- NAR’s lawsuit takes aim at practice of sellers paying buyer’s broker commission
- Judge argued that plaintiffs would pay “substantially lower commissions” if buyer broker commission rules not in place
Filed in 2019 on behalf of a seller, one of two related lawsuits seeking class-action status alleged that sharing commissions between the listing and buyer broker (buyer broker commission rules) violates the Sherman Antitrust Act by requiring that the seller is required to pay the costs of the buyer’s broker in a home sale.
That same year in May 2019, the National Association of REALTORS® (NAR), joined by Realogy, RE/MAX, Keller Williams, HomeServices of America, Long & Foster Companies and HSF Affiliates, filled a motion to dismiss that lawsuit claiming the plaintiff (the seller) failed to show that the buyer broker commission rules are “an unreasonable restraint of trade” and an “antitrust injury.”
The US District Court Judge Andrea Wood denied this motion to dismiss on October 5. Judge Wood’s decision takes aim at the practice of home sellers being required to pay the buyer’s broker commission. Wood said that the plaintiffs involved in this case would have paid “substantially lower commissions” if the buyer broker commission rules were not in place.
Further, Wood’s ruling said, “…Plaintiff’s allegations plausibly show that the buyer-broker commission rules prevent effective negotiation over commission rates and cause an artificial inflation of buyer broker commission rates in the markets served by the MLS identified in the (complaint.)”
Later thus month, all parties in this lawsuit are to set a schedule to end the discovery involved in this case and to discuss the class-action status the plaintiffs are seeking.
A spokesperson for NAR said they were “disappointed” with the ruling but that this decision was only “the first round.” A Realogy spokesperson was also “disappointed” while a spokesperson for RE/MAX said they would “…continue to vigorously defend ourselves against a complaint that is baseless.” There were no other comments from other defendants in this case.
Thanks to InmanNews.
Also read: Podcast: Proven, Powerful Buyer Scripts. What To Say, How To Say it. | Tim and Julie Harris, 4 Things for Homebuyers to Consider in 2020, Podcast: 23 Proactive Lead Generation Rules | Real Estate Scripts | Tim and Julie Harris