Nevada Brokers “Conspired” to Inflate Fees, Lawsuit Claims

A Las Vegas homeowner claims local real estate agents “conspired” to inflate broker commissions since the dawn of the pandemic.

Nathaniel Whaley has filed a federal class-action lawsuit against the Las Vegas Realtors, the market’s largest trade association of home agents, alleging it violated antitrust laws by conspiring to jack-up fees since 2020, the Las Vegas Review-Journal reported.

The lawsuit is among more than a dozen copycat complaints since a federal jury in Kansas City, Missouri last fall found the National Association of Realtors and area brokerages on the hook for $1.8 billion in damages for conspiring to artificially inflate commissions on home sales.

Whaley seeks a jury trial, injunctive relief from the practice and unspecified damages.

The homeowner says he paid what amounts to a “substantial” commission of $40,250 to the buyer’s broker during the sale of his Las Vegas Valley home in April 2022, listed on the Northern Nevada Multiple Listing Service for $805,000, according to the lawsuit.

The total commission charged was 5 percent, of which 3 percent was paid to the buyer’s broker.

The lawsuit targets the alleged monopoly that the MLS has on the market, claiming “the MLSs in Nevada are controlled by local realtor associations who adopt and enforce the NAR rules.”

Whaley alleges the Las Vegas Realtors and others “conspired to require home sellers to pay the broker representing the buyer of their homes, and to pay an inflated amount” in violation of antitrust laws, according to the complaint.

Samuel Schwartz, an attorney representing Whaley along with Ben Lehavi, told the Review-Journal that real estate agents in Nevada have for years conspired together to create fixed commission rates between 4.5 and 6 percent in a “closed market.”

At the center of the alleged conspiracy is the Buyer Broker Commission Rule, conceived by the NAR , which requires home sellers to use an agent and agree to its non-negotiable commission in order to list a property on the MLS, a private database of home listings, he said.

“The real estate market has evolved into a closed system that limits the access for buyers and sellers and provides those with access to the system, the real estate agents and the brokers the ability to dictate not only prices but also commissions,” Schwartz told the newspaper.

“And then you’ve limited the people who can have access (to the MLS),” he said. “And you’ve left it to those people that have the control to say, ‘Well, you want access, you have to pay this commission, it’s not negotiable.’ And then you’ve actually given the wrong incentives to the buyer.”

The Las Vegas Realtors, a member organization of NAR that represents 17,000 local brokers, deferred to the national trade group for comment.

“The cooperative compensation practice makes efficient, transparent and accessible marketplaces possible,” the National Association of Realtors said in a statement. “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 National Association of Realtors will respond to this complaint in court.”

As NAR’s problems stack up, its members are casting doubt on the group’s reign atop the industry — adding internal pressure that for the first time matches scrutiny from regulators.

— Dana Bartholomew