Focused On Business Law

Attorneys Sara Bradley, Marinda Neumann and Lindsay Nakagawa.

Class action status granted for lawsuit over buyer broker commissions

On Behalf of | Apr 17, 2023 | Real Estate

A federal judge in Illinois has awarded class certification for plaintiffs in an antitrust lawsuit against the National Association of REALTORS® (NAR).[1] The case, Moehrl v. NAR et al., centers on the payment of commission to buyers’ brokers by residential home sellers.

The case could have far-reaching effects on broker earnings as well as real estate listing prices. In her ruling, U.S. District Judge Andrea Wood said over $10 billion is at stake involving home sales from 2015 to 2020 if the commission rule is deemed an anti-competitive practice.

Case background

In the United States, most multiple listing services (MLSs) are owned by local associations of REALTORS® affiliated with NAR. Those MLSs are required to implement NAR’s mandatory rules, including a rule which requires participants of the MLS to make a blanket unilateral offer of compensation to a buyer’s broker. When the property sells, a portion of the sale price is paid to the seller’s broker and buyer’s broker as commission.

The Moehrl lawsuit was filed in early 2019 on behalf of home sellers who paid broker commissions during the previous four years for properties offered on MLSs covering much of the United States. The suit targets NAR and the four largest real estate broker franchises: Realogy Holdings Corporation, RE/MAX Holdings, Inc., Keller Williams Realty, Inc., and HomeServices of America, Inc.

Plaintiffs’ Argument

Plaintiffs allege these companies and NAR have conspired to force sellers to pay inflated commissions to buyer brokers.[2] According to the lawsuit, buyer broker commissions remain steady due to the conspiracy, despite the diminishing role of buyer brokers due to homebuyers identifying properties through online services. Buyer brokers steer buyers to properties where the listing broker is offering higher cooperating commissions.[3] In turn, listing brokers offer higher buyer broker commissions to increase attention and sell properties faster. In a competitive market, buyers would pay their brokers directly, and buyer brokers would compete for clients by offering lower commissions or rates. Therefore, the plaintiffs argue that by requiring listing brokers to offer commission to buyer brokers, NAR and the franchises have inflated commissions and restrained price competition. Plaintiffs seek (1) monetary damages, which plaintiffs’ expert witness estimates at an overpayment of 1.55% in buyer broker commission, for a total of approximately $13.7 billion,[4] and (2) a permanent injunction enjoining defendants from requiring home sellers to pay buyer brokers’ commission.[5]

What are the possible ramifications?

If the court decides for the plaintiffs, listing brokers would no longer be required to offer compensation to buyer brokers. Sellers could choose whether to pay commission to the buyer’s broker or whether to require the buyer to negotiate payment directly with his or her broker. As competition for buyer clients increased, commission rates may become more competitive. Real estate commissions in the United States are among the highest in the world.[6]

According to NAR, the current commission structure ensures efficiency, equity, and equality. Agent commissions cannot be financed as part of a residential mortgage. If plaintiffs are successful, buyers would be forced to compensate their agents out-of-pocket, decreasing the funds available to purchase the home. With the added costs, many first-time and low-income buyers could get priced out of the market.[7]

Judge Wood’s ruling does not affect the merits of the case; however, it allows other home sellers who have been impacted by the alleged conspiracy to join the lawsuit as class members. The Seventh Circuit Court of Appeals recently denied a petition by NAR and other defendants to appeal the class certification, allowing the case to proceed as a class action.


[1] Moehrl v. The Nat’l Ass’n of Realtors, 19-cv-01610 (N.D. Ill. Mar. 29, 2023).

[2] Complaint at 1, Moehrl v. The Nat’l Ass’n of Realtors, 19-cv-01610. (N.D. Ill. March 6, 2019).

[3] Id. at 4.

[4] Moehrl v. The Nat’l Ass’n of Realtors, 19-cv-01610 (N.D. Ill. Mar. 29, 2023).

[5] Complaint at 90F, Moehrl v. The Nat’l Ass’n of Realtors, 19-cv-01610. (N.D. Ill. March 6, 2019).

[6] Real Estate Agent Commissions Around the World, Wall. St. J.,

[7] Charlie Oppler, How the Agent Commission Structure Benefits Everyday Americans, Inman News (Mar. 18, 2021),