Money Rehab with Nicole Lapin - You Could Save Thousands By Waiting To Put Your House on the Market - Here's Why

Episode Date: April 3, 2024

If you want to sell your house but haven’t listed it yet, you might want to wait until mid-July because it could mean keeping thousands of dollars in your pocket. And if you did just sell your house— you might be entitled to get some of your money back. It all comes down to a recent lawsuit. Nicole explains the headline, and how you can benefit from it. Check your eligibility for the settlement here: https://www.realestatecommissionlitigation.com/ If you're ready to find your dream team, use LinkedIn Jobs. Post a job for free at: linkedin.com/mnn Want to level up your money moves? Check out Facet. Facet is the next generation of personalized financial planning that is making professional financial advice accessible to the masses, not just the rich. Facet will help you understand and expand your financial opportunities by providing you with a team of financial planners (with the CFP® certification you want) and a team of professionals across all the major food groups of your financial wellness: retirement planning, tax strategy, estate planning and more. To claim Facet’s offer for Money Rehabbers, go to: https://facet.com/moneyrehab 

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your

reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly. I guess that's the best way to put it. But I'm matching with a co-host so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. Anyone who's interested in real estate, whether wannabe homebuyers, wannabe home sellers,

real estate investors, we need to talk about a huge story in the real estate world that is shaking things up on all sides of the industry. But it's especially important for wannabe sellers. And before I dive in, I just want to say right here, right now, if you want to sell your house, but you haven't listed it yet, you might want to wait until mid-July to do so because it could mean keeping thousands of dollars in your pocket. And if you did just sell your house, you might be entitled to get some of that money back too. This is all because of a series of lawsuits that were filed by home sellers against the National Association of Realtors, which is all coming to a head in a $418 million settlement. The lawsuit alleges that the National Association of Realtors' practices were incentivizing the real estate agents representing buyers and the agents representing sellers to prioritize listings with higher commission fees. As we know, typically when a house sells,

there's a 6% commission fee that's split between the seller's agent and the buyer's agent, and that is entirely paid for by the seller. Now, the lawsuit alleges that there was collusion happening between agents through databases owned and operated by NAR's local affiliates called the MLS or Multiple Listing Service. In these databases, buyer's agents could see listings and importantly, what sort of commissions they would make on each of those listings. So picture this. A buyer's agent is looking for a few listings to bring their client and they see a $450,000 house listed that would earn them a 2% commission. So that would be $9,000. Amazing. And then they see another $450,000 house

that would earn them a 3% commission. That's $13,500 in their pocket or a $4,500 bonus compared to the house with the same sticker price, but only a 2% commission. Can you see a world in which that agent would prioritize showing their client the listing in which they make a higher commission? Well, seller's agents might be thinking the very same thing. Of course, real estate agents representing the sellers want their properties they're representing to get sold, right? That's how they make their money. So this means that there was an incentive for the seller's agent to keep commissions high to better the chances that buyer's agents would push for that listing. Can you picture how this is playing out? Yeah, that's what these lawsuits were alleging. Sellers have been feeling for years

that these incentives have caused agents on both sides of these transactions to keep commissions high. But after this settlement, sellers will no longer be on the hook for the commission for the buyer's agent. This is huge because like I said earlier, typically the seller pays the commission for their agent and the buyer's agent. Because of this change, sellers will now have really good negotiating leverage for cutting the commission on their home sale in half. So let's go back to the $450,000 house, for example. If you listed it now pre-settlement, you'd still be expected to shell out 6% or a $27,000 commission. Again, that commission is negotiable, but 6% is definitely standard. But if you wait until these lawsuits are settled, which is projected

to be mid-July of this year, you could lock in something like a 3% commission fee, which would save you more than $13,000. Of course, there are other factors you should take into consideration when deciding to sell your house. Like, normally, the spring is a great time to sell. Plus, we're not sure how exactly the settlement is going to affect home prices, but it is certainly worth talking to your financial advisor about. Similar to the Silicon Valley bank crash over a year ago, you remember that that was the first bank to collapse in 2023 that infected the financial services industry pretty heavily in the months that followed. This lawsuit has the potential to infect other businesses in real estate beyond just the NAR. One company that is already feeling the pain is Berkshire Hathaway Energy, the unit of Warren

Buffett's Berkshire Hathaway that controls Home Services of America. It's unclear as of right now what the fallout will be for Berkshire Hathaway Energy specifically, but the lawsuit claims that the company defrauded home sellers working with representatives of Berkshire Hathaway by $4.2 billion in 2023 alone. But at the end of the day, this is great news for sellers and a transition that will definitely save Americans billions of dollars. Yes, billions with a B. Americans paid roughly $100 billion in real estate commissions every single year. So if that's cut in half, that is billions of dollars of spending power back in sellers' pockets. So this is awesome news for sellers, but not necessarily great for buyers. If you're looking

to buy a house this summer, watch out because this settlement could mean that your agent is now going to expect their commission to come from you, which of course would need to impact how you're budgeting for your home. I'm sorry, my sweet, sweet homebuyers. I hope you can catch a break soon. For today's tip, you can take straight to the bank. If you sold your house between March 2015 and December 2020, you might be entitled to get some money back from the settlement. In order to see if you're eligible, check out realestatecommissionlitigation.com or click the link in the show notes. I know this sounds like some weird late night infomercial domain, but it is indeed the website. The $418 million settlement is pretty massive. So if you sold your house in recent years,

you should definitely see if some of that lump sum has your name on it. One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a time checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees.

If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply.

Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. I love hosting on Airbnb. It's a great way to bring in some extra cash, but I totally get it that it might sound overwhelming to start or even too complicated if, say, you want to put your summer home in Maine on Airbnb, but you live full time in San

Francisco and you can't go to Maine every time you need to change sheets for your guests or something like that. If thoughts like these have been holding you back, I have great news for you. Airbnb has launched a co-host network, which is a network of high quality local co-hosts with Airbnb experience that can take care of your home and your guests. Co-hosts can do what you don't have time for, like managing your reservations, messaging your guests, giving support at the property, or even create your listing for you. I always want to line up a reservation for my house when I'm traveling for work, but sometimes I just don't get around to it because getting ready to travel always feels like a scramble, so I don't end up making time to make my house look guest-friendly.

I guess that's the best way to put it. But I'm matching with a co-host, so I can still make that extra cash while also making it easy on myself. Find a co-host at Airbnb.com slash host. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even

have a one-on-one intervention with me and follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make. Thank you.