Antitrust lawsuit targets LA NAR chapters, brokerages

Firms in LA County and Bay Area

LA Antitrust Lawsuit Targets NAR, Local Brokerages
NAR's Kevin Sears (Photo Illustration by Steven Dilakian for The Real Deal with Getty and NAR)

The wave of antitrust lawsuits targeting residential players big and small in markets across the country has landed in Los Angeles. 

The latest case, filed yesterday in California’s Central District Court, names local branches of the National Association of Realtors in Los Angeles County, Central California and the Bay Area as defendants in a dispute over rules concerning buyer broker commission. 

The case also names brokerages The Agency, Compass, eXp Realty, Berkshire Hathaway HomeServices, Rodeo Realty and Pinnacle Estate Properties as defendants. 

The plaintiffs, French national Gael Fierro and former North Fork resident Patrick Thurber, claimed NAR practices “hinder innovation and entry by new, lower-cost real estate brokerage service providers,” adding its policies kept buyer broker commission “at levels that would not exist in a competitive market.”

According to the suit, Fierro sold his Los Angeles home in December of 2020. He claims to have paid a total of $51,300, which was split between his listing agent at Aspire Los Angeles and the buyer’s agent from The Agency. Thurber, meanwhile, sold his Madera County home in July of 2022 and has since moved to Illinois. He paid a total $27,000, which was shared by his listing agent at Century 21 Ditton Realty and the selling agent at Stars and Stripes Real Estate.  

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At the center of the dispute is the NAR’s Clear Cooperation Policy, which requires homeowners to pay buyer agent’s compensation in exchange for listing their home on a multiple listing service (MLS). The plaintiffs claim that market forces would have reduced compensation for buying agents had it been left on its own. 

“Indeed, in the age of the internet where a buyer is able to search and locate their next house on their computer or smartphone without the assistance of a real estate agent — and they often do just that — a competitive market should have forced lower buyer broker commissions as a reflection of the decreasing need for their services,” the complaint read.  

The plaintiffs are seeking class certification and an injunction that would bar NAR from requiring payments to buyer brokers. 

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NAR claimed in a statement to The Real Deal defended the policy, saying it “makes efficient, transparent, and accessible marketplaces possible.” 

“Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation,” the organization said. “The National Association of Realtors will respond to this complaint in court.”

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