The residential real estate industry is facing yet another antitrust lawsuit targeting the long-standing practice of home sellers paying the commissions of buyer’s agents. Filed on December 27th in Missouri federal court, Daniel Umpa v. National Association of Realtors alleges the NAR and large national brokerages like Compass and Keller Williams conspired to maintain inflated buyer agent commissions through anticompetitive practices.
This latest suit comes on the heels of the Department of Justice’s ongoing investigation into potentially anti-competitive industry practices related to real estate commissions and access to MLS listings. It also follows similar buyer broker commission lawsuits brought in the past two years by home sellers against NAR and large brokerages. The new complaint alleges the defendants worked together to enact NAR policies like the ‘Buyer Broker Commission Rule’ which required listing brokers to make blanket, non-negotiable commission offers to buyer brokers. This rule allegedly discourages lower commissions and impedes market competition to the detriment of home sellers.
If successful, the plaintiff seeks injunctive relief under antitrust laws forcing changes to current industry practices, as well as damages related to overcharges paid by class members stretching back to late 2019. With the DOJ investigation ongoing and buyer broker commissions under continued legal scrutiny, pressure mounts for transparency and reform in how real estate agents are compensated. Though the industry justifies maintaining the status quo to ensure access to listing data critical for buyers and sellers, critics argue new technologies make this argument increasingly dubious. One thing is clear – more antitrust litigation is brewing which could profoundly reshape residential brokerage.
Umpa vs The National Association of REALTORS, et al
(click on image to view entire complaint)
