KANSAS CITY – Commission costs for sellers of homes are much higher than other countries because the market in the United States is "warped" by the rule that forces them to pay fees to agents of the buyers, according to an attorney who has filed a class action lawsuit against the National Association of Realtors.
Matt Dameron of Williams Dirks Dameron, and Boulware Law, both of Kansas City, are suing on behalf of all individuals who sold a house and paid those broker fees in Kansas City, Springfield, Columbia or St. Louis since late April 2015. It can be as much as 6 percent of the total sale price.
The lawsuit names the NAR and four of the largest brokerage firms in the state.
"The litigation challenges the rule from the National Association of Realtors that compels all selling agents to make a blanket, unilateral offer of a commission percentage to buyer's agents when they list a home on an MLS," Dameron said.
He added, "NAR’s rule causes sellers to end up paying the buyer's agent, even though the buyer's agent acts directly adverse to the seller's interests."
The lawsuit contends that the expense of the buyer's broker would be paid by their clients.
"The current practice and NAR rule harms home sellers and stifles competition in the real estate industry," Dameron argued, adding that total commission costs in the U.S. are higher than in many other countries where the market is not warped by the rule.
Arguments over the rule are not new, he said, and it has been challenged before, including by the Antitrust Division of the U.S. Department of Justice, which sued the NAR in 2005.
In 2018, Dameron noted, the Federal Trade Commission and the Department of Justice "hosted a workshop focused on competition in the residential real estate industry, and several participants discussed the Association's commission rule and noted its potential anti-competitive effects."
"We believe this case has no merit and will not be commenting further,” Elliott Frieder, a spokesman for Realogy Holdings Corp., a residential real estate brokerage firm named as one of the defendants, told the Kansas City Star.