2023 Class Action Lawsuits: Challenging Buyer Agent Fees

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What the Potential $5 Billion Realtor Class Action Lawsuits Mean for Homebuyers and Sellers and the Future of Residential Real Estate

Recently, most homebuyer clients have asked our Exclusive Buyer's Agents about the groundbreaking class action lawsuits of 2023 dealing with the controversial topic of buyer agent fees in real estate transactions, which could profoundly change the face of real estate and serve as a source of heated debate between stakeholders. Here is a brief outline of some of the major cases in play.

Sitzer/Burnett Lawsuit: A Watershed Moment

Verdict: A federal jury awarded home seller plaintiffs $1.75 billion in an antitrust case; thus, the judge could award triple damages totaling over $5 billion.

Current Status: Final judgment expected in spring 2024.

Key Aspects:

  • The plaintiffs claimed that NAR and Big Brokerage violated antitrust laws by increasing commissions.

  • Keller Williams and HomeServices of America have filed motions to set aside the verdict, again calling for summary judgment.

  • Anywhere Real Estate and RE/MAX have reached settlement agreements before trial, awaiting final approval from U.S. District Court Judge Stephen Bough on whether or not they are fair and reasonable resolutions.

Moehrl Lawsuit: Shaping Class Action Landscape

Status: Class action, trial set to begin in 2024.

Claim: Alleges violation of the Sherman Antitrust Act by increasing seller costs related to commission sharing.

Key Aspects:

  • In March 2023, class-action status was granted, allowing this lawsuit to proceed to trial.

  • This lawsuit focuses on sellers who listed their properties through certain MLSs.

Gibson Lawsuit: Post-Sitzer/Burnett Filing

Status: Filed.

Claim: Alleges seven defendants conspired to inflate real estate agent commissions in Missouri.

Key Aspects:

  • It happened just after the Sitzer/Burnett decision, implying that there would be a domino effect within industry circles.

  • It seeks consolidation with other copycat lawsuits filed in the aftermath of Sitzer/Burnett.

  • Batton 1 and 2 Lawsuits: Shifting Focus to Homebuyers

Status: Batton 1 is pending, and Batton 2 is filed.

Claim: Plaintiffs, homebuyers, allege inflated costs due to the cooperative compensation rule.

Key Aspects:

  • This case looks from the homebuyer's perspective, which is uncommon in such commission lawsuits.

  • It seeks nationwide class certification (Batton 2), suggesting a broad scope.

March Lawsuit: Targeting Commission Fee Rules

Status: Filed.

Claim: Alleges violation of antitrust laws related to commission fees, targeting REBNY and other real estate companies in Manhattan.

Key Aspects:

  • Filed in November 2023 addressing specific rules governing commission fees.

  • Part of the wave of lawsuits challenging industry practices across different jurisdictions.

The Landscape of Additional Lawsuits

Apart from these significant lawsuits, there are numerous others (Burton, Nosalek, DOJ v. NAR, QJ Team, Deits vs. Rocket Mortgage, Phillips, Spring Way, Parker, Grace, Martin, Umpa, Tuccori, Friedman, Masiello, Whaley, Fierro) that reflect various cases against alleged competition infringing behavior by real estate industry players.

Our Expertise in Navigating Industry Shifts

As our Buyer's Edge - BuyersAgent.com team takes you through the ever-changing world of real estate brought about by these cases, we shall be on the frontlines, giving relevant information about developments in these areas. We understand how complex these legal changes can be; thus, we prepare our clients for future fundamental property business law changes.

Contact us for updates on recent commentaries concerning the class action suits mentioned above and their influence on the housing market. Also, feel free to contact us to learn more about how these current litigations may impact your investment in the real estate market.

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