T
he real estate industry is still reeling from the National Association of Realtors' (NAR) antitrust lawsuit. The settlement has left many questions unanswered, and it's time to cut through the noise and get to the heart of the matter. Nearly a year after losing the case, NAR continues to miss the mark.
The crux of the argument was that listing agents were asking homeowners to pay a commission that covered both their fee and the buyer agent's fee, essentially standardizing compensation across competing companies. This is textbook price-fixing, where competitors agree to set prices instead of letting the market decide.
Price-fixing occurs when competitors agree to set prices, stifling competition and benefiting consumers. In real estate, asking homeowners to commit to a specific percentage of the commission for any agent from any brokerage who brings a buyer is not far off from this example. The MLS was just the vehicle - the megaphone - that broadcasted this offer.
The root problem lies in the listing agreement, where homeowners sign up to pay a specific selling broker fee with the understanding that it will go to any competing broker who brings a buyer. This creates an industry norm and locks consumers into it before the house even hits the market.
The Moehrl and Burnett cases highlighted this issue, arguing that the harm occurred when sellers signed the listing agreement committing upfront to a buyer's broker fee. The American Bar Association's Antitrust section also noted that NAR rules requiring seller brokers to offer compensation to buyer brokers violated antitrust laws by eliminating competition.
Despite this, many in the industry continue to miss this crucial point, setting themselves up for another potential legal disaster. As part of the settlement, MLS commission offers are no longer allowed, but some agents and brokerages have tried to get creative with yard signs, flyers, or private messages. However, changing where you advertise the fee doesn't change the fact that the violation is occurring.
The real risk isn't where you're posting the commission; it's having any language in your listing agreements that locks homeowners into paying a set fee to the buyer's broker. Many Boards and Associations are still encouraging their members to ask homeowners to commit upfront to a fixed buyer-agent commission, which goes against the core of the antitrust ruling.
It's time for real change - we need to let the market negotiate compensation like any other business. We can't just play "hide the commission" or ignore the lesson from the lawsuit; we're begging for another one if we don't face facts and ditch old templates in favor of transparency and negotiation.
