A Class Action Lawsuit Seeks to Eliminate Commissions for Buyers’ Brokers

Should a home seller be required to pay for the buyer’s side of the transaction, especially when the buyer’s expenses include negotiating against the seller?

The alleged conflict of interest is at the heart of a lawsuit brought by lead plaintiff Christopher Moehrl, who argues that if not for rules put in place by the National Association of Realtors and other brokerage groups, commissions in the U.S. would be similar to those in the U.K., where sellers only pay the agent who lists the home, not the agent who helps the buyer make the purchase.

According to Housing Wire, the suit further alleges that the MLS providers conspire with NAR to require sellers to pay buyer’s broker’s fees at inflated rates in violation of anti-trust laws, and that practice has “saddled home sellers with a cost that would be borne by the buyer in a competitive market.”

NAR contests this assertion, claiming that it has no role in determining the buyer broker’s fee.

The NAR filed to dismiss the lawsuit, partly based on the fact that it supports many types of business models for its members, said Rene Galicia, director of MLS engagement for the NAR. “The MLS doesn’t set commission rates. That’s left up to individual brokers and consumers, depending on the transaction,” he said. “Consumers should look at their level of comfort with real estate and what they want to accomplish. It’s highly competitive right now. Lay out your goals and find which broker will meet your needs.”