This article is adapted from an update posted on Wednesday on The Hub by NAR’s General Counsel and Chief Member Experience Officer Katie Johnson.
Three years ago, in March 2019, the National Association of REALTORS® and four corporate defendants were sued in class-action lawsuits filed in Missouri and Illinois alleging that home sellers have been damaged because their listing broker compensates the buyer’s representative. These lawsuits claim that various NAR rules and members’ adherence to those rules have led to artificially fixed and inflated commissions being paid to real estate professionals.
Class-action litigation is long and arduous, and NAR has been keeping you and your associations updated on relevant milestones as they have transpired over the years. NAR has also been asking you to do what you can to help the association prevail in the court of public opinion. Now it is time for another update and another ask.
Last Friday, a federal judge in Missouri granted class certification. This is not a victory for the plaintiffs and does not change the facts of the case. The ruling was only procedural and now allows others who have allegedly been impacted to join the litigation as plaintiffs. The process is expected to be lengthy before the case is fully resolved.
NAR is extremely disappointed in the decision, believes it was wrongly decided, and plans to appeal. NAR continues to believe the pro-competitive, pro-consumer local broker marketplaces serve the best interests of buyers and sellers. Sellers making offers of compensation to buyer brokers also gives all home buyers a better shot at affording a home and professional representation. It’s only the free market that organically establishes commission costs within local real estate markets based on service, consumer preference, and what the market can bear.
This decision does not require any action or comments on the part of members; NAR will keep you informed of any notable litigation milestones. But there is something you can do to help the association prevail in the court of public opinion. Please review the new competition.realtor website, which provides a comprehensive overview of how REALTORS® and the local MLS broker marketplaces benefit consumers.
- Use this information to tell your customers the value you bring to the transaction, what they can expect from your services, and how you will be compensated.
- Use this information to start an education campaign or publish articles (like this one) in your local media outlets.
- Use this information to show why the American real estate system that honors cooperation amongst professionals serves the best interest of home buyers and sellers alike.
The page will continually be updated with new developments, information, and materials, so we want members to consider it their go-to resource. In addition, we highly encourage the continued use of Buyer Representation Agreements in order to formalize your professional working relationship with clients as well as detail what services consumers are entitled to and what the buyer agent expects from their client in return.
In Other Antitrust Litigation News
NAR received a disappointing opinion this week from the 9th Circuit Court of Appeals reversing a lower court's decision granting our motion to dismiss a lawsuit challenging the Clear Cooperation Policy. This too only addresses a procedural issue in the litigation and does not address the merits of the underlying challenge. While we are disappointed in this decision, we will continue to defend the lawsuit, as we firmly believe that the Clear Cooperation Policy advances equal opportunity in housing by ensuring listings are widely available and accessible to all. Without the protections from the CCP, consumers would be disadvantaged because agents could refuse to give them or their representatives access to those listings. We look forward to the next stage of this case, in which we will show the CCP is pro-competitive, pro-consumer, and consistent with all laws and regulations.
It's been quite a week in litigation to be sure. As we look forward to the future, let us remember to take time each day to tell the world who we are.