Major agent commissions suit headed to trial
Judge denied motions by NAR, brokerages for summary judgment
An agent commissions suit that could have major ramifications for the residential real estate industry is headed to trial.
U.S. District Court Judge Stephen Bough dismissed motions for summary judgment by the National Association of Realtors, Anywhere Real Estate, Keller Williams, RE/MAX and HomeServices of America, Inman reported. If the judge had granted the motions, the lawsuit from homeseller plaintiffs Joshua Sitzer and Amy Winger would have ended in favor of the defendants.
The plaintiffs filed the lawsuit against NAR, Anywhere (then known as Realogy) and others more than three years ago, claiming that sharing commissions between listing and buyer brokers violated the Sherman Antitrust Act. If the plaintiffs succeed, homesellers may be able to seek reimbursement on commissions paid to buyer agents.
The plaintiffs have an issue with the commissions model. They are aiming in the suit for homebuyers to pay their brokers directly instead of having listing brokers pay buyer brokers from what the seller pays listing brokers. According to the lawsuit, the model inflates costs for sellers.
A judge earlier this year granted class-action certification for the lawsuit, which enabled the plaintiffs to represent any seller who paid a broker commission for a residential deal across four Missouri MLSs, dating back to April 2014.
The commissions paid to buyer agents in the state since that time total more than $1 billion, creating the possibility of a massive fallout for the industry. Treble damages could bring the total amount of damages to $4 billion.
Defendants typically file for summary judgments when they believe the material facts of a case to be beyond dispute. Bough said in a decision he doesn’t see things that way, claiming there are several disputes involving material facts in the case, including if the seller is the direct buyer of the buyer-broker’s commission.
A spokesperson for NAR expressed confidence the defendants would prevail in the lawsuit. The brokerages involved in the case did not immediately comment on the latest development in the case.
A trial was initially scheduled to start in February 2023, but was pushed last week at Anywhere’s request, despite objections raised from NAR. A three-week jury trial is now scheduled to start on Oct. 16.
— Holden Walter-Warner