Monumental NAR lawsuit snags class action status

Federal commission suit alleges antitrust violations by trade group, brokerages 

A photo illustration of NAR president Kenny Parcell (Getty, NAR)
A photo illustration of NAR president Kenny Parcell (Getty, NAR)

A pivotal lawsuit pitting homesellers against the National Association of Realtors and some of the country’s top brokerages is moving forward as a class action case.

A federal judge ruled in favor on Wednesday, Reuters reported, in the latest development for the lawsuit accusing NAR and brokerages RE/MAX, Anywhere and Keller Williams of conspiring to inflate commission rates.

Past home sellers are seeking more than $13 billion in damages. The judge’s ruling also created a separate class of current and future sellers attempting to bar alleged antitrust violations.

The lawsuit can represent homesellers who paid a commission between March 2015 and December 2020 in a number of places, including Texas, Maryland, North Carolina, Ohio, Colorado, Michigan, Florida, Nevada, Wisconsin, Minnesota, Pennsylvania, Arizona, Virginia, Utah and the District of Columbia.

It’s expected that each class will include thousands of participants, according to the judge. 

The motion for class action status was in part based on an opinion by NYU economics professor Nicholas Economides, Inman reported, who has estimated total class damages in the case could come to $13.7 billion — or $41.1 billion.

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In a statement, NAR expressed disappointment in the ruling and defended its practices, saying it “saves sellers time and money.”

The lawsuit claims a requirement for sellers to make “blanket unilateral offers of compensation” to buyer brokers when a home is placed for sale on a multiple listing service violates the law. The plaintiffs said the system pressures sellers to offer high commissions to bring in buyers’ brokers.

It’s not clear when the lawsuit will reach the trial stage. 

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NAR and brokerages are facing challenges to its commission model on all sides. A judge in December denied motions from NAR and brokerages for a summary judgment in a separate case, allowing it to go to trial. That lawsuit claims the sharing of commissions between listing and buyer brokers violates the Sherman Antitrust Act.

The case was originally scheduled to go to trial last month, but was postponed at the request of Anywhere, pushed to October.

Holden Walter-Warner

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