Class-Action Lawsuit Filed Against NAR

The lawsuit filed by home seller Christopher Moehrl in March of this year is on its way to making traditional home buying and selling a thing of the past. The NAR, 20 of the largest MLS’s across the country and 4 of the largest real estate broker franchises, are being accused of violating federal antitrust laws by conspiring to require home sellers to pay buyer commissions at an inflated amount. The end goal of said plaintiff is to make selling a home more affordable by changing how agents share commissions on local MLS’s.

NAR’s “Buyer Broker Commission Rule”, “requires all brokers to make a blanket, non-negotiable offer of buyer broker compensation” in order to participate in MLS. Without using MLS brokers cannot effectively market their properties and sellers are paying both brokers commissions which results in an ineffective and anti-competitive market.

There are 2 problems with the current archaic system. First, since the buyer’s agent will get ½ of the commission, it may induce them to cherry-pick listings to show only those properties with the highest commissions. The second problem is that the commissions presume full-service work on the parts of both agents. What happens if the buyer knows what property they want? That greatly reduces the workload of the buying agent, yet they still receive the same commission for less work.

What does this all mean for the future of Real Estate? This consequential lawsuit (if the plaintiff wins) will change the percentages that come with Real Estate transactions, making a big impact in the Real Estate Industry. With the opening of MLS to something that provides for competition, it will swing the doors wide open for internet brokerages such as REDFIN and ZILLOW. With more transactions happening virtually, salespersons and brokers will have to market themselves in new ways. The days of print and tv ads are dwindling and social media presence will be essential. We can help guide you in making yourself an invaluable player online with our Social Media Marketing Course! Learn the ins and outs of social media marketing from experts that work in both social media and real estate. We provide you with tools and tricks to upgrade your personal and professional profiles, drive leads, increase your network and business!