Realtors group urges end to home sellers’ $13 bln commission lawsuit

Re/Max Holdings

20/12/2023 19:23

By Mike Scarcella
       Dec 20 (Reuters) - The National Association of Realtors
and several major residential brokerages have asked a U.S. judge
to throw out a class-action lawsuit from home sellers claiming
more than $13 billion in damages.
    The association and brokerage companies, including Keller
Williams and units of Warren Buffett's Berkshire Hathaway
 BRKa.N , asked U.S. District Judge Andrea Wood in Chicago to
end the case in a series of court filings seeking summary
judgment on Tuesday.
    The home sellers claim the defendants conspired to
artificially inflate the commission that sellers pay to agents
who represent buyers, an amount known as the "buyer broker
commission rule." 
    The sellers contend the rule puts pressure on them to offer
higher commissions than they otherwise would, in order to
minimize buyer agents from steering their clients to a house
that has a larger commission tied its sale.  
    Home sellers in the United States can pay commissions to
buyers' brokers of 5% to 6% of the value of a house.
    Wood in March said the 2019 lawsuit could proceed as a class
action covering home sellers in multiple states, exposing the
association and industry brokers to potentially higher damages.
    The antitrust case is one of the largest facing the
residential real estate market, with claims that parallel
another case in Kansas City where a federal jury in October
awarded Missouri-area home sellers nearly $1.8 billion in
damages for overpaying commissions.
    The Illinois case includes thousands of home sellers who
paid a commission between March 2015 and December 2020 in states
including Texas, Florida, New Jersey, Ohio, Pennsylvania,
Virginia, North Carolina and Colorado.
    “Listing brokers make offers of compensation to buyer
brokers because of market forces, and not anything NAR has
done,” the Chicago-based National Association of Realtors, which
promulgates industry rules, said in Tuesday’s filing. “State
real estate laws have long allowed that exact practice.”
    Keller Williams and Berkshire Hathaway’s HomeServices also
denied the home sellers’ claims and asked for a ruling ending
the case before trial.
    Two other defendants, Re/Max  RMAX.N  and Anywhere Real
Estate  HOUS.N , have agreed to settlements to resolve claims
against them in both the Illinois and Missouri cases. Neither
company admitted or denied liability.
    A status hearing in the Illinois case is scheduled for Jan.
31.
    
    The case is Moehrl et al v. The National Association of
Realtors et al, U.S. District Court for the Northern District of
Illinois, No. 1:19-cv-01610.
    For plaintiffs: Kit Pierson of Cohen Milstein Sellers &
Toll; Steve Berman of Hagens Berman Sobol Shapiro; and Marc
Seltzer of Susman Godfrey
    For National Association of Realtors: Ethan Glass and Dee
Bansal of Cooley; Jack Bierig and Suzanne Wahl of ArentFox
Schiff
    For Home Services: Robert MacGill of MacGill PC; Jay Varon
of Foley & Lardner
    For Keller Williams: Timothy Ray and David Kully of Holland
& Knight
    
    Read more:
    California home sellers sue brokerages, trade groups over
commissions
    Appellate veterans to defend broker fees after sellers win
$1.8 bln verdict
    Zillow rival seeks US court retrial in home-listing lawsuit
    U.S. real estate brokerages must face home sellers’ class
action over commissions

 (Reporting by Mike Scarcella)
 ((Mike.Scarcella@thomsonreuters.com;))