California
Realtors settlement brings confusion, relief to Southern California’s real estate industry
One thing is known for sure about a proposed settlement of a massive antitrust case against Realtors: the home selling process is about to change, and with it, how buyers and sellers compensate their agents.
Otherwise, say members of Southern California’s real estate industry, it’s too soon to decipher the impact of the $418 million deal unveiled on Friday, March 15.
Also see: Brokerage stocks tumble after Realtors agree to commission-cutting deal
Will buyers now start paying their agents directly?
Will buyers now have to sign a contract before their agent will show them any homes?
Will lenders allow buyers to roll the cost of paying agent commissions into a slightly larger mortgage?
And ultimately, will the settlement lead to to smaller commissions and lower home prices?
Also see: Homebuying’s 6% commission is gone after Realtors settle lawsuit
“There’s just a lot of moving pieces that have to be settled,” said Art Carter, chief executive of the Chino Hills-based California Regional Multiple Listing Service, which covers much of Southern California. “And I’m not going to say I have my arms around every one of those moving pieces.”
In a statement announcing the settlement, the National Association of Realtors said it agreed to a new rule banning sellers from offering compensation to buyers’ agents through a Realtor-affiliated MLS, or home-listing database.
But it was unclear if that will end the decades-old practice of requiring sellers to pay buyers’ agents.
While “offers of broker compensation could not be communicated via the MLS,” the NAR statement said, “they could continue to be an option,” so long as they’re communicated outside the MLS.
“The only certainty I can give you is the process will change,” Carter said.
The Realtor announcement followed an Oct. 31 jury verdict in Kansas City awarding nearly $1.8 billion to Missouri home sellers, finding the current agent compensation system perpetuates the 5-6% commission rate.
More than 20 similar lawsuits proliferated across the nation in the wake of the verdict, including at least three in California, naming more than 200 other industry groups in 11 states as defendants.
California Realtor groups hit with copycat commission rates lawsuit
Under the settlement announced Friday, NAR would pay $418 million over four years, instead of $1.8 billion. The settlement would cover more than a million NAR member agents, all state and local Realtor associations, Realtor-owned multiple listing services and NAR-affiliated brokerages generating less than $2 billion in sales. But large national real estate chains that were NAR’s co-defendants won’t be covered.
A law firm that took part in the settlement hailed the agreement as “groundbreaking,” saying it could save consumers billions of dollars in broker fees.
“This settlement changes (NAR) rules so that competition will occur at the commission level,” Steve Berman, a lead attorney in the case, said in a statement.
In Southern California, the announcement led to a combination of confusion, anxiety and relief.
Carter, the regional MLS CEO, tried to explain the settlement Friday to a meeting of brokers in Arcadia.
“I think there’s just a lot of confusion,” he said of the brokers’ reaction to the news. “They’re just curious to see what the new normal is going to look like.”
There was an element of relief at the Glendale Association of Realtors, one of 19 local Realtor associations named in a class-action lawsuit filed in January.
The settlement appears to be “a good start, a step in the right direction,” said David Kissinger, Glendale Realtors association chief executive.
“We are in defendant in one of the cases,” Kissinger said. “And as a defendant in a case, … that’s concerning. There is substantial risk to us. We were certain in the belief that the case did not have merit. But, you know, the court and the jury are going to do what they’re going to do.”
Carter echoed that sentiment.
“We support NAR for taking the steps” toward settling the cases. “If it would have been litigated further, it could have been quite detrimental to the the industry.”
The proposed effective date will be July 1 if the settlement gets court approval, although that — like everything else — is subject to change, Carter said.
If approved, the settlement could lead to the widespread use of buyer-broker agreements, he said. Currently only about a fifth of buyers sign representation agreements with their agents.
It’s possible sellers could list an amount for concessions in their MLS listings, instead of compensation offers, and buyers could use those concessions as they choose — perhaps paying for repairs, for closing costs or to compensate their agents, Carter said.
“The (agent’s) job is going to change significantly,” said Newport Beach broker Bill Cote, owner of Cote Realty Group. “I think you’re going to see a whole element of people come out and say that they are buyers brokers, and they’re only representing buyers. But the difficulty with that is getting the buyers to step to the plate to say that they’re going to pay the compensation to the buyer’s broker.”
Cote noted that in high-priced communities, from Newport and Laguna Beach to Silicon Valley, the buyer’s share of commissions “has always been very large.”
Ed Coulson, director of the Center for Real Estate at UC Irvine, predicted the settlement could have a major impact on agent earnings and commission rates.
People accepted 5-6% commission rates as if it were a rule, which it’s not, he said.
“One of the things that’s going to happen is people will recognize it’s not a rule, and that’s going to bring commission rates down,” he said. “I think the thing that is most important is we don’t know the impact on prices. There’s been a lot of speculation it would lower house prices, but that depends on the seller folding the commission into the house price. And I’m very uncertain that we know the extent to which that happens.”
California
Three migrants fall from border wall in California: Report
Three migrants reportedly fell off the U.S.-Mexico border wall after scaling it in Southern California and were taken to a hospital with non-life-threatening injuries, according to a CBS affiliate.
Newsweek contacted U.S. Customs and Border Protection for comment.
Why It Matters
Unlawful crossings at the U.S.-Mexico border have dropped to their lowest level in more than half a century, according to data released on October 7 from the Department of Homeland Security (DHS).
The three—two women and a man—were detained in the Otay Mesa neighborhood in San Diego County after San Diego Fire-Rescue Department personnel were called out, CBS8 reported.
