Class Action Status Granted for Lawsuit Against Major Real Estate Groups

On March 29, 2023, a federal judge granted class-action status to a group of past home sellers accusing the National Association of Realtors (NAR) and several brokerages of conspiracy to inflate their commission rates.

Brokerages Keller Williams, Anywhere, and RE/MAX, as well as the NAR, are accused of running a system that pressures sellers to offer high commissions to buyers’ brokers.

The plaintiffs seek more than $13 billion in damages, a number that may grow as separate classes of current and future home sellers are added to additional class action suits.

Sellers who paid a commission between March 2015 and December 2020 in a handful of states across the nation are eligible for participation in the lawsuit. Participating states include North Carolina, Michigan, Wisconsin, Arizona, Utah, and others.

In her ruling, the judge indicated that each class could reach thousands of participants. As of the date of the ruling, it was unclear when the trial stage might begin. The judge’s order does not indicate approval of the allegations from the plaintiffs, which lawyers will contest at a later date.

A class-action lawsuit can enable plaintiffs to reach their day in court in a more cost-effective manner than filing dozens or even thousands of individual cases. An individual may not have the resources to conduct a personal lawsuit but may join a class-action lawsuit more easily.

NAR released a statement after the ruling indicating they had complete confidence in their current practices and noted that their methods save time and money during the sales process.

A spokesperson for NAR suggested their processes help increase the number of buyers available when a seller makes their house available on a multiple listing service (MLS). More buyers mean greater competition and higher sales prices. When pressed for comment by a reporter for Reuters, other participants in the lawsuit declined to comment.

This class-action lawsuit isn’t the only legal challenge currently faced by NAR and the brokerages. In late 2022, a judge denied multiple motions from the brokerages and NAR for a summary judgment on a separate yet related case.

Plaintiffs in that lawsuit claim that sharing commissions between listing brokers and buyer brokers is a violation of the Sherman Antitrust Act. A trial for that case was initially slated for March, but one of the defendants, brokerage Anywhere, requested a postponement, which pushed the trial to October.