PHOTO: A US court has ruled that home sellers accusing the National Association of Realtors and a group of real estate brokerages of conspiring to inflate commission rates can move forward as a class action.
An explosive court ruling in the US has opened the door for potentially millions of sellers to seek to be reimbursed for commissions paid to buyer’s agents between 2015 and 2020.
A federal judge in Chicago has ruled that a group of home sellers accusing the National Association of Realtors (NAR) and a group of real estate brokerages of conspiring to inflate commission rates can move forward as a class action.
The lawsuit is taking aim at the requirement that sellers make “blanket unilateral offers of compensation” to buyer’s agents when a home is for sale via a multiple listing service.
The plaintiffs allege that the system puts pressure on sellers to offer high commissions to attract buyer’s brokers.
The lawsuit claims this violates the Sherman Antitrust Act by inflating seller costs, according to Inman.
Judge Andrea R. Wood, of the US District Court for the Northern District of Illinois, granted class certification in the larger of two federal commission lawsuits.
NYU economics professor and expert witness for the plaintiffs, Nicholas Economides, estimated damages could come to US$13.7 billion
Designation as a class means the seven plaintiffs can now pursue large-scale claims against the National Association of Realtors, RE/MAX LLC (RMAX.N), Long & Foster Inc and other corporate defendants as opposed to filing individual claims for monetary damages.
The class action is seeking monetary damages and includes home sellers who paid a commission between March 2015 and December 2020 in states including Texas, Florida, New Jersey, Ohio, Pennsylvania, Virginia, North Carolina and Colorado, court filings show.
The National Association of Realtors said it was “disappointed” in the decision and defended industry listing practices.
NAR spokesperson Mantill Williams said this practice 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.
“Pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers,” Mr Williams said in a statement.
“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.
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