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Chicago

Chicago homebuyer sues city’s biggest brokerage over commissions

Claims @properties took part in conspiracy with National Association of Realtors

Chicago Homebuyer Sues @properties Over Broker Commissions
@properties' Thaddeus Wong (Facebook, Getty)

A homebuyer sued Chicago’s biggest real estate brokerage this week over an alleged “conspiracy that perpetuates anti-competitive measures.”

James Tuccori alleges that @properties Christie’s International Real Estate uses its dominant market position to uphold a controversial commission structure detrimental to homebuyers, Crain’s reported. The lawsuit is one of many ripples off of the monumental Sitzer/Burnett case, which resulted in a $1.8 billion jury award in October.

Tuccori, who bought a house in West Town for $785,000 in 2018 with the help of @properties, claims the company is structured to inflate agents’ commissions, resulting in higher overall purchase prices.

The lawsuit, filed in Cook County Circuit Court and subsequently moved to the U.S. District Court for the Northern District of Illinois Eastern Division, seeks class-action status.

The crux of the complaint revolves around the National Association of Realtors’ long-standing mandate that requires a split of the sales commission — typically ranging from 5 to 6 percent — between the seller’s and buyer’s agents. Tuccori’s lawyers contend that this regulation stifles competition by preventing buyer’s agents from negotiating lower commissions.

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The lawsuit is aimed at the wrong party, @properties said. It “makes no specific allegation that @properties was or is involved in any such activities,” attributed to NAR in the suit, the brokerage said.

The lawsuit is one of many to follow the Sitzer/Burnett verdict, in which a Kansas City jury recently found NAR and other prominent brokerages guilty of colluding to maintain high commissions at buyers’ expense.

Critics argue that the archaic commission-sharing paradigm, rooted in NAR’s century-old endeavor to standardize the industry, has become obsolete. With the digital age empowering homebuyers to bypass traditional agent-centric searches, support for revamping the commission system has gained momentum. 

Tuccori’s legal team emphasized that the existing framework unjustly restrains buyers, benefiting NAR affiliates like @properties.

—Quinn Donoghue 

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