Plaintiffs have filed a class action suit against the National Association of Realtors (NAR), RE/MAX and some other big names in the real estate industry. If it’s successful, the way that real estate is bought and sold may change — for good.
The lawsuit was filed on behalf of a single homeowner — but will represent anyone who has sold property and paid a broker commission within the last four years in specific geographical areas covered by the Multiple Listing Service (MLS) — including Arizona. The MLS is widely used to advertise properties for sale.
Essentially, the lawsuit alleges that the NAR engages in price-fixing. It’s compensation policies require buyer brokers to demand commissions when listing a home at a fixed rate rather than negotiating their own commission, which could be considerably less. In addition, it encourages buyer brokers to steer potential home buyers toward higher-priced homes in order to get a higher-priced commission in the end.
The lawsuit claims that many home sellers paid thousands more than they should have in fees related to their house sale — without any real option to negotiate for less. Without the NAR’s rules, a seller might have to pay something like three percent to a broker, which is about half what it charged in many areas.
According to the chief executive officer of one buyer’s real estate firm, “This is no garden variety lawsuit.” It has the potential to claim damages of around $54 billion dollars. It would also change the way the entire real estate world operates from this point forward — to the benefit of many home sellers.
Don’t go into a real estate deal unarmed and uninformed. Talk to an experienced attorney in order to protect your interests.