LOS ANGELES — A series of court challenges seek to upend longstanding real estate industry practices that determine the commissions agents receive on the sale of a home — and who foots the bill.
“This matter is not close to being final as we will appeal the jury’s verdict,” Mantill Williams, a spokesman for the NAR, said in a statement. “In the interim, we will ask the court to reduce the damages awarded by the jury.”But already the NAR and several real estate brokerages are facing another lawsuit over agent commission rules. Fresh off winning the verdict in the 2019 case, the lawyers filed a new class-action lawsuit in the U.S.
If NAR’s “Mandatory Offer of Compensation Rule” were not in place, then homebuyers would foot the bill for their agent's commission, which would open the door for competition — and lower commissions — among agents vying to represent a homebuyer, the plaintiffs contend. In July, the independent Bright MLS, which covers some states in the eastern part of the country, changed the rules so that it's OK for a home listed in that region's MLS to not include an offer of agent compensation at all. That still falls within NAR's guidelines.“Today, what effectively happens is the buyer agent's commissions are added to the sale price of the house, inflating the sale price,” said Stephen Brobeck, senior fellow at the Consumer Federation of America.
He said he doesn’t hear many raising concerns about agent commissions, noting that home sellers who wanted to avoid them just go the for-sale-by-owner route.