Massachusetts Home Sellers File Lawsuit Against MLS, Real Estate Brokerage Giants
Like its companion cases in Missouri and Illinois district courts, the case alleges antitrust and anticompetitive practices.
In a parallel move to two ongoing real estate cases at the district court level, Moehrl v. NAR (Missouri) and Sitzer v. NAR (Illinois), a group of Massachusetts home sellers have filed suit against real estate brokerage firms Realogy, RE/MAX, Keller Williams, and Home Services of America. Unlike Moehrl and Sitzer, this lawsuit, Bauman v. MLS, names a Multiple Listing Service (MLS) group as a defendant—the MLS PIN. The MLS PIN serves the six New England states and New York. Its 41,000+ members make it the seventh largest in the country.
Bauman v. MLS was filed on December 17th in the U.S. District Court for the District of Massachusetts by three home sellers from the state. The plaintiffs seek class-action status.
As the first case to name the MLS as a defendant, Bauman v. MLS connects the traditional real estate industry’s major players in a way that its companion cases do not. The National Association of Realtors (NAR), which is not named as a defendant in Bauman but is in Moehrl and Sitzer, the MLS, and the major brokerages all comprise the incumbent system. The complaint details their interconnectedness, wielding the defendants’ own terms:
“Defendant HomeServices, for example, has explained its own role as follows: ‘As an industry leader, we have a responsibility to actively participate in shaping our industry and its current and future business model. The HomeServices executive leadership and CEOs of our operating companies drive these important discussions as leaders within the National Association of Realtors…and at the regional and local levels of the MLS organization.’”
Similar to Moehrl and Sitzer, the complaint alleges that the defendants’ practices inflate costs to home sellers through a conspiracy in violation of the Sherman Act and Massachusetts antitrust laws.
“Defendants...sought to enforce a scheme designed to maintain supra-competitive commissions and impede lower-priced competition,” the suit reads.
The complaint also discusses the presence of steering in the industry, which occurs when agents direct prospective buyers to the properties that will return the highest commission.
“[It] has been widely reported in government reports, economic research and the trade press and is well understood by MLS PIN, the Broker Defendants, and their co-conspirators. Indeed, Keller Williams University’s own course materials admit that offering less than three percent in buyer-broker commission on an MLS ‘will reduce the number of willing and qualified buyers that will see your home,’” the complaint reads.
The case comes on the heels of the U.S. Department of Justice’s November suit against the NAR for antitrust violations. The suit resulted in a settlement requiring the NAR to amend some of its practices, including requiring buyer’s agents to stop representing their fees as free and eliminating realtors’ ability to filter home listings based on expected commission.
REX was founded outside of the NAR, MLS, and the brokerages affiliated with them, because REX is dedicated to a more fair, pro-consumer approach to the residential real estate transaction. REX eliminates the inflated fees and other adverse effects on consumers caused by the traditional players’ anticompetitive practices through a commitment to transparency, efficiency, and a customer-centered approach. REX’s AI and data capabilities enable us to market homes more effectively and without the high cost. And REX’s salaried advisors work to satisfy home buyers and sellers, rather than working in pursuit of a fast commission.
In driving its mission, REX has filed a lawsuit of its own — on November 30, 2020, REX sued the state of Oregon over its anti-rebate ban. The state ban prevents REX from rebating to its customers in the state, thus obstructing them from greater savings. The policy is brazenly anti-consumer, and REX is proud to take on this fight.
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