The lawsuit about NAR has a long history, and despite some of its most controversial policies, it has helped consumers in many ways. Its Code of Ethics requires agency disclosure, but state laws vary greatly. The scope of agency duties under common law is often vague, so many state associations have lobbied for statutory responsibilities. Agency disclosure forms can help limit fiduciary duty liability. The NAR is also the co-defendant in two class action lawsuits.
NAR’s Policy Prevents Consumers from Receiving the full Benefits of Competition
The Department of Justice filed a lawsuit against the NAR for preventing competition on its website. The DOJ said specific provisions of the NAR’s virtual office policy impeded the use of Internet-based tools and discouraged discounting. In addition, the lawsuit claims NAR’s policies are outdated and prevent consumers from receiving the full benefits of competition.
NAR’s anti-competitive policy prohibits competition by preventing consumers from negotiating lower commissions with their real estate agents. The NAR’s policy also prevents competitors from offering consumers lower transaction fees. It is important to note that REX admits to using the Zillow website to display listings. This means that REX is reliant on Zillow’s proprietary technology.
It Allows Traditional Brokers to Discriminate Against Brokers Using New Technologies and Business Models
To promote competition and foster innovation, NAR has adopted rules to prevent traditional brokers from discriminating against brokers who use new technologies and business models. However, the Amended Complaint argues that NAR’s new laws discriminate against brokers who use VOWs. This is particularly troubling as VOWs are designed to promote referral-based business models.
Despite the positive results of the lawsuit, it remains unclear whether the NAR’s policies will stand up in court. A United States investigation found fifty cases where brokers opted out of VOWs in fourteen markets. While most of these cases were in large markets with multiple realtors, and competing brokers, others involved smaller markets with relatively few brokers. For example, in Emporia, Kansas, most brokers chose not to participate in VOWs. In Detroit, however, only a handful of brokers decided not to participate.
It Has Been Revised
If you are interested in real estate, you’ve probably heard about the NAR Lawsuit. The lawsuits allege that the NAR violates anti-trust laws by requiring sellers to pay commissions to buyer agents. This is unfair, as agents who work on behalf of buyers do very little business with sellers.
The NAR Lawsuit is an effort to restore competition in the real estate industry. It was filed by the Department of Justice’s Antitrust Division, which aims to preserve competitors in the industry.
It Does Not Resolve the Department of Justice’s Concerns
If you’re in the real estate industry, you know the NAR Lawsuit. The NAR brought the lawsuit against four corporate defendants in an Illinois federal court. The suit alleged that the compensation offered to list brokers was an illegal conspiracy that artificially inflated buyer costs. The plaintiffs were indirect purchasers of brokerage services. The plaintiffs have filed a new amended complaint alleging specific state laws. NAR will likely move to dismiss the amended complaint.
First, NAR’s VOW policy restricts competition. In some cases, this is not in consumers’ best interests. For example, traditional brokers can withhold listings for competitors due to the NAR’s policy. This inhibits innovation and discourages consumers from benefiting from new ways of competing.
