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follow Patrick 2019 May 15, 9:08pm
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For decades, Realtors’ earnings have been maintained through an opaque structure that allows home shoppers to believe that the seller covers the agents’ costs, and that the consumer has little choice in the matter.That entire system could crumble, if a trio of recently-filed lawsuits are successful.In a complaint filed in early March in the Northern District of Illinois, five law firms teamed up to allege that high commissions were a result of collusion by the National Association of Realtors and the nation’s largest brokerage franchises in violation of federal antitrust laws. The firms include heavy hitters like Hagens Berman, which boasts work on cases including the state tobacco lawsuits that led to a $206 billion settlement, as well as Cohen Milstein, which co-led a case against Apple for monopolizing the market for e-books.The class so far consists of just one person — a home buyer in Minneapolis. But the lawyers are currently recruiting more plaintiffs, and stand to gain millions in attorneys’ fees if a jury awards damages. In April, two nearly identical lawsuits were filed, one by two home sellers in Missouri and one by a Minnesota corporation.On the other side of the suits, the National Association of Realtors is a powerhouse trade group organized in active chapters across all 50 states. It spent about $150 million on federal lobbying and elections in the 2018 cycle, according to the Center for Responsive Politics. More importantly, it also controls access to the Multiple Listing Services that Realtors need in order to list and show homes. ...brokers know that buyers’ agents might skip showing a house if the listing doesn’t offer a full 3% commission.“I’ve been in traditional offices, watching someone go through listings,” said Tom Wemett, a buyers’ agent in Western Massachusetts. “He immediately checks to see what they’re offered, and threw away two or three listings that might have been perfect for their client. The buyer doesn’t know any different, unless they’re searching on Zillow or Trulia and says ‘why didn’t you show me this one?'”
Most sellers are afraid they will not find a buyer, or not the "best" buyer, if they don't pay the realtor vig.And realtors definitely will avoid showing a house whose owner does not submit to their power.