This agent commissions suit could rock the resi industry

NAR, Realogy say they will appeal federal ruling

National /
Apr.April 26, 2022 10:30 AM
NAR president Leslie Rouda Smith (Facebook/Leslie Rouda Smith, iStock)

NAR president Leslie Rouda Smith (Facebook/Leslie Rouda Smith, iStock/Photo Illustration by Steven Dilakian for The Real Deal)

A federal court ruling paved the way for homesellers to seek reimbursement on commissions paid to buyer agents, threatening to rock the residential real estate industry.

Judge Stephen Bough ruled on Friday that one of two federal commission lawsuits could receive class-action certification, Inman reported. The lawsuit started three years ago, when two homeseller plaintiffs Joshua Sitzer and Amy Winger filed a lawsuit against the National Association of Realtors, Realogy and others, claiming the sharing of commissions between listing and buyer brokers violated the Sherman Antitrust Act.

The lawsuit hoped to have homebuyers pay their brokers directly instead of having listing brokers pay buyer brokers from what the seller pays listing brokers. The lawsuit alleges the model inflates the costs to sellers.

The judge ruled that class-action certification is the “superior method for fairly and efficiently adjudicating the controversy.” With the decision, the Sitzer/Winger lawsuit can now represent any seller who paid a broker commission for a residential real estate deal across four Missouri MLSs, going back to April 2014.

The legal fallout could be massive. Hundreds of thousands of homesellers can now seek reimbursement on commissions paid to buyer agents in the last eight years, totaling more than $1 billion.

NAR and Realogy both said that they plan to appeal the decision. Keller Williams also said it was aware of the ruling without declaring whether or not it would appeal, but did note the court decision didn’t make mention of the merits of the plaintiffs’ case.

An even bigger federal case along the same lines is unfolding in Illinois. Should NAR and Realogy lose their appeals, it could set a precedent for other homesellers to challenge the broker commissions model across the country.

[Inman] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    A Smurf house? (Caldwell Banker)
    Smurf-erriffic! Michigan home seems to be inspired by cartoon
    Smurf-erriffic! Michigan home seems to be inspired by cartoon
    The home where Christopher Watts killed his pregnant wife is on the market. (Getty)
    Colorado home where infamous murder took place quietly listed
    Colorado home where infamous murder took place quietly listed
    From left: Amy Schumer and 190 Riverside Drive; Jimmy Fallon and 34 Gramercy Park East (Getty Images, Beyond My Ken, CC BY-SA 4.0 - via Wikimedia Commons, iStock)
    Jimmy Fallon, Amy Schumer selling Manhattan pads
    Jimmy Fallon, Amy Schumer selling Manhattan pads
    OKO's Vladislav Doronin and the Crown Building ( OKO Group, Aman)
    Crown Building notches another peak sale with $55M condo
    Crown Building notches another peak sale with $55M condo
    R-L: Willow's Kevin Danehy, Era Ventures' Clelia Warburg Peters, Fifth Wall's Brad Greiwe and The Real Deal's Hiten Samtani (Photo by Paul Dilakian)
    Real estate tech is coming for your business
    Real estate tech is coming for your business
    A photo illustration of a crystal ball predicting future home prices (iStock)
    Home sales, building to slow: Fannie Mae
    Home sales, building to slow: Fannie Mae
    New York skyline
    Rising interest rates will dampen city’s investment sales market this year
    Rising interest rates will dampen city’s investment sales market this year
    L-R: Douglas Elliman CEO Scott Durkin, Serhant CEO Ryan Serhant, Brown Harris Stevens CEO Bess Freedman, The Real Deal's Hiten Samtani (Photos by Paul Dilakian)
    Top resi execs talk brand building, tech and politics at TRD NYC event
    Top resi execs talk brand building, tech and politics at TRD NYC event
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...