“Local broker marketplaces ensure equity, transparency, and market-driven pricing options for the benefit of home buyers and sellers. “The pro-competitive, pro-consumer local broker marketplaces serve the best interests of buyers and sellers,” NAR said. In response to a request for comment, NAR emailed a statement to KCUR saying it was disappointed with Bough’s ruling, which it said it plans to appeal. It says that it allows many first-time, low-income buyers to purchase a home they couldn’t otherwise afford because they don’t have to pay brokers directly. NAR argues that the MLS system is efficient and beneficial to consumers. “The cornerstone of Defendants’ conspiracy is NAR’s adoption and implementation of a rule that requires all brokers to make a blanket, non-negotiable offer of buyer broker compensation …when listing a property on a Multiple Listing Service …,” the lawsuit states.Īs a condition of listing their homes on an MLS, a centralized database listing homes for sale, sellers are required to agree that the listing agent will split the commission with the agent representing the buyer.Ībsent that requirement, the plaintiffs claim, “seller brokers would set a commission to pay themselves alone and would likely begin to engage in more vigorous competition with one another to lower their rates and/or provide additional services to justify their newly transparent rates.”Ī federal judge in Chicago has allowed a similar class action lawsuit to proceed, ruling that the home sellers had supported their allegations of a “pricing system in which the seller is essentially locked into a buyer-broker commission rate upfront that neither the buyer nor the seller have the incentive or ability to negotiate.” The plaintiffs allege the real estate brokerages and NAR have conspired to require home sellers to pay brokers representing home buyers inflated amounts, in violation of federal antitrust law, Missouri antitrust law and the Missouri Merchandising Practices Act. Realogy Holdings owns and operates Century 21 and Coldwell Banker, among others. HomeServices of America, an affiliate of Berkshire Hathaway, owns and operates ReeceNichols Real Estate and Prudential Real Estate, among others. The defendants own and operate some of the largest real estate brokerages in the country.
The suit names the National Association of Realtors (NAR) and the nation’s four largest national real estate broker franchisors: Realogy Holdings Corp.
The Kansas City case, along with a nearly identical federal lawsuit in Chicago, challenges as uncompetitive rules that consumer advocates have long criticized for artificially inflating real estate commissions. District Judge Stephen Bough on Friday ruled that the lawsuit, which was originally filed in 2019 on behalf of Missouri home sellers who had listed their homes on the Multiple Listing Services system (MLS), met the criteria for a class action, including numerosity and common questions of law or fact. A federal lawsuit in Kansas City challenging rules requiring home sellers to pay commissions to brokers representing home buyers has been certified as a class action, meaning thousands of home sellers in the Midwest may be eligible to recover damages if the plaintiffs prevail.
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