A judge authorized class action status to the antitrust lawsuit filed by Christopher Moehrl against Anywhere Real Estate Inc., HomeServices of America, Keller Williams, National Association of Realtors and ReMax. The lawsuit was originally filed as a federal antitrust suit in 2019 inferring certain NAR polices violate the Sherman Antitrust Act by requiring Listing Brokers to offer Buyer Brokerages a commission to list properties in their Multiple Listing Service (MLS). This practice greatly increases costs to the Seller. A similar lawsuit which is exclusive to the state of Missouri, known as Sitzer/Burnett, is moving forward as well.
“At issue in this case are the standardized rules promulgated by the NAR and then adopted by Corporate Defendants, which, in turn, enforce those rules against their affiliated brokers throughout the nation,” Judge Andrea R. Wood wrote in her order.
The Moehrl case delineates the following MLS’s as part of its litigation:
The Bright MLS: the metropolitan areas of Baltimore Maryland, Philadelphia Pennsylvania, Richmond Virginia and Washington, D.C.
My Florida Regional MLS: including the metropolitan areas of Tampa, Orlando, and Sarasota.
Five MLSs in the Mid-West that cover the following metropolitan areas: Cleveland Ohio, Columbus Ohio, Detroit Michigan, Milwaukee Wisconsin and Minneapolis Minnesota.
Six MLSs in the Southwest that cover the following metropolitan areas: Austin Texas, Dallas Texas, Houston Texas, Las Vegas Nevada, Phoenix, Arizona and San Antonio Texas.
Three MLSs in the Mountain West that cover the following metropolitan areas: Colorado Springs Colorado, Denver Colorado and Salt Lake City Utah.
Four MLSs in the Southeast that cover the following metropolitan areas: Fort Myers Florida, Miami Florida, Charlotte North Carolina, and Raleigh North Carolina.
How may this impact you? Potentially millions of home sellers will be able to ask for the reimbursement of billions of dollars in commissions paid to buyer agents back as far as 2015 as a result of the class action status. In the United State between 2015 to 2021, approximately 38.65 million homes were sold. The MLS’s delineated in the Moehrl lawsuit facilitated marketing for roughly 40% of those home sales totaling approximately 15.46 million homes. Acknowledging some area home values are significantly higher than others, the following figures are based upon the average home prices for the entire country. Volume of sales from 2015 to 2021 equals approximately $4.2 trillion. For calculation purpose we are assuming a Buyer Brokerage commission equal to 3% of the sale price. 4.2 trillion X 3% = 126 billion.
If Treble damages are awarded (this allows the court to award 3 times actual damages), the potential fallout for all combined parties could be as high as $378 billion. This begets the question following question: Do the named defendants carry enough liability insurance to cover such a large claim, if not this could result in the Bankrupting of some of the most well-known Brokerages in the Real Estate industry today.
There have been alternative Real Estate Brokerage MLS Listing options available for many years. These Brokerages often cater to Builders, For Sale By Owners looking for enhanced marketing exposure services, Investors and myriad of Sellers who want the opportunity to potentially save thousands of dollars in commissions via limited service Brokers. For example: Simple Fee Listings offers Sellers varying levels of ala carte Flat Fee MLS listing services. The Seller reserves the right to sell the property to an unrepresented Buyer paying zero additional commission to anyone. The Seller determines what sum of money, if any, they are offering to a Buyer Brokerage as additional compensation – whether it is zero dollars, a flat dollar amount or a percentage of the sale. This enables the Seller to make their own financial decisions while preserving their right to insist the Buyer pay their own agent if that agent wishes to be compensated for their services.
Here is a more detailed breakdown of the Brokerages involved. Anywhere Real Estate Family of companies includes, but is not limited to Better Homes and Gardens, Cartus, Century 21, Coldwell Banker, Corcoran Group, ERA Real Estate, NRT, & Sotheby’s. HomeServices of America owns Allie Beth Allman & Associates, Berkshire Hathaway HomeServices, HomeServices of Illinois, Long & Foster, Prudential Real Estate, Realty South, and Semonin Real Estate amongst others. Keller Willams, National Association of Realtors and ReMax are also named defendants.
Is this a GAME OVER situation? It will likely be years before we have the final answer to that question.
Respectfully,
Article written & Published by: Joan Elflein, Broker / Ohio Broker Direct
Simple Fee Listings, LLC & its Brokers or Associates assumes no responsibility or liability for any errors or omissions in this blog, we advise all participants engaged in the buying or selling of real estate to enlist the services of a Real Estate Attorney.