A recently filed lawsuit against NAR, among other big industry players, alleges that NAR-member agents, along with many of the country’s various multiple listing services, colluded to inflate Realtor commissions. Here’s a look at the commission numbers involved.

A recently filed lawsuit against the National Association of Realtors (NAR), among other big industry players, alleges that NAR-member agents, along with many of the country’s various multiple listing services (MLS), colluded to inflate Realtor commissions.

The claim stems from NAR’s compensation policy, which requires listing agents demand buyer-side commissions from sellers when listing a home on an MLS.

The suit’s plaintiff — originally Christopher Moehrl of Minnesota, but now a class action group that includes homesellers from 20 MLSs across the nation — alleges the arrangement is a violation of antitrust law. They also say the commissions they paid would be much lower if the agents had to negotiate for them.

How much did sellers really pay in buyer-side commissions?

Most Realtors charge a 5 percent to 6 percent commission fee — 2.5 percent to 3 percent for themselves and 2.5 percent to 3 percent for the buyer’s agent.

On a $250,000 home that means a seller would pay $6,250-$7,500 to their agent and an additional $6,250-$7,500 to the buyer’s agent — a person actually negotiating against them.

But this case isn’t about just one sale — nor one low-priced sale, for that matter. The suit’s class action group (which lawyers are currently recruiting for) spans years of sales and 20 housing markets, including many of the nation’s biggest and most expensive metros.

Attom Data Solutions ran the numbers, taking into account every sale in the 20 named MLS’s markets since March 6, 2015 (the date named in the suit). If each of those sellers paid a 3 percent commission to the buyer’s agent — largely the industry standard — it equates to $43.19 billion in losses. If they paid a 2.5 percent commission? It still clocks in at $35.99 billion.

Considering antitrust law requires treble damages — meaning triple the actual damages suffered — that could mean serious rewards for these class-action plaintiffs, not to mention big losses for NAR and the other named defendants.

Which markets have the most at stake?

At the market level, sellers in the South seem to have the most money on the line.

In Florida’s Miami-Fort Lauderdale-West Palm Beach area, sellers paid $4.8 billion in buyer-side commissions since 2015 (considering a 3 percent commission). Sellers in Texas’ Dallas-Fort Worth didn’t fare much better, paying $4.6 billion in commission over the covered time period.

Other markets with big money at stake include the greater D.C. area, as well as Phoenix and Houston.

According to legal experts, the case could be a long and drawn-out one. And though we might not know the outcome — or its impact on the industry — for quite some time, one thing is for certain: both homesellers and NAR alike have serious money on the line.

To get a more detailed look behind these transactions, visit Attom Data Solutions.

Rob Barber is the CEO at Attom Data Solutions.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×