The copycat commission lawsuits have spread to the Southeast.
On Wednesday, home seller plaintiffs in northern Georgia filed a class-action antitrust lawsuit accusing real estate industry players of colluding to artificially inflate real estate agent commissions.
The lawsuit was filed by Janet Phillips, Joseph Hunt, Edith Anne Hunt, Penny Scheetz, Benjamin Aune and Parkwood Living, LLC, who have all sold properties within the last four years.
The defendants in the lawsuit include the usual big-name real estate players, such as the National Association of Realtors, HomeServices of America, Keller Williams, RE/MAX, Christie’s International Real Estate, Anywhere, Compass, Engel & Völkers and HomeSmart.
However, this time, the robust defendant list also includes some local real estate firms, including Harry Norman Realtors, Ansley Atlanta Real Estate, Atlanta Fine Homes, Solid Source Realty, Palmerhouse Properties, Higher Tech Realty and Hamilton Dorsey Altson Company. RE/MAX and HomeServices also had local subsidiaries named as defendants, including RE/MAX Metro Atlanta and HomeServices Georgia Properties.
Central to the complaint is NAR’s Participation Rule, which requires listing brokers to make a blanket offer of compensation to buyer brokers in order to list a property on the MLS.
“By enforcing this mandate, the NAR establishes an anticompetitive market where sellers are coerced into subsidizing the buyer’s costs,” the complaint reads. “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 complaint continues, “As a result of this scheme, the purportedly non-negotiable commissions of buyer agents are rolled into the sale price of homes. This system, with its veiled surcharges, illegally warps the real estate market.”
The plaintiffs also take issue with the buyer’s alleged inability to negotiate 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 addition to what has become the “usual allegations,” the complaint also references the Department of Justice’s investigation into NAR, as well as the Sitzer/Burnett suit as evidence of the alleged conspiracy.
Like the other copycat lawsuits, the Phillips suit, named after its lead plaintiff, is seeking class-action status. The proposed class would include all persons who listed properties on one of Georgia’s MLSs and paid a buyer broker commission with the sale of their property between Nov. 22, 2019, and the present.
The plaintiffs are asking for a permanent injunction preventing the defendants from “requiring that sellers pay buyer brokers,” as well as damages and a jury trial.
In an emailed statement, Mantill Williams, the vice president of communications at NAR, said the trade group would respond to the complaint in court.
“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,” Williams wrote.
Compass, Christie’s, Anywhere and HomeServices declined to comment on this story and other brokerages did not respond to requests for comment.