Money Management

Two class-action suits may upend the way real estate agents are paid for their work. Read on to find out what we know so far. 

If you’ve ever hired a real estate agent to sell property, you know the drill: As the seller, you’re responsible for paying commission to both the seller’s agent (the one working for you) and the buyer’s agent (the agent who helps the buyers make their offer). Typically, sellers are expected to pay 6% of the sales price — 3% to each agent. For example, $18,000 would be deducted from the proceeds of a home selling for $300,000, and $9,000 would be paid to each agent.

Now, two huge class-action lawsuits are challenging how real estate agents are paid. Here’s what we know about the cases.

The complaint

According to the multibillion-dollar lawsuits — Sitzer et al. v. NAR et al. and Moehrl et al. v. NAR et al. — this method of paying real estate agents is part of a scheme bilking home sellers out of billions of dollars yearly.

The problem, according to the suits, is the multiple listing service (MLS). The MLS is vital to the real estate market and one of the most important tools a real estate agent has available. While it’s easy to think of the MLS as a single service, it’s actually a web of around 600 independent, local databases, with nearly 97% owned or operated by local real estate associations.

Typically, when a potential home buyer goes online to look at homes for sale, they check an MLS website. There, they can view photos of the property, descriptions of rooms, tax information, sales price, and contact information for the seller’s agent.

The tricky bit is that the MLS requires any agent who wants to list through its service to follow the old-school way of paying. The seller agrees to pay both their agent and the buyer’s agent. At closing, the funds to pay the agents are deducted from the seller’s proceeds check. If a real estate agent refuses to agree to those terms, they cannot utilize MLS, one of the most powerful tools at their disposal.

Between a rock and a hard place

Home sellers have the right to negotiate how much they are willing to pay each agent. However, there’s a catch. There’s a practice known as “steering.” Agents representing buyers have access to how much commission is promised for each property in the MLS. Let’s say one seller is willing to pay the buyer’s agent 2%, but a nearby seller will pay the full 3%. An agent has the sway to discourage a buyer from viewing a property that pays out less.

Given the current system, lower commissions can be costly. Research shows that a house with a lower commission is less likely to be shown by buyer agents. Specifically, home sellers offering 2.5% or less are 5% less likely to sell their homes. And when they do sell, it takes an average of 12% longer.

As anyone who’s ever sold a home likely knows, the longer a home lingers on the market, the more buyers assume there’s something wrong with it, and the less they’re willing to pay. After factoring in today’s higher home prices and ever-changing interest rates, a buyer may look for a price break wherever they can find it.

A uniquely American system

There are twice as many real estate agents in the U.S. as homes for sale. This imbalance leads to intense competition. Still, commissions have remained high relative to other countries with similar housing markets. According to Business Insider, only 5% to 20% of home buyers work with a buyer’s agent in the United Kingdom, Australia, and the Netherlands. Those who do, pay 1% to 2% in commission. Sellers pay from 1% to 3% in commission, but only to their agent.

However, the National Association of Realtors (NAR) stands by its stance that the current system is the most efficient because buyers don’t have to pay out of pocket. In addition, sellers can avoid closing delays associated with which agent gets paid what.

Plaintiffs counter that the current system forces sellers to pay inflated commissions in order to prompt agents to generate interest in their homes.

Both lawsuits are seeking billions of dollars in damages. The first trial will be Sitzer et al. v. NAR et al., scheduled to begin in October 2023. The next case — Moehrl et al. v. NAR et al. — should reach trial in the first half of 2024.

If successful, these cases have the potential to forever change an established practice in American real estate. It may be that when a buyer shops around for the best mortgage, they’ll also have to determine how they will pay their buyer’s agent. And it may mean that sellers will eventually give up less of their sales proceeds to cover the cost of two agents.

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Disney+ isn’t just a streaming service. Find out what other benefits come with being a subscriber. 

Disney+ continues to be one of the best streaming services, no matter your age. The price is super affordable (starting at $7.99 monthly with ads), the library is extensive (reportedly numbering over 500 films and 7,500 TV episodes when it debuted in 2019), and it gives you access to some of the most memorable stories told through film, such as those from Disney Classics, the Marvel Universe, and Star Wars.

