Home buyers can sue brokerages over real estate commissions, US judge rules

By Mike Scarcella

Feb 21 (Reuters) - The National Association of Realtors and several corporate home brokerages must face a proposed class action lawsuit from home buyers who accuse them of conspiring to artificially inflate real estate commissions, a U.S. judge in Chicago has ruled.

U.S. District Judge Andrea Wood on Tuesday declined to dismiss claims that the realtors association, Keller Williams, Re/Max and others violated U.S. antitrust law by pushing up the cost of homes for sale across the country.

The proposed class of home buyers in 35 states including Florida, Nevada, Tennessee and Massachusetts seeks unspecified monetary damages under a combination of antitrust and consumer protection laws.

Wood denied the plaintiffs' request for a nationwide court order that would permanently enjoin the realtors association from crafting the same or similar commission practices as those challenged in the lawsuit.

In a statement, the Chicago-based National Association of Realtors (NAR) said it was disappointed that the judge allowed the buyers’ claims to move forward. The trade association said it was “committed to defending practices that benefit consumers and advance homeownership.”

HomeServices in a statement said Wood found the company “did not play any role in the enactment, enforcement, or implementation of any of the NAR rules challenged in this case​​.”

Brokerage defendants Anywhere, Keller Williams and Re/Max declined to comment or did not immediately respond to a request for one.

Attorneys for the plaintiffs had no immediate comment on the ruling.

The home buyer plaintiffs contend that sellers are inflating home prices to offset the cost of commissions they must pay to the buyers' agents under industry rules and practices implented by the defendants.

U.S. home sellers may pay commissions of upwards of 5% to 6% of the cost of a house. Part of that commission is paid to the broker for the buyer.

NAR and other defendants have been hit with separate antitrust lawsuits by home sellers claiming billions of dollars in damages in connection with the commission fees.

A jury in Missouri last October awarded nearly $1.8 billion in damages for a class of home sellers suing the realtors association, HomeServices and other defendants. The association and brokerages are challenging the verdict.

The case is Mya Batton et al v. The National Association of Realtors et al, U.S. District Court for the Northern District of Illinois, No. 1:21-cv-00430.

Read more:

Justice Department says settlement too lax in real estate commission case

Berkshire’s HomeServices asks US Supreme Court to hear antitrust case

Home brokerage Keller Williams to pay $70 mln in antitrust settlement

Brokerages push to undo $1.8 bln verdict in real estate commissions case

(Reporting by Mike Scarcella)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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