But already the NAR and several real estate brokerages are facing another lawsuit over agent commission rules. Fresh off winning the verdict in the 2019 case, the lawyers filed a new class-action lawsuit in the U.S. District Court for the Western District of Missouri that seeks class-action status covering anyone in the U.S. who sold a home in the last five years. It names the trade association and seven brokerage companies, including Redfin Corp., Weichert Realtors and Compass Inc.
“What’s at issue nationwide is costing Americans about $60 billion in extra real estate commissions,” said Michael Ketchmark, one of the attorneys representing the plaintiffs in the lawsuits.
The focus of the lawsuits is an NAR rule that requires that home sellers offer to pay the commission for the agent representing the homebuyer when they advertise their property on a local Multiple Listings Service, where a majority of U.S. homes are listed for sale. This is in addition to also having to cover the commission for their listing agent or broker.
The NAR's rules also prohibit a buyer's agent from making home purchase offers contingent on the reduction of their commission, according to the complaint.
“Defendants’ conspiracy forces home sellers to pay a cost that, in a competitive market and were it not for defendants’ anticompetitive restraint, would be paid by the buyer,” the plaintiffs argued in the lawsuit filed Tuesday.
Plaintiffs also claim that the NAR requirement effectively keeps commissions for a homebuyer's agent artificially high.
If NAR’s “Mandatory Offer of Compensation Rule” were not in place, then homebuyers would foot the bill for their agent's commission, which would open the door for competition — and lower commissions — among agents vying to represent a homebuyer, the plaintiffs contend.
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Real estate industry facing pushback to longstanding rules setting agent commissions on home sales