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Lawsuit Against NAR Permitted to Proceed as Class Action Case

April 29, 2022 in KCRAR

A Kansas City federal judge granted class certification last week in a case naming the National Association of REALTORS® (NAR), Realogy, Berkshire Hathaway HomeServices of America, RE/MAX and Keller Williams as defendants. 

First filed in 2019, the case will now move forward as a class action lawsuit allowing home sellers across Missouri, Kansas and Illinois to join as plaintiffs. This lawsuit alleges that NAR, “created and implemented anticompetitive rules which require home sellers to pay commission to the broker representing the home buyer.” 

“The complaint centers around an allegation that just isn’t true,” Katie Johnson, NAR General Counsel & Chief Member Experience Officer said after the suit was originally filed. 

In response to the new class action certification, NAR made a statement to HousingWire, stating its disappointment in the decision and its plan to appeal. 

“The pro-competitive, pro-consumer local broker marketplaces serve the best interests of buyers and sellers,” NAR said in the statement. “Local broker marketplaces ensure equity, transparency and market-driven pricing options for the benefit of home buyers and sellers. These marketplaces reduce transaction costs by ensuring, among other things, that a buyer broker and their client understand how much the listing broker will pay the buyer broker for procuring a buyer for the listed property. Local broker marketplaces also level the playing field among brokerages, allowing small brokerages to compete with large ones, and provide for unprecedented competition among brokers, including different service and pricing models.” 

NAR’s Handbook on Multiple Listing Policy and the Code of Ethics and Standard of Practice both state that buyer and seller brokers can negotiate over commissions. 

“The market decides commission rates, and commissions are always negotiable,” NAR states on competition.realtor. “Consumers have the choice of who they want to pay and how they want to pay them. Because of the pro-consumer local MLS broker marketplace model, and options like a success fee, there is unprecedented competition among real estate agents, especially when it comes to the service and commission options available to consumers.” 

On competition.realtor, NAR answers key questions related to this case and explains how the fair competition fostered by the multiple listing system benefits consumers. 

Becky Dyer • April 30, 2022 at 8:27 am

My opinion as a list agent and buyers agents, several whom have sold my listings tear the seller apart for unnecessary request and etc and then goes to closing and collects his/her paycheck from seller .. buyers agents should he paid by the buyer . No common sense in this business anymore. Licensed since 1981 38 full time years . Too much hassle and lies !

Reply

    Eric Best • May 6, 2022 at 10:19 am

    What you seem to not recognize Becky is that the coop commission gives many low income buyers the ability to purchase a house and be represented by a qualified professional during the process. If you force these buyers to pay the buyers side commission many of them will either not buy which will lower the amount of offers these sellers are getting thus lowering how much money they get or these buyers will be represented by the listing agent which means niether side is truly represented, oh and that listing agent will do all the work and likely for the same amount of commission they were getting for just representing the listing side. If the masses went with your logic you would only be hurting the lowest of income earners (which isn’t the deck already stacked against them, the sellers would likely earn less money on selling their house (which totally defeats the purpose) and the listing agent will get to do more work for less money. Not so simple of an argument is it?

    Reply

      Juliana Litteken • May 9, 2022 at 6:36 pm

      I don’t know Betty but looks like she has sold more than 500 properties. My guess is she understands things pretty well and is entitled to her opinion without derision & condescension.

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