The verdict is in — the old way of doing business is over. Join us at Inman Connect New York Jan. 23-25, when together we’ll conquer today’s market challenges and prepare for tomorrow’s opportunities. Defy the market and bet big on your future.
Just over a month after a Missouri jury decided major real estate industry organizations conspired to keep agent commissions high, a group of homesellers in Georgia have filed a similar suit arguing that they too suffered from a conspiracy.
The new antitrust suit was filed Nov. 22, one day before Thanksgiving, in the United States District Court for the Northern District of Georgia. Similar to Sitzer | Burnett, the trial that wrapped up on Halloween in Kansas City, Missouri, this new suit “involves a nationwide conspiracy by and between the National Association of Realtors (NAR) and residential real estate brokerages orchestrated to increase broker compensation at the expense of home sellers,” according to the complaint in the case.
The case specifically takes aim at the practice of having sellers’ agents offer commissions to agents representing buyers. Such a practice was at the heart of Sitzer | Burnett, as well as other cases — several of which have been filed this fall.
“Defendants’ scheme has artificially and anticompetitively maintained commissions of buyer brokers ranging from 2.5 percent to 3.0 percent over many years,” the new complaint alleges.
The suit names two dozen different defendants, many of whom are also defendants in other antitrust cases: NAR, HomeServices of America and its affiliates, Keller Williams, Compass, and others. However, a number of local entities are included as well: Ansley Real Estate, Atlanta Fine Homes, PalmerHouse Properties and others.
Anywhere and RE/MAX are also both named as defendants. Those two companies are defendants in Sitzer | Burnett as well, but filed settlements in that case and others before the recent trial began. Those settlements have since received preliminary approval and, if all goes to plan, will get final approval sometime next year.
Reached for comment, a spokesperson for NAR told Inman in an email Monday that “the cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible.”
“Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation,” the email added. “The National Association of Realtors will respond to this complaint in court.”
HomeServices, Anywhere, Compass, Christie’s International Real Estate and RE/MAX declined to comment. Inman will update this story if and when other defendants in the case weigh in.
Plaintiffs in the new Georgia case include homesellers Janet Phillips, Joseph Hunt, Edith Anne Hunt, Penny Scheetz and Benjamin Aune, as well as Parkwood Living LLC, a company that according to the complaint sold several properties in Georgia.
Like other antitrust commission cases, the new Georgia suit is seeking class-action status — in this case on behalf of all homesellers who listed their properties on one of the state’s multiple listing services and who had to pay a buyer broker commission between Nov. 22, 2019, and the present.
Though the case is just days old and thus far from any outcome, it is part of a tsunami of cases that challenge the way real estate agents get paid. Some of those cases, including Sitzer | Burnett and the similar Moehrl suit, have been meandering their way through the courts for years. But in the wake of the Sitzer verdict, consumers filed at least five other so-called copycat cases. They include Gibson, Batton 2, Burton, March, and QJ Team. The cases are typically named for their lead plaintiffs, meaning the new suit in Georgia would be known as Phillips.
Despite the verdict in Sitzer | Burnett, it’s also still unclear how disruptive the legal fallout from these various cases will be. During recent earnings reports, numerous CEOs of big companies downplayed the impact of the lawsuits, in some cases arguing that commissions have remained stable even in areas where rules about sharing compensation have disappeared.
On the other hand, others in the industry have argued that the cases could exert pressure on commissions and potentially even reduce NAR membership by 1 million.
In Sitzer | Burnett, NAR and other defendants in the case recently hired high-profile attorneys and vowed to appeal the verdict.
The likely outcome for now is years of additional litigation. But in the meantime, the plaintiffs in the new Phillips case are, like those in other suits, asking for, among other things, a jury trial and unspecified damages.
Read the full complaint here:
Update: This story was updated after publication with defendants’ responses to Inman’s requests for comment.
