A recently filed lawsuit against NAR, among other big industry players, alleges that NAR-member agents, along with many of the country’s various multiple listing services, colluded to inflate Realtor commissions. Here’s a look at the commission numbers involved.

A recently filed lawsuit against the National Association of Realtors (NAR), among other big industry players, alleges that NAR-member agents, along with many of the country’s various multiple listing services (MLS), colluded to inflate Realtor commissions.

The claim stems from NAR’s compensation policy, which requires listing agents demand buyer-side commissions from sellers when listing a home on an MLS.

The suit’s plaintiff — originally Christopher Moehrl of Minnesota, but now a class action group that includes homesellers from 20 MLSs across the nation — alleges the arrangement is a violation of antitrust law. They also say the commissions they paid would be much lower if the agents had to negotiate for them.

How much did sellers really pay in buyer-side commissions?

Most Realtors charge a 5 percent to 6 percent commission fee — 2.5 percent to 3 percent for themselves and 2.5 percent to 3 percent for the buyer’s agent.

On a $250,000 home that means a seller would pay $6,250-$7,500 to their agent and an additional $6,250-$7,500 to the buyer’s agent — a person actually negotiating against them.

But this case isn’t about just one sale — nor one low-priced sale, for that matter. The suit’s class action group (which lawyers are currently recruiting for) spans years of sales and 20 housing markets, including many of the nation’s biggest and most expensive metros.

Attom Data Solutions ran the numbers, taking into account every sale in the 20 named MLS’s markets since March 6, 2015 (the date named in the suit). If each of those sellers paid a 3 percent commission to the buyer’s agent — largely the industry standard — it equates to $43.19 billion in losses. If they paid a 2.5 percent commission? It still clocks in at $35.99 billion.

Considering antitrust law requires treble damages — meaning triple the actual damages suffered — that could mean serious rewards for these class-action plaintiffs, not to mention big losses for NAR and the other named defendants.

Which markets have the most at stake?

At the market level, sellers in the South seem to have the most money on the line.

In Florida’s Miami-Fort Lauderdale-West Palm Beach area, sellers paid $4.8 billion in buyer-side commissions since 2015 (considering a 3 percent commission). Sellers in Texas’ Dallas-Fort Worth didn’t fare much better, paying $4.6 billion in commission over the covered time period.

Other markets with big money at stake include the greater D.C. area, as well as Phoenix and Houston.

According to legal experts, the case could be a long and drawn-out one. And though we might not know the outcome — or its impact on the industry — for quite some time, one thing is for certain: both homesellers and NAR alike have serious money on the line.

To get a more detailed look behind these transactions, visit Attom Data Solutions.

Rob Barber is the CEO at Attom Data Solutions.

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