Almost five years have passed since the original Batton homebuyer commission lawsuit was filed, and the plaintiffs are finally asking for certification of their proposed class. 

Filed in U.S. District Court in Illinois, the lawsuit alleges that the National Association of Realtors (NAR), Anywhere, Keller Williams and RE/MAX all took part in a “decades-long, nationwide antitrust conspiracy,” which the suit claims caused buyers to pay “billions in overcharges.” 

The latest filings in the lawsuit include the testimony of expert witness Norman Miller. In his statement, Miller claims that buyer broker commission rates “displayed extreme price rigidity, remaining around the same elevated rates despite inflation and changes in technology that have increased efficiencies and regardless of the agent’s experience, hours worked, or tasks performed.”

Additionally, Miller’s statement alleges that NAR’s rules, including its now defunct participation rule “incentiviz[ed] agents to ‘steer’ buyers to particular homes based on the home’s commission rate.” 

Comparing commissions from foreign markets

The filings also estimated damages in the lawsuit could look like. To do this, they sought the help of Rose M. Abrantes-Metz, an expert witness who examined transactions across four of the 39 MLSs, including Triad MLS in North Carolina, Stellar MLS in Florida, Southwest MLS in New Mexico and South-Central Kansas MLS in Kansas.

In her report, Abrantes-Metz compared the commissions buyers paid to their agents to buyer’s agent commission in comparable foreign markets. According to her analysis, Abrantes-Metz found the average buyer’s agent commission in these foreign markets to be 1.38%, much lower than the “typical” 3% rate in the U.S.

Based on this, Abrantes-Metz estimates that buyers in the proposed class would be entitled to $8,524 damages each due to the allegedly inflated commissions and home prices. For the four MLSs, this would total $3.6 billion in damages. This is expected to balloon into the tens of billions of dollars for the entire proposed class. 

However, Abrantes-Metz noted that the proposed class could be reduced by roughly 75% if an appeals court rules that settlements reached in the home seller commission lawsuits cover homebuyers that also sold homes during the overlapping proposed class periods. Her calculations show that at least 24% to 28% the proposed class did not sell a home during the Batton class period. Still these estimated damages are much higher than the $1.78 billion in damages awarded in the Sitzer/Burnett home seller commission lawsuit. 

Overall, the class being proposed by the plaintiffs includes all buyers who paid a buyer-broker commission when purchasing a property in 39 MLSs between January 25, 2015, and December 31, 2021, however the exact time period varies depending on each state’s antitrust and consumer protection laws. 

In total, the proposed class would include millions of buyers in 23 states and Washington, D.C.

In an emailed statement, a NAR spokesperson wrote that the trade group is dedicated to fostering a “competitive, fair, and transparent real estate marketplace, empowering buyers and sellers to fully negotiate compensation with their agent and access the many benefits that professional representation provides.”

“We will continue to advocate for our position as the case proceeds,” the spokesperson added.

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