14 Mar Class Action Lawsuit Targets Real Estate Brokers
Real estate is such a huge industry and a recent class action lawsuit filed in the courts may change the way the residential side of it works if it is successful. According to news reports about the suit, the National Association of Realtors (NAR), Realogy, Keller Williams HomeServices of America, Inc. (subsidiary of Berkshire Hathaway) and RE/MAX are accused of cheating home sellers out of money through anti-competitive practices. The alleged practices would inflate commission rates for buyer brokers’ because they were listed in certain multiple listing services (MLS) databases. MLS databases are controlled by the local NAR associations. Most realtors have to list their properties on the MLS’ to effectively sell their clients’ properties. According to the complaint,that necessity saddles home sellers with an additional cost because it inhibits them from getting interest on their property from some buyer brokers’ commission rates. The complaint also states if the MLS didn’t require buyer brokers’ a higher commission, they would be forced to be get paid from their clients and would have to offer a lower commission rate to fulfill their duties. An increased commission for the buyer broker means more money the home seller has to pay. There has been skepticism so far regarding the lawsuit, but Hagens Berman, one of the premier law firms in the country, will help litigate the cases for the plaintiffs as well as another well-known law firm Cohen Milstein.
In real estate certain terms flow very easily in the general public lexicon, but in actuality they can have real world consequences if the parties engaged in the real estate transaction aren’t careful. For example, the term realtor can apply to both a real estate agent and broker. However, it doesn’t mean that person is a member of trade organizations like NAR, (Multiple Listing Service) MLS, and other real estate associated entities. Most people engage a real estate agency or broker when necessary usually when they are buying or selling a house so the specifics of certain terms can get lost. Another example is when people use the terms real estate agent and broker interchangeably, but there are big differences between a real estate agent and a broker. The real estate broker generally has more education and training than a real estate agent. Through their broker’s license they are able to hire real estate agents. Real estate agents must work under a broker, they are not allowed to work independently. Any actions an agent may take the broker is responsible for. Within the terminology of real estate agents there are terms like listing agent, buyer’s agent, dual agent, and transaction agent. The listing agent represents the seller. The buyer’s agent represents the buyer. A dual agent can represent both parties and in the same transaction. A transaction agent is someone who is neutral to both the seller and buyer and just facilitate the deal.
Gary Lucid, President of Lucid Realty in Illinois, wrote an article in Chicago Now calling the lawsuit baseless. As the lawsuit makes its way through the courts, we will see whether it goes away or its merits will stand. It has already made headlines in the real estate press.
RapidFunds provides post-settlement funding to plaintiffs’ attorneys with fees in the Buyer Brokers’ Commission Rate class action lawsuit. The company also provides case cost funding to plaintiffs’ attorneys for their current and future case expenses like the Buyer Brokers’ Commission Rate class action lawsuit. Interested plaintiffs’ attorneys can fill out an application on our website or complete the application here. For more information about post-settlement funding, case cost finance, and the funding process call 888-927-9500 or email firstname.lastname@example.org.