For decades, people seeking to buy or sell a home have encountered the residential real estate industry’s 6 percent commission.
Buyers and sellers across the nation have customarily complied with the practice of paying 6 percent of a home’s sale price — widely regarded as the norm — to real estate agents involved a deal. Typically, the percentage is split almost or exactly evenly between buyer and seller agents, with the people selling their home footing the bill. In other words: If a home sells for $200,000, the seller would usually pay a total of $12,000 in commissions, while a buyer pays nothing.
In recent years, however, federal regulators, start-ups, and academics have attempted to chip away at that tradition, arguing that the 6 percent fee is outdated. With the Internet and emergence of start-ups such as Zillow, they assert, home shoppers are doing more research and house-hunting on their own. Requiring customers to pay the same fees that they did 10 or 20 years ago isn’t just unfair, these groups argue, it’s also monopolistic.
A class action lawsuit filed this month is now weaponizing those claims.
Three heavy hitting law-firms — Cohen Milstein, Hagens Berman, and Susman Godfrey — filed a complaint in Chicago, alleging that the National Association of Realtors (NAR) and four of the biggest national real estate brokerages violated federal antitrust law by requiring home sellers to pay not only their own real estate agent, but also the broker who represents the buyer of their homes.
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The attorneys behind the class action lawsuit have a history of major wins. Hagens Berman obtained a $1.6 billion settlement against Toyota in 2013 after alleging that its vehicles had a defect that caused sudden acceleration. And in 2014, Cohen Milstein won a $400 million settlement in an antitrust lawsuit against Apple Inc. that alleged that Apple and five large U.S. publishing companies conspired to raise the retail prices of e-books. Susman Godfrey also obtained a nearly $200 million settlement in 2016 in against a Japanese manufacturer of automobile parts, DENSO Corp., after alleging a long-running price-fixing conspiracy.
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