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What’s the latest with the lawsuits with the realtors?
There are two key lawsuits involving real estate commissions and the National Association of Realtors (NAR) that could significantly impact the industry:
1) The Sitzer case in Missouri: In late October 2023, a jury ruled in favor of the plaintiffs, awarding $1.8 billion in damages. The plaintiffs argued that NAR and other brokerage firms engaged in collusion to inflate commissions, violating antitrust laws NAR is expected to appeal the ruling.
2) The March vs Real Estate Board of New York et al. case: Filed in November 2023 in the Southern District of New York, this class action lawsuit alleges collusion to artificially inflate commissions under the traditional industry rule that mandates the seller pays a 5-6% commission to the seller’s broker, who then splits it evenly with the buyer’s broker
The lawsuit claims this practice violates antitrust laws.
If the Sitzer ruling stands and similar cases rule in favor of the plaintiffs, it could prompt a significant transformation in how residential real estate commissions are negotiated and paid
The U.S. Justice Department, a longstanding critic of NAR’s alleged antitrust behavior, is closely monitoring these developments
In response, the Real Estate Board of New York (REBNY) has implemented new rules effective January 2024 that prohibit listing brokers from making or paying compensation offers to buy-side brokers, potentially aligning with practices seen in some international markets where commissions are lower
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