The story behind the Sitzer/Burnett case, squatters getting the boot in Florida and an iconic hotel’s demise. From the wild and wooly world of real estate, here are the Hits and Misses for the week of March 25-29.
Miss: Placing Blame Elsewhere. Rhonda Burnett, a Kansas City home seller who was one of the plaintiffs in the landmark Sitzer/Burnett case, told the New York Times this week that her lawsuit came about because her real estate agent refused to negotiate on the commission that was going to be divided with the buyer’s agent. But rather than find another agent or sue the agent directly, she instead took aim with the trade association representing the agent. “It’s not the realtors,” she declared about who was to blame. “But the realtors are controlled by a huge spider web. After I joined the lawsuit, I learned so much about how the industry is run. It goes all the way to the brokerages and up to NAR.” Huh? If such illogical reasoning was the root of the lawsuit, perhaps NAR was too hasty in rushing into its settlement rather than fight this on appeal?
Miss: Not Reporting the Whole Story. The Times’ article featuring Burnett also included an interview with Michael Ketchmark, the plaintiffs’ lead attorney. Debra Kamin, the article’s author, fixated on the money that realtors receive as a commission for their work, but strangely she offered no information on Ketchmark’s fees in this case. After all, there is nothing in the Times article to suggest this was a pro bono case. Kamin sought to portray Ketchmark as an Atticus Finch-type of downhome lawyer, someone “with parents who didn’t make a lot of money and who saw a house as their biggest investment.” What she failed to mention was that he is one of Missouri’s most financially successful and politically connected attorneys, who was cited by The Real Deal as “a major donor to both Republicans and Democrats in Missouri, giving their campaigns more than $1 million over the past decade.” Perhaps in her next Times article Kamin can let us know how much of NAR’s $418 million settlement is going into Ketchmark’s pocket?
Hit: Kicking Out Squatters. Perhaps the most satisfying real estate news this week came from Florida, where Gov. Ron DeSantis signed a bill to enable the immediate eviction of squatters by law enforcement. This comes in stark contrast to other states where squatters are afforded tenants’ rights and homeowners with these dreadful trespassers in their properties need to go through lengthy and expensive legal channels to get them evicted. “The squatter scam ends today with my signature on this piece of legislation and the state of Florida will be better for it,” DeSantis said during the bill signing ceremony. Now, let’s get the other 49 states and the District of Columbia to follow Florida’s lead and stop treating squatters like law-abiding citizens and start them like criminals.
Hit and Miss: Winning Votes in Chicago. If Ketchmark got the best of NAR in court, the trade group had its own victory when Chicago voters rejected a ballot referendum that would have changed the city’s real estate transfer tax structure. NAR trumpeted its “massive effort” to fight the so-called “mansion tax” by sharing how it channeled $850,000 in grants to persuade voters to defeat the so-called “mansion tax.” NAR Chief Advocacy Officer Shannon McGahn boasted, “This outcome demonstrates how crucial it is to communicate directly with consumers about the real-life impacts of proposed policies.” The good news is that Chicago voters did the right thing in rejecting the referendum, and NAR should be credited in that effort. But the bad news is that NAR, to paraphrase Strother Martin’s “Cool Hand Luke” line, was a failure to communicate during the Sitzer/Burnett trial, which is the victory that it should have snagged.
Miss: Demolishing a Las Vegas Landmark. Another iconic feature of Las Vegas history will soon disappear beneath the thudding whack of the wrecking ball. The Las Vegas Review-Journal reported the Tropicana Hotel is scheduled for demolition this October. The hotel will be closed to the public on April 2, shortly before its 67th birthday. The hotel had a colorful history with A-list entertainers on its stages and different owners who tried to reinvent the property to fit their concept of a Las Vegas resort. It was featured in the 1971 film “Diamonds Are Forever” with Sean Connery’s 007 taking a guest suite because he heard it was “quite comfortable.” Replacing the hotel will be the new 33,000-seat baseball stadium for the relocating Oakland A’s, which will certainly a far less interesting addition to the city’s cultural heritage.
Miss: A Big Ouch. The most financially painful news this week for many prospective homebuyers came in a Redfin data report that found the median down payment in February was $55,640, a 24.1% upswing from $44,850 one year earlier. This represented the largest annual percentage increase since April 2022. The typical homebuyer’s down payment last month was equal to 15% of the purchase price, up from 10% in February 2023. Redfin attributed the increase to home prices soaring 6.6% year-over-year in February. As the first quarter of 2024 comes to a close, affordable homeownership continues to be an elusive commodity for too many Americans.
