They wait until the week that the trial starts? She should have said ‘regularly defraud MORE clients’.
The National Association of Realtors laid out a doomsday scenario for the industry in the case home sellers prevail in two landmark antitrust cases.
The group warned that a ruling in the plaintiff’s favor could render buyer’s agents unaffordable, block equal access to listings and restrict buyer choice, NAR’s general counsel Lesley Muchow said. The trade group held the online webinar five days before Sitzer/Burnett, the first of the two closely watched suits, is slated to start trial in Kansas City.
“This would be bad news for consumers,” Muchow said. She added that if NAR isn’t allowed to continue with some of its practices, “we would be forced back into the 19th Century or what we see as the Wild West, where unscrupulous people could regularly defraud clients.”
Muchow argued that if the lawsuits’ results upset local MLS systems, buyers would have fewer homes to choose from and sellers would lose exposure to their properties.
“Buyers would have to visit every single broker in town in order to see all of the available inventory that is out there for them,” Muchow said.
This scenario would likely lead to outdated and inaccurate listing information, she said, and would cost brokers more money if they have to pay to feature their listings on third-party platforms.
Jury selection will begin on Friday.
Both of the landmark lawsuits center on NAR’s “participation rule,” which critics claim violates antitrust laws by inflating commissions charged to home sellers.
The rule’s interpretation was largely understood as requiring listing brokers to offer compensation to buyer’s agents, but a spokesperson for NAR said that it only “requires participants to communicate an offer of compensation to other MLS participants and that offer can be any amount, including $0.”
Another comment from an agent:
“We’re in a perfect storm,” said Leigh Brown, a North Carolina broker who serves on N.A.R.’s national board of directors, of the issues now surrounding the organization. “N.A.R. is bloated, and its staff is arrogant. And at the same time, its membership is trying to figure out if they can function without N.A.R., and we’re defending whether or not our business model works for the average consumer.”
Ms. Brown said she believes the class-action suits to be shortsighted, however, because if home sellers are not required to compensate their buyers’ agents, many buyers will navigate the home market solo, leaving them vulnerable to exploitation. “It’s structured this way to make sure the consumer has protection,” she said.