Commission Lawsuit Moves Forward

David Goldsmith

All Powerful Moderator
Staff member
NAR’s motion to dismiss broker fee lawsuit shut down
Country’s biggest brokerages accused of violating antitrust laws

A federal judge has denied a motion to dismiss a lawsuit over broker commissions on residential real estate deals.
A U.S. District Court judge threw out motions from the National Association of Realtors and some of the nation’s largest brokerages to dismiss the lawsuit, Inman reported. The judge ruled that the plaintiffs’ allegations show that they would have paid lower commissions if the current broker rules had not been in place, and that the rules established by NAR created an artificially high commission rate.

The lawsuit was originally filed in 2019 by a property seller, and is now seeking class action status. The complaint alleges that the sharing of commissions between the listing and buyer brokers leads to higher seller costs and violates the Sherman Antitrust Act.

NAR argued in its motion that the lawsuit misportrayed the rules for multiple listing services, and that the plaintiffs failed to show they suffered an “antitrust injury,” according to Inman.
But the judge who dismissed the motion disagreed, and wrote in his ruling that, “But-for Defendants’ conspiracy, each plaintiff would have paid substantially lower commissions.”
“As the case moves forward, we intend to demonstrate how the MLS system creates competitive, efficient markets that benefit home buyers and sellers as well as small business brokerages,” a NAR spokesperson told Inman.

The other defendants in the lawsuit are HomeServices of America, Keller Williams, RE/MAX, Realogy, Long & Foster Companies HSF Affiliates. Those firms backed NAR’s motion to dismiss the suit, and those requests were also dismissed by the judge.
 

David Goldsmith

All Powerful Moderator
Staff member
NAR hit with another antitrust lawsuit over commissions and MLS rules
Proposed settlement aims to bring more transparency and competition to the industry

The National Association of Realtors has once again had its competitive practices called into question — this time by the federal government.
The Department of Justice announced Thursday that it filed a lawsuit against the trade association, alongside a proposed settlement, that takes aim at NAR’s “anticompetitive rules, policies, and practices,” according to a DOJ release.

The proposed settlement from the Antitrust Division mandates that NAR change rules that currently allow brokers to withhold information from prospective homebuyers regarding fees and commissions. The proposed changes must also carry over to multiple listing services associated with NAR.
“If approved, the settlement will enhance competition in the real estate market, resulting in more choice and better service for consumers,” the DOJ release said.

In a statement to Inman, NAR said it disagreed with the DOJ’s characterization and admitted no wrongdoing, but had reached an agreement and “fully resolved” the issues raised. A spokesperson added that the organization remained “focused on supporting our members as they preserve, protect and advance the American dream of homeownership.”

The goal of the settlement is to allow for more transparency — and thus competition — in the real estate market, which could result in more choices and better service for homebuyers. The agreement still awaits approval from the court.

“Home buyers and sellers should be aware of all the broker fees they are paying. Today’s settlement prevents traditional brokers from impeding competition — including by internet-based methods of home buying and selling — by providing greater transparency to consumers about broker fees,” Makan Delrahim, assistant attorney general of the DOJ’s Antitrust Division, said in a statement. “This will increase price competition among brokers and lead to better quality of services for American home buyers and sellers.”
With 1.4 million members, NAR has a wide scope of influence. It establishes and enforces policies for agents who belong to the organization, along with affiliated multiple listing services.

NAR has previously come under fire for its alleged anti-competitive practices, with several antitrust lawsuits filed against the organization in recent years.
 
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