Antitrust lawsuits over broker commissions pile up

Pressure is mounting on some of the biggest residential players as antitrust lawsuits over broker commissions pile up.

The latest hit the books in Illinois last week, just days after a Kansas City jury found the National Association of Realtors, Keller Williams and HomeServices of America guilty of conspiring to drive up costs charged to homesellers.

Seven homebuyers, led by Mya Batton, are suing Compass, Redfin, Douglas Elliman, eXp and three other brokerages over similar accusations — this time centering homebuyers instead of sellers, Inman first reported.

“Defendants’ unlawful, anticompetitive conduct causes America’s home buyers to pay inflated commissions for broker services they misrepresent as free, to pay inflated prices for the homes they purchase, and to receive reduced quality broker services,” the complaint states.

At the center of the case is NAR’s Clear Cooperation Policy, which requires agents to offer buyer’s agents compensation in exchange for listing properties on a Realtor-controlled MLS. The complaint argues that the rule pressures sellers to offer a high commission to prevent buyer’s agents from steering their clients to homes where they could take home a higher cut.

The lawsuit joins two others pending in Illinois and one in Missouri, where a jury in the Sitzer/Burnett trial last month awarded the plaintiffs $1.78 billion in damages.

Shortly after the verdict in that case, the plaintiff’s attorney, Michael Ketchmark, filed a nearly identical lawsuit against NAR and the same brokerages named in the Batton suit.

The series of new suits isn’t likely to stop anytime soon, targeting different markets bound by the nationwide policies, according to Daniel Francis, a New York University law professor and the former deputy commissioner of the Federal Trade Commission’s Bureau of Competition.

Also in Illinois is another lawsuit known as Moehrl, which names NAR, Keller Williams and HomeServices of America as defendants. The trial for that case is scheduled to start early next year, and the potential damages are estimated to be nearly $40 billion.

The Batton lawsuit filed last week is the second in the district under the same name. The first was filed by Judah Leeder in January 2021 and amended in July 2022 with Batton as the lead plaintiff. Motions to dismiss the first Batton case are pending.

— Sheridan Wall