Expert witness Norman Miller testified in the latest filings of the lawsuit, claiming that buyer broker commission rates have shown “extreme price rigidity,” remaining consistently high despite inflation and technological advancements that have increased efficiencies. Miller also asserts that these rates do not vary based on the agent’s experience, hours worked, or tasks performed.
Furthermore, Miller’s statement alleges that NAR’s rules, including the now defunct participation rule, incentivized agents to steer buyers towards homes with higher commission rates.
Comparing commissions from foreign markets
The filings also included an estimate of potential damages in the lawsuit. Expert witness Rose M. Abrantes-Metz analyzed transactions from four MLSs, including Triad MLS in North Carolina, Stellar MLS in Florida, Southwest MLS in New Mexico, and South-Central Kansas MLS. Abrantes-Metz compared the commissions paid by buyers to their agents with buyer’s agent commissions in foreign markets, finding a significantly lower average commission rate of 1.38% compared to the typical 3% rate in the U.S.
Based on this analysis, Abrantes-Metz estimates that buyers in the proposed class could be entitled to $8,524 in damages each, totaling $3.6 billion for the four MLSs and potentially tens of billions of dollars for the entire proposed class. However, she notes that the proposed class may be reduced by 75% if settlements in home seller commission lawsuits also cover homebuyers who sold homes during the same period.
The proposed class includes all buyers who paid a buyer-broker commission in 39 MLSs between January 25, 2015, and December 31, 2021, varying based on state antitrust and consumer protection laws. This class could potentially include millions of buyers in 23 states and Washington, D.C.
In response, a NAR spokesperson emphasized the organization’s commitment to promoting a competitive, fair, and transparent real estate marketplace, allowing buyers and sellers to negotiate compensation with their agents and access the benefits of professional representation. The spokesperson affirmed NAR’s intent to advocate for their position as the case progresses.