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After footing a commission bill of more than $40,000, a Nevada homeseller has filed a lawsuit alleging the National Association of Realtors, state and local Realtor associations, and a large multiple listing service violated federal and state antitrust laws by conspiring to inflate broker commissions.
On Monday, Jan. 15, Las Vegas resident Nathaniel Whaley filed a complaint seeking class-action status on behalf of anyone who, from January 15, 2018 through the present, paid a broker commission in connection with the sale of residential real estate listed on one of the following MLSs: the Northern Nevada Regional MLS; Elko County MLS; Incline Village MLS; and Mesquite MREA MLS. The complaint estimated the class to be in the “many thousands.”
According to the complaint, Whaley sold a home in the Las Vegas metro area on April 11, 2022, for $805,000 and paid a total broker commission of 5 percent, or $40,250, of which 3 percent went to the buyer broker.
The suit was filed in the U.S. District Court for the District of Nevada and the defendants are NAR, Las Vegas Realtors, Nevada Realtors, Sierra Nevada Realtors, Incline Village Realtors, Elko County Realtors, Mesquite Real Estate Association, and Northern Nevada Regional MLS (NNRMLS). The state’s largest MLS, the Greater Las Vegas MLS which is owned by Las Vegas Realtors, was not named in the complaint.
“Defendants’ conspiracy requires sellers to pay inflated commissions for services provided by buyer-brokers; raises, fixes, and maintains buyer-broker compensation at levels that would not exist in a competitive marketplace; and encourages and facilitates steering and other actions that impede entry and market success by lower cost real estate brokerage services,” the complaint says.
The suit challenges a NAR rule that requires listing brokers to offer compensation to buyer brokers in order to submit a listing to a Realtor-affiliated MLS, known as the Participation Rule or the Cooperative Compensation Rule.
“The cooperative compensation practice makes efficient, transparent, and accessible marketplaces possible,” NAR spokesperson Mantill Williams told Inman in a statement.
Mantill Williams
“Sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. The National Association of Realtors will respond to this complaint in court.”
This is the latest suit to generally attack the practice of requiring listing brokers to share commissions with buyer brokers in the wake of an Oct. 31 verdict in a case known as Sitzer | Burnett in which a Kansas City jury found NAR and major real estate franchisors conspired to inflate commissions and awarded damages that may end up costing the defendants nearly $5.4 billion.
The Whaley complaint alleges the Realtor associations violated the federal Sherman Antitrust Act and the Nevada Unfair Trade Practices Act. The complaint demands a jury trial and seeks awards for damages and costs of the suit as well as injunctive relief banning the defendants from continuing their alleged violations of the law.
“While we are unable to comment on active litigation, we are committed to supporting consumer choice by promoting transparency and competition in the marketplace,” NNRMLS CEO George Pickard told Inman in a statement.
“The NNRMLS does not set, suggest, or require commission amounts or rates. Broker compensation is always optional and negotiable. Compensation and commissions are determined by the real estate licensee and their client.”
Inman has reached out to all of the defendants and will update this story with any responses they provide. Sierra Nevada Realtors declined to comment for this story.
Editor’s note: This story has been updated with a comment from NNRMLS.