But the benefits of Disney+ go beyond streaming Disney movies. While you might know about Group Watch and the platform’s unlimited downloads capability, here are four lesser-known benefits of a Disney+ subscription.

1. Save up to 35% on select Disney Resort hotels

For 2023, Disney+ subscribers can save up to 35% at certain Disney Resorts for stays between Oct. 22 and Nov. 2 or Nov. 26 and Dec. 25, 2023.

A 35% discount off your Disney stay and credit card tab could save you hundreds. Plus, it’ll take some serious stress off your personal finances. That said, these are holiday periods (Halloween, Thanksgiving, and Christmas) and will draw crowds to Disney World, so if you’re interested, you’ll need to act fast. You also need to be a Disney+ subscriber when you book your room and when you show up for check-in. So if you’re subscribing to Disney+ for the discount, you’ll need to stay subscribed or resubscribe before your trip.

2. Link Disney+ with Movie Insiders for 50 points per month

Disney Movie Insiders is basically Disney’s free loyalty program that earns you points on Disney+ streaming, purchasing Disney movies, and watching Disney films in theaters. You can redeem points for gift cards, Disney Blu-Ray DVDs, posters, and other Disney merchandise.

By linking your Disney+ subscription with your Movie Insiders account, you’ll automatically earn 50 points monthly — plus a one-time 25-point bonus for signing up. That would earn you 600 points yearly, which is more than enough for a $5 Disney gift card (500 points).

3. Get surprise perks on Disney+ Day

Since 2021, Disney has announced new films and television shows in its virtual event, Disney+ Day. Disney will typically hype up the event by giving discounts to new Disney+ subscribers, re-releasing Disney films in theaters, offering promotions in Disney parks, and giving exclusive offers to Disney+ subscribers.

In 2022, the offer was pretty generous: Disney+ subscribers could bring third and fourth passengers aboard certain Disney cruises for free when they bought two full-fare tickets and stayed in the same room as the third and fourth guest. Disney has not announced its Disney+ day for 2023, so stay tuned for this year’s deal.

4. Watch Disney+ in over 60 countries

Finally, for international travelers, you can watch Disney+ in 60 countries and 11 territories. While that’s about a third of Netflix’s coverage (more than 190 countries), it’s still good news for those who travel frequently in Europe and parts of Asia and Africa. Here’s the full list of countries, according to Disney:

And the following territories:

Faroe IslandsFrench PolynesiaFrench Southern TerritoriesSt. Pierre and Miquelon Overseas Collective Aland IslandsSint MaartenSvalbard & Jan MayenBritish Indian Ocean TerritoryGibraltarPitcairn IslandsSt. Helen

Disney+ is just getting started

Disney+ debuted in 2019 and isn’t even as old as Disney’s primary audience. As such, I expect the streaming service to continue updating and improving the viewer and app experience. Even so, the service still is, as Disney says of it, “full of surprises.”

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Men and women generally save for retirement in different ways. Here’s how they compare and why that matters. 

When it comes to saving for retirement, there’s no such thing as one-size-fits-all. Your age, income, and financial literacy can all play a role in how you put money aside for the future. And according to new data from Vanguard, your gender could also have an impact. Let’s take a look at how men and women save differently, and what that could mean for you.

Women are more likely to opt in

In retirement plans, like in many other areas of life, participating is half the battle. And when it comes to enrolling in a 401(k) plan, women appear to have men beat.

At all earnings levels, women are opting into 401(k) plans at a higher rate than men. Evidence shows that across the earning spectrum, women are about 3% more likely than men to voluntarily defer their income into workplace retirement plans. And at lower income levels, the gap is even larger. At salaries of under $50,000 per year, women were between 9% and 13% more likely to enroll in 401(k) plans.

Even in automatic enrollment 401(k) plans, where participants must manually opt out, women hold a slight lead in participation. Evidence suggests that about 93% of employees will participate in such a 401(k) plan. However, women hold a 1 to 2 percentage point higher participation rate across income levels.

Men are more likely to trade

401(k) savers typically have a variety of options when it comes to investing their account contributions. And while these may not be the high-risk investments that are available in brokerage accounts, participants can readily buy and sell investments in their retirement accounts.

