BREAKING NEWS: Judge Andrea R. Wood has ruled that a pending lawsuit challenging the way real estate commissions are paid should be upgraded to a class action lawsuit, substantially expanding the scope and potentially dramatically impacting the way real estate commissions are paid.
Read the full article on Real Estate News here. Plaintiffs in the Moehrl vs. the National Association of Realtors, et al., (originally filed in 2019) allege that requiring home sellers to pay commissions to buyers brokers is a violation of federal anti-trust laws. Historically, when a listing agent charges a homeowner 5% (for example) to list and sell their home, part of that 5% (usually half) goes towards paying the buyers broker. The plaintiffs in this case say they were damaged because they paid a cost — the buyer's agent commission — that would have been paid by homebuyers in a competitive market. Judge Wood ruled today that in addition to the handful of people who originally sued in 2019, the outcome of the lawsuit will be expanded and cover home sellers "who paid a commission between March 6, 2015, and December 31, 2020" to specified companies and MLSs as well as "current and future" sellers engaged with those entities. That significantly broadens the scope to a pool of home sellers that sold their homes over a 5 year period and paid the buyers broker commission. Additionally, she expanded the language to include "current and future" sellers. This strikes a blow to the defendants, which include the NAR, many of the major real estate brokerages and major MLSs, virtually insuring this case will head to trial, according to an industry insider. At FSBO Sherpa, we have always contended that the current model of how real estate commissions are paid is broken. This ruling unquestionably supports our beliefs. Why should home sellers be asked (REQUIRED actually!) to pay the fee of their buyers' agent? Maybe that buyers agent has spent the last 6 months working with these buyers, driving them around to look at several houses, putting in several offers for their buyers, only to not have those offers accepted. Why should YOU, the home seller, have to pay for that agents last six months of work??? The buyers should pay their own agent for the work they perform. We are keeping our eyes closely on this case because it could have dramatic implications on how real estate commissions are paid. If you agree that the archaic way real estate commissions are paid is blatantly unfair to home sellers (and buyers alike), For Sale By Owner may be the right option for you. And if you want to list and sell your FSBO like a pro, please contact us at FSBO Sherpa.
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AuthorField Notes from the FSBO Sherpa. Helping guide motivated, DIY homeowners through the For Sale By Owner journey, one real estate transaction at a time. Archives
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