As you are likely aware, in April, a federal judge in Missouri granted class certification in the Sitzer/Burnett class action lawsuit, in which plaintiffs are raising questions about how commissions are paid. This decision in no way reflects on the actual or perceived merits of the plaintiff's claims. The ruling was procedural in what is yet to be a lengthy process and now allows others who have allegedly been affected to join the litigation as plaintiffs.
Sometime this summer, as is common and expected, class action attorneys will begin to notify members of the class of their right to opt out, even before the validity of the case has been decided. The message of the notices is this: The Sitzer/Burnett v. NAR lawsuit may have an impact on the rights of anyone who recently sold a home in or near Missouri using a real estate agent and paid a commission to the buyer's agent. Notices are typically distributed through a range of communications, including direct mailers, emails, paid advertisements and press stories.
The National Association of REALTORS® continues to get ahead of such notices with proactive reputational communications. For example, last month Leadership Team members participated in a television media tour about how to navigate a tough housing market. A panel on NAR's efforts in equity is planned with a conference of journalists this summer. We also have ongoing updates to the competition.realtor website, where members, media and influencers look, as well as messaging in various media stories.
That said, it's important to remember that consumers often disregard these class action notices since there is no action for them to take unless they opt out of the class, which is rare. Therefore, we want to calibrate our response so as to avoid unnecessarily drawing more attention to the issue.
Should you or members receive questions from consumers, we've created a simple consumer website specific to these class action cases. It's realestatecommissionfacts.com. You can also tell them:
- The question in the case of Sitzer/Burnett v. NAR is why brokers representing home sellers often pay the commission of brokers representing home buyers. This practice underpins local broker marketplaces where brokers compile centralized listings of all properties for sale and invite other brokers in finding a buyer.
- The reason this practice has worked so well for so long is because it provides the greatest economic benefit for both buyers and sellers, creates greater access and equity for buyers—including first-time and low- to middle-income buyers—and enables small business brokers to compete with larger brokers. From 2010 to 2020, this market has enabled 6.3 million more people to realize the American dream of homeownership, and helped homeowners build $8.2 trillion of housing wealth.