Breaking News: Major Lawsuit Against National Realtors – Insights and Implications

Understanding Real Estate's Big Shift: Navigating New Commission Dynamics


Dear Clients and Friends,

Today, I want to address an issue that’s making waves in the real estate world. You might have heard the recent news about the National Association of Realtors and several large-scale brokerages being found guilty of conspiring to inflate commissions. This is a significant development, and I’m here to break it down for you, so you understand what it means for you as a homeowner or potential buyer.

A lawsuit filed several years ago accused these organizations of artificially inflating the commissions that consumers pay for residential real estate services. Some brokerages settled, but others, like Keller Williams, chose to fight. They lost, and now they face over $5 billion in damages. While this decision is being appealed, it has sparked additional lawsuits and a second antitrust suit against the residential real estate agent industry.

Why is this happening? Historically, the seller would hire an agent, typically for about a 7% commission, to sell their property. The listing agent represented both the seller and the buyer, primarily working in the seller’s best interest. This arrangement wasn’t always ideal for buyers, leading to the emergence of buyer brokerage, where agents represent either the buyer or the seller, sharing commissions and advocating for both parties.

However, due to systemization by technology, there’s a perception, especially in the court of public opinion, that there might be price fixing in how commissions are handled. Commissions are not fixed, but this perception persists.

What does this mean for you? In the short term, not much will change as the appeals process unfolds. However, I hope this situation encourages buyers to interview multiple buyer brokers, exploring different commission structures and value levels. This approach benefits the consumer, allowing them to choose what they want to pay for the services they receive.

Looking ahead, I anticipate a shift towards a model where commissions are negotiated between the buyer and the buyer broker, similar to commercial real estate. This change would increase transparency and efficiency, ultimately benefiting the consumer. Additionally, this shake-up might lead some real estate agents to leave the industry, leaving behind a group of more experienced, full-time agents, which is also beneficial for consumers.

This is a big deal and just the beginning of a significant shift in our industry. If you have any questions about this situation or how it might impact you, please don’t hesitate to reach out. Shoot me an email—I’m always here to help and provide expert guidance.

Stay informed, stay engaged, and let’s navigate these changes together.

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Peter Chabris

Licensed in 2002, Peter launched The Chabris Group in 2007, which has earned the title of Cincinnati’s #1 real estate sales team since 2013. The team serves several hundred families every year and is recognized as the top sales team in Keller Williams’ Ohio Valley Region.