Saving for retirement can be a multi-decade affair. And for some, investing in a target date fund appears to be the perfect way to take the work out of retirement saving. A target date fund gradually invests in more conservative holdings over time, in order to match the changing risk tolerance of a saver nearing retirement. The data suggests that women are between 5 and 6 percentage points more likely to invest their 401(k) balances in a single target date fund.

Generally, those target date fund investors are unlikely to trade over the course of a given year. On the other hand, savers using other investments inside their 401(k)s may have to occasionally rebalance their holdings to reflect their changing risk tolerance. Therefore, it may come as little surprise that women, who are more likely to use a single target date fund strategy, are less likely to trade in their brokerage accounts than men.

Behind the 401(k) balances

The same data also shows a stark difference in 401(k) account balances among male and female employees. Across all employees, the average account balances of men were nearly 50% higher than those of women. The difference is attributable largely to the wage gap between men and women in highly compensated roles.

According to the data, 401(k) balances between men and women earning under $150,000 per year are similar. However, above this income level, the average male employee has nearly $120,000 more saved in their 401(k). Men’s wages, and by extension their retirement account deferrals, tend to be about one-third higher than their female counterparts. And over a decades-long career, those lost savings can make a significant difference in an account balance.

How you save for retirement can be influenced by many different factors, but ultimately the decisions you make today will affect you throughout retirement. So, while your gender might indicate how statistically likely you are to enroll in a savings plan or how you might invest your hard-earned dollars, that doesn’t tell the whole story. Instead, a wise investor will recognize that a bright financial future depends on intentional actions today.

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A massive mistaken charge, frozen account, or stolen card can be a nightmare when you’re on vacation. Find out how to avoid money problems when you’re abroad. 

Dominique Adams and Douglas Ordonez made headlines this week after sharing their nightmare currency mix up on social media. “Uber charged me $29,994 for a single ride!” said Adams on TikTok. The ride should have cost 29,994 Costa Rican colon — around $55. Instead, the trip cost almost as much as a new car.

It took several days for Uber and Adams’ financial institution, Altura Credit Union, to resolve the hold on the money. In the meantime, the couple had limited cash available to cover their five-year anniversary trip.

Abroad without funds

According to Adams, she reached out to both the credit union and Uber. Her credit union said the payment went through because she’d put a travel notice on her card. “They basically told me that it was my fault because I put a travel notice on my card and because of that the charge was able to bypass all of the security measures, all of the policies that were in place with the bank,” she said.

Uber told Insider, “As soon as we received the user’s report, our support team promptly addressed the issue and released the authorization hold mistakenly applied due to a bank error in Dollars and not in Colones.” It added that it can take time for the refund to be processed.

Another issue? Adams had unintentionally used a debit card rather than a credit card to pay for the ride. Credit card payments generally provide more protection than debit cards against fraudulent transactions. “I always use my credit card for international charges. Unfortunately, I was rushing & didn’t realize my debit card was attached to my @Uber account,” she said.

Don’t let money issues ruin your vacation

Holidays are supposed to be fun. But being in another country without access to money can be extremely stressful. There are several ways a travel credit card can help. Many travel cards don’t charge foreign transaction fees and let you earn extra rewards on travel-related expenses. Plus, your card may come with additional benefits such as travel insurance and airport lounge access.

In addition to using a great travel credit card, there are a few ways you can ensure your vacations are free from money hassles. These include:

Use more than one credit card: A back-up credit card can make a world of difference when you’re traveling. If one card is stolen or gets frozen, you won’t have to stop your trip as you can use the other card for your vacation costs. Don’t carry both cards at the same time. Take some cash with you: It’s usually easy to withdraw or exchange money at the airport, but you never know. The ATM might be out of order or may not accept your card, and the exchange desk may not be open. Take a couple hundred dollars in cash, as well as some local currency if you’re able to. Alert your bank before you leave: Make sure your bank has your updated contact information and knows that you plan to travel. Otherwise your international transactions may trigger suspicious activity alerts, which can cause your card to be frozen. Check your bank’s travel policies: Find out what your card limits will be while you are traveling and ask whether you’ll be charged fees for foreign transactions. If you’re worried about the story above, set daily spending limits with your bank.Know what you’ll do if your cards get stolen: Write down the number of your bank accounts, debit and credit cards, and the contact information in case your card is lost or stolen. Your bank or card issuer may also have a number you can call if you need support on your trip.Get travel insurance: One of the perks of some credit cards is travel insurance that may cover you against flight delays, lost luggage, or theft. Find out what policies might apply to you, and decide if you need to pay for additional insurance.

