A group of home sellers in northern Georgia has taken on real estate industry giants in a class-action antitrust lawsuit. The plaintiffs, Janet Phillips, Joseph Hunt, Edith Anne Hunt, Penny Scheetz, Benjamin Aune, and Parkwood Living, have collectively accused major players in the field of colluding to artificially inflate real estate agent commissions.
The lawsuit, a bold move against well-established names, includes a diverse array of defendants. Among them are industry powerhouses like the National Association of Realtors (NAR), HomeServices of America, Keller Williams, RE/MAX, Christie’s International Real Estate, Anywhere, Compass, Engel & Völkers, and HomeSmart. Notably, the list expands to encompass local firms, such as Harry Norman Realtors, Ansley Atlanta Real Estate, Atlanta Fine Homes, Solid Source Realty, Palmerhouse Properties, Higher Tech Realty, and Hamilton Dorsey Altson Company. Even RE/MAX and HomeServices have found themselves embroiled, with local subsidiaries, including RE/MAX Metro Atlanta and HomeServices Georgia Properties, named as defendants.
At the heart of the complaint is the National Association of Realtors’ Participation Rule, a regulation requiring listing brokers to make a blanket offer of compensation to buyer brokers for a property to be listed on the Multiple Listing Service (MLS).
“The NAR establishes an anticompetitive market where sellers are coerced into subsidizing the buyer’s costs,” the complaint asserts. “The Defendants advance the conspiracy by annually ratifying the NAR rules, including the Compensation Rule, and by participating in councils and committees that ensure compliance with the NAR rules.”
The plaintiffs contend that the enforcement of this mandate leads to a market distortion where sellers are compelled to subsidize buyer costs, thereby inflating the overall sale prices of homes.
The complaint also takes issue with the alleged lack of negotiation power for buyers regarding their agent’s commission. “The rules explicitly forbid negotiations over the buyer broker’s compensation by either the buyer or the paying seller,” the complaint states. “Moreover, they preclude a buyer broker from presenting offers to sellers that are predicated on lowering this commission.”
In a move that adds weight to their claims, the plaintiffs reference ongoing investigations, including the Department of Justice’s scrutiny of the National Association of Realtors and the Sitzer/Burnett suit. These references serve as potential evidence of a broader conspiracy within the real estate industry.
The lawsuit, with its extensive list of defendants and detailed allegations, has the potential to send shockwaves through the real estate market in northern Georgia, prompting a reexamination of industry practices and regulations. As the legal battle unfolds, it may reshape the landscape of real estate transactions and bring greater scrutiny to the longstanding practices of agent commissions.
Source: Finance Yahoo