NAR vs Moehrl Lawsuit

Joshua Fraser Jul 20th, 2021 / Real Estate, Lawsuit, Industry News

Another NAR Antitrust Lawsuit

Moehrl v. National Association of Realtors (NAR) is a lawsuit that has become a reputed antitrust civil suit in Illinois. The case was initially filed on the 6th of March 2019 by Cohen Milstein and co-counsel on account of home sellers who have paid a broker commission over the past four years regarding the sale of residential real estate mentioned on one of twenty Multiple Listing Services (MLS). It was initially lodged in the U.S. District Court, Northern District of Illinois.

About the Real Estate Lawsuit

The real estate anti-competitive lawsuit covers MLS of significant metropolitan areas in the Mid-Atlantic, Mid-West, South-West, Mountain-West, Southeast regions, and the four largest real estate brokerages, i.e., Keller Williams, HomeServices of America, Realogy (NYSE: RLGY), and RE/MAX (NYSE: RMAX). Plaintiff claims that NAR’s adoption and implementation of a rule has been plotted that requires all brokers to make an umbrella offer for buyer broker non-negotiable compensation when adding an estate on the MLS.

The complaint claims that the new Buyer Broker Commission Rule restricts buyer broker market competition because the customer does not negotiate the commission with the buyer's agent. 

Furthermore, the seller’s bloated commission offer cannot be reduced by the consumers or their brokers. The Defendants often prevent buyer brokers from making home buying deals to reduce their commission.

On the 2nd of October 2020, The United States District Court for the Northern District of Illinois’ Honorable Andrea R. Wood rejected the Defendants' motions to dissolve, permitting all the antitrust arguments of the Plaintiffs to continue. At present, the complainants are pursuing three important things, i.e., class-action status for the case, penalties for commission overpayment, and an end to allowing selling agents to pay commission to buying agents. The total broker commission in the United States is 5%-6% percent of the home sales price, with the buyer’s agent being paid 2.5%-3% in commission and the seller’s broker receiving nearly half of the amount.

Although the litigants are not successful in some industries, the current policies have come to the media's notice, which might be a piece of good news for any real estate investor looking for a commission negotiation.

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