loan savings — can be calculated from the start of James’ investigation in March 2019. Interest on the remaining amount — which pertains to the sale of Trump’s Washington hotel and Bronx golf course rights — can be calculated starting in May 2022 or June 2023.
In all, Engoron ordered Trump and his co-defendants to pay $363.9 million in penalties, or about $464.3 million with interest. The total bill increases by $89,729 per day, according to AP’s calculations.
Trump’s sons, Eric and Donald Jr., must each pay about $4.7 million, including interest, to the state for their shares of the Washington hotel sales. Weisselberg was ordered to pay $1 million — for half of the $2 million severance he’s receiving — plus about $100,000 in interest.
Until they pay, Weisselberg is on the hook for another $247 per day, while Trump’s sons each owe an extra $990 per day, according to AP’s calculations.
___
Follow Sisak at x.com/mikesisak and send confidential tips by visiting https://www.ap.org/tips
NEW YORK (AP) — Donald Trump could be at risk of losing some of his prized properties if he can’t pay his staggering New York civil fraud penalty. With interest, he owes the state nearly $454 million — and the amount is going up $87,502 each day until he pays.
New York Attorney General Letitia James told ABC News on Tuesday that she will seek to seize some of the former president’s assets if he’s unable to cover the bill from Judge Arthur Engoron’s Feb. 16 ruling.
Engoron concluded that Trump lied for years about his wealth as he built the real estate empire that vaulted him to stardom and the White House. Trump denies wrongdoing and has vowed to appeal.
“If he does not have funds to pay off the judgment, then we will seek judgment enforcement mechanisms in court, and we will ask the judge to seize his assets,” James, a Democrat, said in an interview with ABC reporter Aaron Katersky.
Trump’s ability to pay his mounting legal debts is increasingly murky after back-to-back courtroom losses. In January, a jury ordered him to pay $83.3 million for defaming writer E. Jean Carroll.
Trump claimed last year that he has about $400 million in cash — reserves that would get eaten up by his court penalties. The rest of his net worth, which he says is several billion dollars, is tied up in golf courses, skyscrapers and other properties, along with investments and other holdings.
But don’t expect James to try to grab the keys to Trump Tower or Mar-a-Lago immediately. Trump’s promised appeal is likely to halt collection of his penalty while the process plays out.
Here’s a look at where things stand in the wake of Trump’s costly verdict.
COULD THE STATE REALLY SEIZE TRUMP’S ASSETS?
Yes. If Trump isn’t able to pay, the state “could levy and sell his assets, lien his real property, and garnish anyone who owes him money,” Syracuse University Law Professor Gregory Germain said.
Seizing assets is a common legal tactic when a defendant can’t access enough cash to pay a civil penalty. In a famous example, O.J. Simpson’s Heisman Trophy was seized and sold at auction in 1999 to cover part of a $33.5 million wrongful death judgment against him.
Trump could avoid losing assets to seizure if he has enough cash — or can free up enough cash — to pay his penalty and mounting interest.
How much he has isn’t clear because most information about Trump’s finances comes from Trump himself via his government disclosures and the annual financial statements that Engoron has deemed fraudulent.
Trump reported having about $294 million in cash or cash equivalents on his most recent annual financial statement for the fiscal year ending June 30, 2021.
After that, according to state lawyers, he added about $186.8 million from selling the lease on his Washington hotel in May 2022 and the rights to manage a New York City golf course in June 2023. Part of Trump’s penalty requires that he give those proceeds to the state, plus interest.
Engoron’s decision last week spared Trump’s real estate empire from what the Republican front-runner deemed the “corporate death penalty,” reversing a prior ruling and opting to leave his company in business, albeit with severe restrictions including oversight from a court-appointed monitor.
James didn’t specify to ABC which of Trump’s assets the state might want to seize, though she noted that her office is right across the street from a Trump-owned office building in Lower Manhattan that was the subject of some of the fraud allegations in her lawsuit.
“We are prepared to make sure that the judgment is paid to New Yorkers,” James told ABC. “And yes, I look at 40 Wall Street each and every day.”
HOW WILL AN APPEAL AFFECT TRUMP’S PENALTY?
With Trump promising to appeal, it’s unlikely he’ll have to pay the penalty — or face the prospect of having some of his assets seized — for a while. If he wins, he might not have to pay anything.
Under state law, Trump will receive an automatic stay if he puts up money, assets or an appeal bond covering the amount he owes. A stay is a legal mechanism halting enforcement of a court decision while the appeals process plays out.
“Even if we choose to appeal this – which we will – we have to post the bond, which is the full amount and some, and we will be prepared to do that,” Trump lawyer Alina Habba told Fox News on Monday.
Trump’s lawyers can also ask the appeals court to grant a stay without obtaining a bond or with a bond for a lower amount.
In his Georgia election interference criminal case, Trump paid $20,000 — or 10% — for a $200,000 release bond. After losing at a first trial involving Carroll last year, Trump put $5.55 million in escrow to cover the cost of the judgment while he appeals. He has said he would appeal the $83.3 million January verdict but has yet to do so.
