DOJ Suggests Ending Seller-Paid Buyer Agent Commissions

Yesterday, the Department of Justice filed a Statement of Interest  concerning the Nosalek v. MLS PIN case.  In the class action lawsuit Nosalek v. MLS Property Information Network, Inc., plaintiffs allege that mandatory commission agreements for buyer-brokers on the MLS system are anticompetitive, leading to artificially inflated commission rates for sellers, in violation of antitrust laws.  Previously, a settlement was reached by the parties in the lawsuit, but the DOJ intervened, asking the court to hear the views of the United States before deciding whether to approve the settlement.  This statement of interest was what the DOJ asked the court to wait for.

In the Statement of Interest, the Department of Justice conducts a critical examination of buyer agent commissions, suggesting that a transformative approach to real estate transactions is needed. The Department critiques the current practice of seller-offered commissions to buyer brokers for maintaining artificially high fees and stifling competition. It does not think the proposed changes in the settlement go far enough, stating, “as long as sellers can make buyer-broker commission offers, they will continue to offer ‘customary’ commissions out of fear that buyer brokers will direct buyers away from listings with lower commissions.” Their alternative? The DOJ states, “the parties could propose an injunction that would prohibit sellers from making commission offers to buyer brokers at all. That injunction would promote competition by empowering buyers to negotiate directly with their own brokers.” Ah, what I’ve been predicting for some time now, that a real estate agent will only be able to be paid by their client.

While this case is in Massachusetts and does not directly impact the St. Louis real estate industry, industry leaders throughout the country have been anxiously monitoring the suit to get a better idea of what the DOJ is going to want from the industry as a whole, which I think we clearly see with this filing.


Statement of Interest of The United States – Nosalek v MLS PIN

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