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Real estate brokerages may have thought commission-related class-action lawsuits were on their way out in the real estate industry after nationwide settlements with homesellers, but they’re getting a rude awakening. Some homebuyers have a message for them: You can’t get away that easily.
On June 28, Illinois resident Kevin Cwynar became the latest buyer to file a class-action antitrust lawsuit against several brokerages: The Real Brokerage, Realty One Group, Vanguard, and The Agency, alleging they have caused potentially hundreds of thousands of homebuyers to pay up to thousands of dollars in excess commissions.
“Defendants and their co-conspirators adopted and implemented anticompetitive practices that harmed consumers and homebuyers by, among other things, increasing and artificially sustaining the commissions paid to real estate brokers as part of residential real estate transactions,” the complaint says.
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“Because brokers’ commissions are incorporated into the price of a home, Defendants’ anticompetitive practices have burdened homebuyers nationwide with increased home prices and unnecessarily high costs in residential real estate transactions.”
Real declined to comment for this story. Inman has reached out to the other defendants for comment and will update this story if and when responses are received.
The suit is similar to other commission-related class-action suits filed by homebuyers, which are known as Batton 1, Batton 2, Lutz and Davis, and claims the same National Association of Realtors rules at issue in homeseller cases nationwide have resulted in inflated prices paid by buyers.
This includes NAR’s now-defunct cooperative compensation rule, also known as the Participation Rule, which required listing brokers to make an offer of compensation to buyer brokers in order to submit a listing to a Realtor-affiliated MLS.
“[T]his rule eliminated competition between buyer-agents with respect to their commission rate and the quality of their services,” the complaint says.
“This lack of competition led to homebuyers paying inflated commission rates and receiving lower quality services.”
The suit also took aim at Realtor-affiliated MLSs allowing agents to filter listing searches by commission amount — a practice NAR’s 2024 settlement with homesellers eliminated.
“Naturally, this conflict of interest led to buyer-agents promoting properties that would maximize their commission, which lowered demand for properties that offered lower commissions and thus eliminated competition from discount brokers,” the complaint says.
“This harmed homebuyers, who received diminished, biased services from buyer-agents who steered homebuyers toward purchasing homes that offered high commissions.”
Just because NAR has gotten rid of the policies at issue, doesn’t mean the damage they allegedly caused to homebuyers has been addressed, according to the complaint.
“[The harms caused to American homebuyers for decades have not been remedied, nor have the billions in ill-gotten commissions been disgorged,” the filing says.
The Cwynar suit was filed in the same court as the Batton suits — Chicago’s U.S. District Court for the Northern District of Illinois Eastern Division — but is not suing the same defendants. Notably, NAR is named as a co-conspirator, but not as a defendant in the Cwynar suit.
The suit stresses the broker defendants’ involvement with NAR, including that broker leaders “attend NAR meetings, provide input on NAR’s operations, and review, lobby for, and vote on NAR rules,” “assist in NAR’s enforcement of the rules,” and ”required their brokers and agents to comply with NAR rules.”
“Defendants’ market power means that their involvement was crucial to the success of the conspiracy with NAR and other brokers,” the complaint says.
“To this end, Defendants consented to engage in, facilitate, and execute the conspiracy, playing a significant role within NAR and mandating that their affiliates comply with NAR’s anticompetitive rules and policies as a prerequisite for accessing the benefits of Defendants’ brands and infrastructure, including access to MLSs.”
“Defendants are jointly and severally liable for the acts of their co-conspirators, whether named or not named as party defendants in this action,” the complaint adds.
The complaint seeks to represent two classes:
- A nationwide class made up of “[a]ll persons who, during the applicable limitations period, purchased residential real estate listed on a NAR MLS in the United States.”
- An Illinois subclass made up of “[a]ll persons who, during the applicable limitations period, purchased residential real estate listed on a NAR MLS in the state of Illinois.”
The suit does not define “the applicable limitations period.” The complaint alleges violation of the federal Sherman Antitrust Act and unjust enrichment on behalf of all class members, and violation of the Illinois Antitrust Act and the Illinois Consumer Fraud and Deceptive Business Practices Act on behalf of the Illinois subclass members.
Whether the federal claims, at least, won’t be swiftly dismissed is an open question. As indirect purchasers of buyer brokerage services, buyers are not allowed to sue under federal antitrust laws, but may sue under state antitrust laws, which has limited the claims that still stand in the other buyer commission suits.
In addition, the seller-side litigation settlements have limited the size of any potential homebuyer class in that they prevent sellers who also bought homes from suing as buyers over the same challenged rules. This would drastically cut down the number of class members should any of the buyer commission suits receive class-action status.
Read the complaint (re-load page if document is not visible):