Personally, I’m also a big fan of traveler’s checks. They may be old fashioned, but they can be invaluable in case of emergencies. When you cash a traveler’s check, you need to sign and show your ID, making them less attractive to thieves. If they are stolen they can be quickly replaced, as long as you keep a record of the numbers.

Bottom line

Credit cards go a long way, and they offer more protection with every passing year. But a mix of cash, cards, and even travelers’ checks can mean you’re not reliant on any one spending route. If you get stung by a mistaken or fraudulent charge, whether it’s $3 or $30,000, you’ll have time to resolve it. That means you can continue your vacation while your bank or credit card issuer sorts out the problem.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Emma Newbery has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.

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Conventional loans are the little black dress of the mortgage world — always in style. Learn why one is worth considering if you want to buy a house. 

If you’re in the market for a new mortgage loan so you can buy a house, you have options. If it’s your first time buying and your credit score isn’t stellar, you might consider an FHA loan. If you’re a retired or active-duty military service member, you likely have access to a VA mortgage loan. And if you’re hoping to buy in a rural area and don’t have a high income, a USDA loan might be just the ticket. But for many people, a conventional mortgage loan is worth at least considering on your journey to homeownership. Here’s why.

1. You’ll have your pick of lenders

It’s very easy to find a conventional mortgage loan, as opposed to more specialized home loans because just about every mortgage lender offers them. Conventional mortgage loans are the most common type of mortgage and account for 70% of all home purchases. You can find them offered by both traditional and online-only banks, credit unions, and even online lenders. As a result, if you decide to go with a conventional loan, it won’t be a hard to find several to get pre-approvals from — thereby enabling you to save money on a mortgage and find the best lender for you.

2. Your agent will know how they work

If you’re a first-time home buyer, you likely have a lot of questions about the whole process, and that includes mortgage loans and how they work. The Ascent offers a lot of excellent information about mortgages, but you may also want to consult your real estate agent, as they can be your best friend on your journey to homeownership.

It’s much more likely that your agent has experience with conventional loans as opposed to some government-backed options like VA and USDA loans. If you want to buy with one of these loans, it might require more legwork to find an agent who can speak with authority on the subject. You won’t have to jump through hoops to find one who knows conventional loans, though.

3. They often come with flexible down payment options

It is overwhelmingly likely that you will have to make some kind of down payment if you buy with a conventional loan. But it likely won’t have to be 20%, and could be as little as 3% if you have an exceptional credit score.

It’s worth noting that if you buy with a conventional loan and put down less than 20%, you will have to pay for private mortgage insurance (PMI), which adds a chunk of money to your monthly mortgage payments. This protects your lender, rather than you — but it can be canceled once you reach 20% equity in the home. And unlike the mortgage insurance premiums (MIP) that you’d pay if you got an FHA loan, there is no upfront cost for PMI alongside ongoing monthly costs.

4. Sellers may be more likely to consider your offer

It’s unfortunate, but some types of mortgage loans have an undeserved reputation among home sellers (and selling agents). Many agents and sellers are less familiar with government-backed mortgages like USDA and VA loans, and they may be concerned that requirements to use one mean that a home is less likely to pass a specialized inspection, resulting in a headache for a seller. This is particularly insidious for VA loan buyers, because the VA loan is one of the best benefits offered to military members, and if you qualify for one, VA loans are worth exploring further.

Some sellers might also be less inclined to accept an offer from an FHA loan borrower, wrongly believing that they are in less stable financial shape to buy or that an inspection could turn up costly problems with the home. The National Association of Realtors found that some agents even wrongly believe that FHA loans take longer to close and may steer sellers away from accepting offers from FHA borrowers. Using a conventional loan may help you get an offer on a home accepted.

