On March 29, a federal judge in Illinois granted class certification in litigation related to how commissions are paid (Christopher Moehrl v. The National Association of REALTORS®). While we are disappointed in the decision, it's still very early in the legal proceedings and we expect to ultimately prevail.
As you know, pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers.
The practice of the listing broker paying the buyer broker's compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers.
The Impact on Homebuyers
For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people. In fact, the U.S. model of independent, local broker marketplaces is widely considered the best value and most efficient model in the world, with no hidden or extra costs and with more complete, verified information compared to other countries.
What Does the Class Certification Mean?
What this means for the litigation: this is not a victory for the plaintiffs and does not change the facts of the case. The ruling was only procedural and now allows others who have allegedly been impacted to join the litigation as plaintiffs. It is expected that it will be a lengthy process before the case is fully resolved.
What this means for you: this decision does not require any action or comments on the part of members. NAR will keep us informed of any notable litigation milestones and reach out to associations in markets affected by the litigation ahead of any consumer notifications, which will not be for many months at the earliest.
Mainstreet REALTORS® can access a free Inman subscription as a member benefit. Access your free subscription here.
What Can You Do?
Click on the links below to better familiarize yourself with the relationship between REALTORS® and local MLS, as well as some reasons why buyers and sellers should utilize the skills of REALTORS®.
- Competition.Realtor - provides a comprehensive overview of how REALTORS® and the local MLS broker marketplaces benefit consumers
- NAR inforgraphics - three new infographics about the benefits of buying a home, selling a home and working with a REALTOR®.
Additionally, you are encouraged the continued use of buyer representation agreements in order to formalize a working relationship with clients and detailing what services consumers are entitled to and what the buyer broker expects from their client in return. To help our members address these issues, Mainstreet has new listing agreements and a new buyer representation agreement coming out this spring. Be on the lookout for more information from Mainstreet soon.
You are also encouraged to review two articles:
- NAR's 2021 President, Charlie Oppler which provides a comprehensive overview of our perspective on recent meritless lawsuits like this one. Click here to read.
- Former president and CEO of the Federal Home Loan Bank of New York and United States Deputy Secretary of Housing and Urban Development from 1989 until 1992, Alfred Dellibovi discussing how changes to broker compensation would have harmful impacts on first-time home buyers. Click here to read.