The National Association of REALTORS® (NAR) has come under attack over the past few months as a defendant in two class-action lawsuits, Christopher Moehrl v The National Association of REALTORS® and Joshua A. Sitzer and Amy Winger v The National Association of REALTORS® filed in March and April of 2019 respectively, and, most recently, a complaint brought by the Department of Justice, United States v National Association of REALTORS® filed this month. The latter came with a pre-arranged proposed settlement with NAR. I should also mention the two class-action lawsuits have as additional defendants Realogy Holdings Corp (the own and operate several franchises, some of the local ones include Coldwell Banker-Gundaker, Better Homes & Gardens, ERA, Sotheby’s, and Century-21), HomeServices of America, Inc. (owner of Berkshire Hathway Home Services), Re/Max and Keller Williams.
While there are additional issues raised in the lawsuits and DOJ complaint, central to them are buyer’s agents’ commissions. Issues raised include:
- From the DOJ complaint:
- Allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free;
- Enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential home buyers;
- From the lawsuits:
- Sellers of residential property have been forced to pay inflated costs to sell their homes through forced payments of commissions to buyer brokers;
- Home sellers have been forced to set buyer broker commissions to induce buyer brokers to show the sellers’ homes to prospective buyers;
- Price competition has been restrained among brokers seeking to be retained by home buyers, and by brokers seeking to represent home sellers; and
- Defendant Franchisors and their franchisees have inflated their profits by a significant margin by the increased total commissions and increased buyer broker commissions.
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Continue reading “Coming Soon To A REALTOR® Near You – Commission Transparency“
