fbpx

National Association of Realtors Anti-Competitive Rules Class Action

This class action involves the National Association of Realtors (NAR), The San Francisco Association of Realtors (SFAR), Greater San Diego Association of Realtors (SDAR), and a number of other real-estate-related entities. The complaint alleges that these entities have engaged in anti-competitive conduct that has resulted in “artificially inflated commissions” and higher prices paid by home buyers.

The class for this action is all persons who, between December 1, 1996 and the present, bought residential real estate that was listed on an NAR MLS.

The NAR has 1.4 million members, to which it gives benefits, like access to a multiple listing services (MLSs); it also lobbies the federal and state governments on their behalf. In addition, it sets up and enforces rules, policies, and practices by which these members do business. Members must agree to follow these rules, policies, and practices, or they will lose their memberships, including access to the MLSs.

What is at issue in this case? The complaint alleges that NAR and realtors generally present home buyer’s agents as being “free,” when in reality it sets a commission for them and does not permit that commission to be lowered.

Its rules “include a requirement that sellers set aside a portion of the purchase price for buyer agent commissions, prohibitions on modifying the commission, and permission to filter listings by commission….” All this allows NAR and its members “to maintain buyer agent commissions at supra-competitive levels unrelated to the services provided, steer home buyers away from lower commission homes, and drive out discounters.”

In general, seller’s brokers get 3% of the price of the home; buyer’s agents are also supposed to be paid 3%. Those who might otherwise be willing to negotiate for less are discouraged from doing so because they are afraid their properties will not be shown by buyer’s agents. The commissions are taken out of the home prices, so that buyers are often not aware of them.

NAR’s Handbook on Multiple Listing Policy says affiliated realtor associations and MLSs “must conform their governing documents to the mandatory MLS policies established by [NAR’s] Board of Directors to ensure continued status as member boards and to ensure coverage under the master professional liability insurance program.”

Realtors depend heavily on their local MLS for listings. The complaint alleges, “In most areas, the local MLS provides the most up-to-date, accurate, and comprehensive compilation of the area’s home listings.” They therefore are required to go along with NAR’s rules and policies.

The anti-competitive behavior of NAR and the other realtor entities, the complaint alleges, forces sellers to keep home prices higher than they would be if the sellers could negotiate commissions with buyer’s agents.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

National Association of Realtors Anti-Competitive Rules Complaint

March 19, 2021

This class action involves the National Association of Realtors (NAR), The San Francisco Association of Realtors (SFAR), Greater San Diego Association of Realtors (SDAR), and a number of other real-estate-related entities. The complaint alleges that these entities have engaged in anti-competitive conduct that has resulted in “artificially inflated commissions” and higher prices paid by home buyers.

National Association of Realtors Anti-Competitive Rules Complaint

Case Event History

National Association of Realtors Anti-Competitive Rules Complaint

March 19, 2021

This class action involves the National Association of Realtors (NAR), The San Francisco Association of Realtors (SFAR), Greater San Diego Association of Realtors (SDAR), and a number of other real-estate-related entities. The complaint alleges that these entities have engaged in anti-competitive conduct that has resulted in “artificially inflated commissions” and higher prices paid by home buyers.

National Association of Realtors Anti-Competitive Rules Complaint
Tags: Anticompetitive Actions, Antitrust, Real Estate