Chicago Brokerage Baird & Warner Sued Over Commissions

Another lawsuit spawning from the Sitzer/Burnett verdict has been filed against Chicago’s second-largest real estate brokerage.

The lawsuit, filed in Cook County Circuit Court on Feb. 22 by Mary Maslanka and David Freifeld, accuses Baird & Warner of participating in a broader industry conspiracy. It alleges that the brokerage, under the leadership of fifth-generation CEO Steve Baird, plays a significant role in perpetuating practices that stifle price competition among real estate brokers, Crain’s reported.

Central to the case is the longstanding industry practice, sanctioned by the National Association of Realtors, of shared commissions. This practice typically entails sellers paying out a percentage of the sale price to their agent, who then splits it with the buyers’ agent. Critics argue that this standard amounts to illegal price-fixing.

“We’ll vigorously defend ourselves against any accusation of collusion,” Laura Ellis, Baird & Warner’s president of residential sales, told the outlet. “We believe in transparency to the consumer, and we’ve demonstrated it.”

The Baird & Warner lawsuit mirrors similar litigation against other industry giants, including Chicago-based @properties Christie’s International Real Estate. These cases have surged following the landmark Sitzer/Burnett verdict, in which the NAR and other national brokerages were found liable of collusion, resulting in a $1.78 billion penalty.

The aftermath of the Kansas City ruling has triggered a wave of copycat lawsuits across the nation, including Manhattan, the San Francisco Bay Area, North Carolina and Atlanta.

The plaintiffs’ attorneys contend that the industry’s commission-sharing standard impedes competition and inflates costs for both homebuyers and sellers. They advocate for a fundamental shift, proposing that buyers pay their agents independently.

Despite the legal onslaught, Baird & Warner remains a stalwart in the Chicago real estate landscape. The firm, founded in 1855, generated $6.3 billion in home sales in 2022, the outlet reported.

—Quinn Donoghue