Real estate agents and brokers have been eagerly following the Moehrl anti-trust lawsuit No. 19-cv-01610 filed in the District Court for the Northern District of Illinois Eastern Division in March 2019. This lawsuit is against defendants, National Association of REALTORS and real estate franchisors Anywhere (formerly Realogy), HomeServices of America, RE/MAX, and Keller Williams. The lawsuit was granted class action status on Wednesday, March 29, 2023 (Click Here to read Judge Wood Order), which is a serious blow to the defendants. In this blog post, we will discuss the latest updates on the lawsuit and its potential effects on the real estate industry if it’s successful.
The Moehrl anti-trust lawsuit alleges that the defendants have violated the anti-trust laws by conspiring to require home sellers to pay both the listing broker and the buyer’s broker a percentage of the home’s sale price as a commission. The plaintiffs allege that this requirement has resulted in inflated commissions and limits consumer choices. The lawsuit seeks damages for home sellers who paid a commission to one of the defendants during the class period from March 2015 to the present.
The lawsuit is significant because if the plaintiffs win, it could have a substantial impact on the real estate industry. The cost of damages resulting from the lawsuit could be in the tens of billions of dollars, and the possibility of treble damages could increase the cost even further, with some estimating over $40 billion dollars. Moreover, the lawsuit could result in changes to the way commissions are paid in the real estate industry.
In addition to the Moehrl lawsuit, there’s another class-action lawsuit filed by Sitzer/Barnett against the same defendants. The Sitzer/Barnett lawsuit alleges that the defendants have conspired to maintain inflated commission rates in violation of the Sherman Act. This lawsuit was certified as a class action in February 2022 and seeks damages for home sellers who paid a commission to one of the defendants during the class period from March 2017 to the present.
The National Association of REALTORS and the real estate franchisors have denied any wrongdoing and are fighting these lawsuits. However, the grant of class action status to both lawsuits is a significant development and increases the likelihood that the lawsuits will be successful.
The Moehrl anti-trust lawsuit and the Sitzer/Barnett lawsuit against the National Association of REALTORS and the real estate franchisors could have a massive impact on the real estate industry if they’re successful. The lawsuits seek damages for inflated commission rates charged by the defendants and could result in changes to the way commissions are paid. The grant of class action status to both lawsuits makes them more likely to succeed and increases the cost of damages for the defendants. Real estate agents should follow these lawsuits closely and prepare for the potential changes that could occur in the real estate industry.