NAR Defends Mandate of Buyer Agent Commissions Against Anti-trust Lawsuit
June 1, 2019 Legal Updates, NAR Updates, MLS Updates
Two recently filed class-action antitrust lawsuits against the National Association of REALTORS® and several major real estate franchisors allege falsely that consumers have no ability to negotiate commissions with real estate professionals, says Katie Johnson, the National Association of REALTORS® General Counsel and Chief Member Experience Officer.
In Moerhl v. National Association of REALTORS®, Realogy Holdings, HomeServices of America, RE/MAX and Keller Williams (and another class action lawsuit with similar claims having Sawbill Strategic, Inc. as the plaintiff), home sellers who listed their properties on several multiple listing services are claiming that NAR’s MLS policies—which require all participants to cooperate with and compensate other participants—is a violation of antitrust law.
“In fact, the commission offered to the buyer’s broker is not at all determined by NAR or the MLS,” says Johnson. “And, contrary to what the class action law firms allege, the commission is subject to negotiation.”
“The MLS has been around for well over 100 years and has contributed to an orderly and efficient marketplace,” says Johnson. “We are going to aggressively defend ourselves, along with the rights that enable home buyers and sellers to continue to have access to a highly efficient market.”
In response to NAR’s motion to dismiss the Moehrl v. NAR lawsuit, the plaintiff’s attorneys this week let the court know they are amending their complaint. Although the case is ongoing, this a sign the class action attorneys recognize the legal viability of our position and are regrouping to try to salvage their baseless case.
This means the court will no longer rule on our motion to dismiss the case and instead wait for the amended complaint. NAR will continue to fight these meritless claims and continue to make it clear the MLS system is pro-competitive and pro-consumer and functions to the benefit of both buyers and sellers. In order to best represent the interests of consumers and our members, we will continue to aggressively defend against this lawsuit.
Here are some key points we believe the plaintiffs have missed about the current way a Multiple Listing Service operates:
- The MLS system works in the best interests of both buyers and sellers, and the way commissions are paid plays a key role in maximizing this benefit.
- The MLS system is pro-competitive and pro-consumer. It works in the best interests of buyers and sellers alike, as it results in a highly efficient residential real estate market. The system yields the maximum number of qualified buyers who may be interested in the sellers’ property.
- Brokers play a crucial role in helping buyers and sellers achieve their goals. As more information has become available through MLS and interactive real estate websites, it is more crucial than ever before to have trained, local brokers available to help consumers sort through it all to arrive at the best possible decisions. In fact, 78 percent of homebuyers agree that their broker was an important source of information for buying a new home.
- Home buyers are very satisfied with their home buying experience and home buyers are brokers’ best referral source. According to our most recent Homebuying Survey, 62 percent of home buyers were very positive about the home buying process, and almost 90 percent would recommend their broker to a family member or friend.
- The allegations by the plaintiffs are false. The allegations by the plaintiffs are simply false. The fact is, when sellers have asked brokers to negotiate, brokers have reduced their fees more than 20 percent of the time.
- Years of judicial precedents have upheld the benefits of the MLS system. Legal precedents have upheld the central tenets of the MLS system, and we’re confident that the courts will once again affirm the pro-consumer, pro-competitive aspects of this system.