You know the deal: if you want to sell a house, and you want to sell it right, you have to pay the piper. The piper, in this case, is your real estate agent, the man or woman who is responsible for selling your home. Because they have the expertise, the connections, and the experience to get it done quickly and for the right price, you fork over a part of the sale to them, with the industry standard being six percent.
If you’ve sold a home recently, you probably did this and didn’t think much of it. Perhaps the annoyance you felt at paying the commission was outweighed by the convenience of having the service. That’s how it’s supposed to work, isn’t it?
Well, according to some pretty high profile lawyers, maybe not. Two law firms, Cohen Millstein Sellers & Toll and their fellows at Hagens Berman Sobol Shapiro are spearheading a class action lawsuit against this practice. The defendant? The National Association of Realtors (NAR), the Washington based lobbying firm which the lawyers argue has created a real estate monopoly.
The plaintiffs in the class action are anyone who has listed a home through one of America’s 20 largest listing services in the past five years. The claim is that the NAR’s practices constitute a monopoly that violates federal anti-trust laws. By unifying the top 20 firms in the nation and standardizing this six percent fee, so claim the plaintiffs, they have inflated the actual value of their services and made it unduly difficult for homeowners to find adequate alternatives.
Unsurprisingly, the NAR denies these claims. In a response to MarketWatch, they commented “the complaint is baseless and contains an abundance of false claims,” going on to cite relevant precedence for their self-confidence.
But there is other precedence to consider as well, namely, the track records of the law firms in questions. They’ve taken on companies like Vokswagen and Apple in the past, were heavily involved in litigating the Exxon-Valdez spill, and even took big tobacco down a peg. When they step up to the plate, they swing for the fences.
Robert Hahn, a real estate expert, isn’t taking the firms lightly. He refers to the threat as a potential “nuclear bomb on the industry” a potential “Ragnarok,” in an in depth post explaining the case.
We’re going to trust Hahn on this one. This is a potentially major case that is still developing, and we will continue to keep you posted on it here at Unicorn Wealth.