It’s worth noting that you may have a harder time qualifying for a conventional loan than a government-backed loan, due to more stringent credit score and debt-to-income ratio requirements. But if you have a strong credit score and can handle making a down payment on your new home, give conventional loans a look.

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Even if you DIY, you can’t expect moving house to be cheap. Read on to learn some costs you should definitely budget for when you move. 

There are a few things I have expert-level knowledge of, and moving is one of them. I’ve moved 35 times in my life, and moving always costs more than you expect. It’s impossible to anticipate all of your expenses, but let’s take a look at some of the major ones you don’t want to overlook when you’re making a moving budget.

1. That first grocery run

This cost may not be applicable if you’re making a local move — you’ll likely be able to just load up a cooler or a few grocery bags and drive the contents of your refrigerator, freezer, and pantry to your new digs. But if you’re moving long distance, chances are you don’t want to worry about bringing a bunch of food with you (okay, perhaps your spice cabinet, as those items are generally small and non-perishable). So it’s worth considering how much it might cost to restock everything you normally keep in your kitchen.

2. Takeout meals

I have yet to have a move where I didn’t eat a single takeout meal during the process. Moving day (and perhaps also the day after) food doesn’t have to be expensive, as there are ways to save on takeout, and you can often find a deal on pizza (a moving day classic). But don’t forget to account for this cost.

3. Packing supplies

If you’re paying for a full-service move, you might not have to account for this individual cost, but if you’re packing your own stuff, you’ll need to foot the bill for the packing tape, boxes, bubble wrap, and any other supplies to ensure your belongings are safe for the journey. My favorite hack for packing is relying on plastic totes. They’re reusable, water proof, and can be easily labeled (and relabeled) by way of masking tape and a Sharpie marker.

4. Cash tips for your moving crew

I do recommend hiring movers, even if you pack your own belongings, because doing so will save you so much stress (if not necessarily money — Angi reports that the average cost of hiring movers is $1,709). But don’t forget to hit up an ATM to take some cash out of your checking account to give your moving crew a tip for a job well done.

5. Replacements for anything that breaks

There’s really no sure way to anticipate this cost, but you should at least be considering it. It’s likely that some item or other won’t survive the move. If you have something truly precious to you, it pays to move it yourself, in a car (if it fits), rather than having it go into a moving truck. Otherwise, be ready to replace something or other — my 2018 move (which wasn’t far; it was only from one side of a city to the other) saw the loss of all three of my six-foot bookshelves.

6. Gas for your moving truck

Whether you DIY your move or hire professionals, you’ll have to shell out for gas. Many truck rental businesses will charge you a premium if you forget to return their vehicles with at least the same amount of gas as you started with, so don’t forget to hit a gas station before you return the truck.

7. Hiring a babysitter or a pet sitter

As stressful as moving day is for you, it’s worse for your pets and small children, because it’s a loud and confusing day and they won’t be able to understand what’s happening. If you don’t have a family member or friend who can be the point person for the pets or little kids on moving day, you might want to hire someone to keep them calm and as happy as possible.

8. A surprise hotel stay

Ideally, you won’t need to pay for a hotel stay in the course of moving, but if you have a long-distance move comprising a few days, you probably will incur this cost. Or if you arrive in your new town and find that your new home can’t be occupied right away, for whatever reason, get ready to hand over your credit card to pay for a hotel room. This happened to me when I first moved to my current state in 2016 and showed up after two days on the road to a filthy apartment with many broken components.

9. Large item moving fees

Some moving companies might charge you extra for moving especially cumbersome items (grand piano, anybody?). Ideally, a representative from the company will be able to give you a solid binding estimate of how much your move will cost, but in case they can’t, remember this expense.

10. A storage unit

If you’re moving in stages, or are in some other kind of transition (such as downsizing from a larger home to a smaller one), you might need to rent a storage unit. When I moved from the East Coast to the middle of the country almost a decade ago, I had to pay for a storage unit in my home state for several months until I could get a freight moving service to bring the items in it to me.

Moving is never cheap, and almost always ends up costing more than you expect. Do yourself a favor and consider these hidden expenses when you’re making a moving budget.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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