Be Represented by a Law Firm That is Well-Established in Eminent Domain Cases

  1. Home
  2.  » 
  3. Real Estate Litigation
  4.  » Copycat commission lawsuits threaten the real estate industry

Copycat commission lawsuits threaten the real estate industry

On Behalf of | Feb 22, 2024 | Real Estate Litigation

Northern California real estate associations, along with the area’s multiple listing service, are the latest targets in a new copycat lawsuit involving real estate professionals. The lawsuit, filed in January 2024, alleges that these associations colluded with one another to inflate real estate commissions.

Blanket compensation to buyer brokers is the issue

This latest real estate litigation involves MetroList Services and nine real estate associations that use the multiple listing service to sell properties. MetroList has a rule similar to listing services affiliated with the National Association of Realtors that requires listing agents to make a blanket offer of compensation to buyers’ brokers when listing a property on the MLS. The complaint calls this practice “anticompetitive broker rules” and says that the named real estate associations restrained trade by requiring their members to pay the brokers representing the buyers of their homes, resulting in inflated commissions. It also alleges that this practice inflated overall commissions in the area, resulting in thousands of dollars in overcharges. The lawsuit seeks class-action status for anyone who paid a buyer broker commission on the sale of residential real estate on MetroList between Jan. 18, 2020 and the present.

Commission lawsuits could change compensation

The new commercial litigation comes on the heels of a verdict in Missouri in November 2023 that found the NAR and two brokerage firms liable for $1.8 billion in damages for conspiring to keep commissions artificially high. Broker commissions aren’t expected to change in the short term, but the long-term outlook isn’t clear with the proliferation of copycat lawsuits.

Not all real estate transactions go smoothly. However, with the proliferation of commission lawsuits, the potential for additional litigation against individual real estate agents looms if a group of buyers believe they have been overcharged when buying or selling a home.