The lawsuits, known as Sitzer/Burnett and Christopher Moehrl, allege the brokerages violated the Sherman Antitrust Act by colluding with the National Association of Realtors (NAR) to inflate commissions paid by home sellers. The antitrust act prohibits price fixing, this means that competing brokers, real estate governing bodies such as NAR, or multiple listing organizations cannot agree to set sale conditions i.e. fees such as commissions.
Typically when a home is contracted for listing a set percentage is charged to the seller, in our market locally this is typically 5-6%. The seller agent brokerage then splits that percentage commission with the eventual buyers agent and brokerage. The cases claim that NAR rules violate antitrust laws and inflate the fees provided to the buyer’s agent and brokerage by requiring the listing entity to pay a buyers agent for listing a property on the MLS.
The current bombshell suits are going after the big brand brokerages including Keller Williams, Anywhere Real Estate and HomeServices of America, along with the National Association of Realtors. Anywhere, the parent company of Corcoran, Coldwell Banker, Century21 and Sotheby’s International Realty, agreed earlier this month to pay $83.5 million to settle the lawsuits. The firm also agreed to stop mandating sellers pay commissions for the buyers’ agents. And two weeks later— just a couple days ago— a second defendant in the two class-action lawsuits challenging real estate compensation fees reached a settlement with the plaintiffs. RE/MAX agreed to pay $55 million to resolve all claims against the company. RE/MAX has denied the allegations against it but settled in order to “remove uncertainty from the ongoing lawsuits”. Under the proposed settlement, which still requires court approval, RE/MAX will commit to changes to its business practices and no longer require sellers to pay the buyer agent’s commission.
The National Association of REALTORS®, also named in the lawsuits, has said it plans to continue arguing its case for pro-consumer, pro-competitive local MLS broker marketplaces, which enable listing brokers and their clients to determine the amount of compensation offered to a buyer’s agent in connection with MLS listings.However, NAR said in a statement that it is not backing down from its argument: “Settlement is always an option for any party in litigation. The recent settlements do not change how the case is presented to the court or NAR’s commitment to defend ourselves. We are confident we will prevail in proving the lawfulness of the rules under attack. Pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers. The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people.”
The trial is upcoming— scheduled to begin October 16th and last three weeks in Kansas City, Missouri. The National Association of Realtors, Keller Williams, Anywhere (settled $83.5M), RE/MAX (settled $55M), and HomeServices of America are named in the suit which was originally filed in 2019 and won class-action status in April 2022.