The apparent fall comes as plans are underway to improve the border wall in the area to boost security.
What To Know
The migrants were conscious and breathing when they were taken to hospital just after midday Friday. Details of their condition were not released, per CBS8, citing comment from San Diego Fire-Rescue Department spokeswoman Candace Hadley.
The wall in the area, which is opposite the Mexican city of Tijuana, is 30 feet high. A Border Patrol agent in the San Diego Sector said the three had apparently fallen off the wall after scaling it from the Mexican side.
“Border Patrol agents from San Diego Sector encountered three individuals who appeared to have fallen from the border barrier west of the Otay Mesa Port of Entry after illegally entering the country,” Border Patrol Agent Eugene Wesley said in a statement.
The DHS and U.S. Customs and Border Protection recently awarded $4.5 billion in new contracts funded by President Donald Trump’s One Big Beautiful Bill Act to expand wall construction along the Southwest.
The projects will add roughly 230 miles of new “Smart Wall” barriers and nearly 400 miles of integrated surveillance and detection systems, which include lighting, cameras and sensors.
The plans also include nearly 10 miles of new border wall in two high-traffic areas of San Diego County, including near Otay Mesa, CBS8 reported in September.
Environmentalists say the wall breaks up critical wildlife habits and blocks the migration of species like bighorn sheep and mountain lions along the California-Mexico border.
What People Are Saying
DHS chief Kristi Noem, in an October statement: “We have had the most secure border in American history and our end-of-year numbers prove it. We have shattered multiple records this year and once again we have broken a new record with the lowest number of Southwest border apprehensions in 55 years. Under President Trump, we have empowered and supported our law enforcement to do their job and they have delivered.”
Laiken Jordahl, Southwest conservation advocate with the Center for Biological Diversity, to CBS8 in September: “These wildlife have evolved for millennia to migrate freely across the border in search of food and water. Now we’re building this solid wall that will effectively wall off the entire state of California.”
California
EV sticker shock: Solo drivers using California carpool lanes face hefty fines
Solo EV drivers using California carpool lanes will face ticketing beginning Monday as the perk disappears.
Though the benefit technically ended for solo drivers a few months ago, the Department of Motor Vehicles offered a 60-day grace period that ended Monday. Now, solo drivers face fines of up to $490.
With this, most carpool lanes require vehicles with more than two people.
Here is what to know:
How many people are affected?
As of Aug. 14, more than half a million motorists statewide had an active decal on their vehicle to access carpool lanes. California has an estimated 1,171 carpool lane-miles, with 803 miles in Southern California and 366 miles in Northern California, according to a UC Berkeley study.
With more than 35 million total registered vehicles in California, that means 1% to 2% of the vehicle fleet will lose access to the carpool lane, said Antonio Bento, professor of public policy and economics at USC.
What’s the background?
Federal legislation has allowed the U.S. Environmental Protection Agency to grant solo drivers in low-emission and energy-efficient cars to use the carpool, or High Occupancy Vehicle (HOV), lane.
The goal was to promote the adoption of alternative-fuel vehicles and assist in meeting environmental goals that included reducing fuel consumption and pollution caused by congested freeways, according to the U.S. Department of Energy.
Over time, states developed incentive programs, choosing which car models to give carpool access to.
California is one of 13 states that offered this type of incentive program to its residents. Qualified drivers in the Golden State include those who drive fuel cell electric, natural gas or plug-in electric cars.
Why is the perk ending?
In 2015, Congress authorized California’s program through a highway funding bill, but that authorization expired Sept. 30.
In an effort to extend the decal program, state Assemblymember Greg Wallis (R-Bermuda Dunes) wrote Assembly Bill 2678, which would push the end date to Jan. 1, 2027.
The bill was signed into law by Gov. Gavin Newsom last year.
But the change never got the required federal approval so the extension was moot.
California
Police vow to ‘hunt down animals’ behind mass shooting at children’s birthday party in California
Police have vowed to “hunt down” the “animals” behind a mass shooting at a children’s birthday party in California.
Three children and a 21-year-old died in Saturday’s shooting at a banquet hall, with 11 more injured.
“We all know that there are people out there [who] are violent and commit violent crimes,” said Patrick Withrow, sheriff of San Joaquin County.
“But these animals walked in and shot children at a children’s birthday party.”
Officers were called to the banquet hall in Stockton just before 6pm local time (2am UK time).
Around 100-150 people had gathered to celebrate a child’s birthday.
The sheriff told reporters he had been at a Thanksgiving celebration in Oregon during the incident but “put down my grandbabies to come hunt down these animals who took somebody else’s babies away from them”.
He appealed for the public to send in “any little bit” of information that could lead to the arrest of the gunmen.
“If you know anything about this, you have to come forward and tell us what you know.”
There is currently nobody in custody over the incident.
Although the investigation is still under way, Sheriff Withrow said there appeared to have been “multiple shooters” who began the attack indoors and then moved outside.
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The shooting was “not a random act”, he said. “They walked into this area and were probably looking for somebody in particular.”
He confirmed that guns had been found on the roof of a nearby building but it was too early to say whether they were “related to this crime”.
Police have also towed multiple cars in the area, some damaged with bullet holes, in case they can be used as evidence.
“Please continue to give us more information,” he said, “and we will follow every single lead.”
A vigil was held for the victims on Sunday, according to local media, with the entire local council in attendance.
On Saturday, Stockton mayor Christina Fugazi said that “families should be together instead of at the hospital, standing next to their loved one, praying that they survive”.
California governor Gavin Newsom’s office added that he had been briefed on the “horrific shooting”.
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