REAL ESTATE COMMISSIONS

Moehrl v. National Association of Realtors, et al., Civil Action No. 1:19-cv-01610 (U.S. District Court for the Northern District of Illinois)

This antitrust class action alleges that the National Association of Realtors (“NAR”) and the four largest real estate broker franchisors (Realogy Holdings Corp., HomeServices of America, Inc., RE/MAX Holdings, Inc., and Keller Williams Realty, Inc.) conspired to require home sellers to pay the broker representing the buyer of their homes, and to pay at an inflated amount.

The alleged conspiracy centers around Defendants’ adoption and implementation of a mandatory rule that requires all brokers to make a blanket, non-negotiable offer to compensate buyer brokers when listing a property on a Multiple Listing Service (“MLS”).

The conspiracy has saddled home sellers with a cost that would be borne by the buyer in a competitive market. Moreover, because most buyer brokers will not show homes to their clients when the seller offers a low buyer broker commission, or will show homes with higher commission offers first, sellers are incentivized when making the required blanket, non-negotiable offer to procure the buyer brokers’ cooperation by offering a high commission.

The conspiracy ensures that price competition among buyer brokers is restrained because the person retaining the buyer broker, the buyer, does not negotiate or pay his or her broker’s commission. In addition, the seller’s inflated commission offer cannot be reduced by buyers or their brokers, as Defendants also prohibit buyer brokers from making home purchase offers contingent on the reduction of the buyer broker commission.

The lawsuit was filed on behalf of a class of home sellers who paid a broker commission during the last four years in connection with the sale of residential real estate listed on one of 20 specified MLSs.  Those MLSs include:

  • The Bright MLS (including the metropolitan areas of Baltimore, Maryland; Philadelphia, Pennsylvania; Richmond, Virginia; Washington, D.C.);
  • My Florida Regional MLS (including the metropolitan areas of Tampa, Orlando, and Sarasota);
  • The five MLSs in the Mid-West that cover the following metropolitan areas: Cleveland, Ohio; Columbus, Ohio; Detroit, Michigan; Milwaukee, Wisconsin; Minneapolis, Minnesota;
  • The six MLSs in the Southwest that cover the following metropolitan areas: Austin, Texas; Dallas, Texas; Houston, Texas; Las Vegas, Nevada; Phoenix, Arizona; San Antonio Texas;
  • The three MLSs in the Mountain West that cover the following metropolitan areas: Colorado Springs, Colorado; Denver, Colorado; Salt Lake City, Utah;
  • The four MLSs in the Southeast that cover the following metropolitan areas: Fort Myers, Florida; Miami, Florida; Charlotte, North Carolina; and Raleigh, North Carolina.

Plaintiffs in this case are represented by attorneys at Handley Farah & Anderson, Cohen Milstein Sellers & Toll, Hagens Berman, Susman Godfrey, Justice Catalyst Law, Wright Marsh & Levy and Teske Katz Kitzer & Rochel.

The complaint is available HERE.

If you have any questions concerning this case, please contact George Farah, Esq. at 212-477-8090 or [email protected].

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