“If he can’t post a bond or meet the appellate division’s bonding requirements, then I would expect him to file bankruptcy to take advantage of the automatic stay on collection,” Germain said. “But that’s a couple of chess moves away, so we will just have to see what happens.”
Trump’s vow to appeal all but assures the legal fight over his business practices will persist into the thick of the presidential primary season as he tries to clinch the Republican nomination in his quest to retake the White House.
The appeal is also likely to overlap with his criminal trial next month in his New York hush-money case, the first of his four criminal cases to go to trial.
Trump’s 30-day window to appeal won’t start until the clerk at Engoron’s courthouse files paperwork making the verdict official. Engoron sent the paperwork to the clerk’s office Thursday, but it has yet to be filed. The judge rejected a request from Trump’s lawyer Clifford Robert asking for the enforcement of the penalty to be delayed 30 days “given the magnitude” of the judgment. Engoron, replying to the lawyer by email, said: “You have failed to explain, much less justify, any basis for a stay. I am confident that the Appellate Division will protect your appellate rights.”
DOES TRUMP REALLY OWE $87,502 A DAY IN INTEREST?
With each passing day, Trump owes an additional $87,502 in interest on his civil fraud penalty. By Thursday, that’ll be an extra $525,000 since the decision was issued on Feb. 16. The interest will continue to accrue even while he appeals. Barring court intervention or an earlier resolution, his bill will soar to a half-billion dollars by August 2025.
Trump’s underlying penalty is $355 million, the equivalent of what the judge said were “ill-gotten gains” from savings on lower loan interest and windfall profits from development deals he wouldn’t have been able to make if he’d been honest about his wealth.
Under state law, he is being charged interest on that amount at an annual rate of 9%.
As of Wednesday, Trump owed just over $99 million in interest, bringing his total to just under $454 million — that’s $453,981,779 to be exact, according to the Associated Press’ calculations. Trump’s interest will keep accruing until Trump pays. Trump owes the money individually and as the owner of corporate entities that were named as defendants in James’ lawsuit.
Engoron said the interest Trump owes on about half of the total penalty amount — pertaining to loan savings — can be calculated from the start of James’ investigation in March 2019. Interest on the remaining amount — which pertains to the sale of Trump’s Washington hotel and Bronx golf course rights — can be calculated starting in May 2022 or June 2023.
In all, Engoron ordered Trump and his co-defendants to pay $363.9 million in penalties, or about $464.3 million with interest — the total bill increases by $89,729 per day, according to AP’s calculations.
Trump’s sons, Eric and Donald Jr., must each pay about $4.7 million, including interest, to the state for their shares of the Washington hotel sales. Weisselberg was ordered to pay $1 million — for half of the $2 million severance he’s receiving — plus about $100,000 in interest.
Until they pay, Weisselberg is on the hook for another $247 per day, while Trump’s sons each owe an extra $990 per day, according to AP’s calculations.
___
Follow Sisak at x.com/mikesisak and send confidential tips by visiting https://www.ap.org/tips
A Virginia bank that is seeking to recover more longstanding unpaid business loans to the family of West Virginia Gov. Jim Justice plans to to auction off land at a sporting club located at the governor’s posh resort
CHARLESTON, W.Va. — A Virginia bank that is seeking to recover more than $300 million in longstanding unpaid business loans to the family of West Virginia Gov. Jim Justice is planning to auction off land at a sporting club located at the governor’s posh resort.
Carter Bank & Trust of Martinsville, Virginia, took out a legal notice in the Charleston Gazette-Mail on Tuesday. The notice said that an auction involving the Greenbrier Sporting Club lots is scheduled for March 5 at the Greenbrier County Courthouse in Lewisburg.
The Greenbrier Sporting Club is a private equity club and residential community that opened in 2000. Justice bought The Greenbrier, which has hosted U.S. presidents and royalty, out of bankruptcy in 2009. The PGA Tour held a tournament at the resort from 2010 until 2019.
In a 2021 lawsuit that Justice and his companies filed against Carter Bank, the governor revealed that he is personally on the hook for $368 million in remaining loan debt to that bank. He also said that a close business relationship dramatically fell apart after the death of the bank’s founder, Worth Carter, in 2017. The 2021 lawsuit was later dismissed, but the Justice companies filed another lawsuit against the bank last November.
Justice, who owns dozens of companies, also has been the subject of numerous court claims that he has been late in paying millions of dollars he owes in fines, such as for unsafe working conditions at his coal mines.
Messages left with the governor’s office and with the Justice companies weren’t immediately returned Tuesday afternoon.
Justice, a Republican, is finishing his second term as governor this year and is running for the U.S. Senate seat currently held by Democrat Joe Manchin. Manchin has said he is not seeking reelection.
Last year dozens of properties owned by Justice in three counties were put up for auction as payment for delinquent real estate taxes.