Buyers fight commissions on new homes

Law of the Land

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In the case Blough v. Holland Realty Inc., four couples contracted with new-home builders and subdivision developers to have new homes custom-built on particular lots in several Boise, Idaho, subdivisions.The builders and developers had pre-existing agreements in place with exclusive real estate brokers, whereby brokers would receive a fee or commission on every lot sale and, also, every new home constructed in the respective subdivisions. The buyers were required to pay commissions to brokers for their respective lots, and were also required to pay commissions to brokers for the built homes, in order to buy a lot in the subdivision (although most broker commissions were, technically speaking, paid by the builders and developers out of the fees paid by buyers for the lots and homes). Consumers filed a class-action suit against the real estate brokers, alleging that the "tying" of real estate services regarding the built homes to the sale of the undeveloped lots v...