Texas Real Estate Associations Tight-Lipped Following Lawsuit

A lawsuit targeting over two dozen real estate professional organizations and brokerages in the latest offshoot of the landmark Sitzer/Burnett verdict has Texas real estate buzzing.

Just don’t expect to hear much for the record from the local trade associations.

The plaintiffs, Texas-based homebuilder QJ Team and holding company Five Points Holdings, are contesting the common industry practice of sellers’ agents providing compensation to buyers’ agents in exchange for listing properties on MLS. Their lawsuit alleges that such practices breach antitrust laws and are the result of a covert collaboration, characterized as a “concealed conspiracy.”

Among the defendants are the Texas Association of Realtors, Houston Association of Realtors, Austin Board of Realtors, San Antonio Board of Realtors and MetroTex Association of Realtors. Well-known firms including Ebby Halliday, Greenwood King Properties, JPAR Real Estate and Keller Williams, along with a slew of its associated teams, are also named in the lawsuit.

Individual brokers who are talking aren’t necessarily running scared.

“What I’ve seen of the case and claims made by the plaintiffs is pretty weak,” said Ben Caballero, owner of HomesUSA, which is not named in the lawsuit. “Things like this can create a life of their own and get public opinion wrapped up in it.”

While those named in the suit have remained tight-lipped, murmurs around the industry indicate firms have brokers holed up in meeting rooms explaining the details. Agents say they’ve been discussing the case with their clients, in attempts to get ahead of the news, as they await guidance from their association boards.

The Houston Association of Realtors recently acknowledged the lawsuit but kept its comments to its more than 51,000 members limited in an email obtained by The Real Deal. The email describes the Texas suit as one of several “copycat lawsuits” filed in the wake of the $1.78 Sitzer/Burnett verdict, handed down in Kansas City, Missouri, on Oct. 31.

“There will be a lot we cannot say or comment on,” the email reads. “This will feel frustrating – it is for us, too. Know and trust that we will be as transparent as possible and share whatever updates we can with you, as soon as we can.”

HAR declined to comment on the lawsuit, saying it is still reviewing the details.

Austin Board Realtors CEO Emily Chenevert declined to comment on pending litigation.

“We will continue to focus our efforts on serving our 20,000-member organization while advocating for the rights of property owners and homebuyers in Central Texas,” she said.

Other remarks from industry insiders described the lawsuit in harsher terms, suggesting a growing enmity toward spate of legal attempts to upend the industry.

Similar lawsuits have been filed in New York, South Carolina and Illinois. Some brokers have taken to The Real Deal’s Instagram page to speak out against the suits.

“I bet they have six percent commission costs baked into their pro forma and still made the margins work. Give me a break,” posted David Burck, a Palm Beach-based Compass agent.

“Once you agree to pay a listing agent a commission, which is always negotiable, what do they care if the listing agent shares it with the buyer agent to bring qualified buyers to sell the property,” wrote South Florida Compass agent Orlando Alpizar.

The potential this lawsuit has to reshape the Texas real estate market is at the core of the fallout, leading some to lean into conspiracies about a future outcome.

“Judges, juries and attorneys? They sell homes too, you know,” Caballero said. “It’s almost like a union that bands together and forces change. I see the potential here that they will band together and force a reduction in the cost of selling the home.”