Real estate agents are still missing the mark on price fixing post lawsuit

The lawsuit in a nutshell

Here’s what happened: The National Association of Realtors® (NAR) was sued for antitrust violations, specifically, for so-called “price-fixing.” The crux of the argument, made by attorney Michael Ketchmark (and the jury agreed), was this: When listing agents go on appointments, they were asking homeowners to pay a commission that covers both the listing agent’s fee andthe buyer agent’s fee. This “full fee” is baked into the listing agreement. Then, when the home hits the MLS, that buyer agent’s fee was publicly displayed and offered out to all competing brokers.

In other words, we weren’t just advertising a commission, we were locking homeowners into paying a fixed fee to any broker who brings a buyer, essentially standardizing compensation across competing companies. That’s where the price-fixing argument comes in.

What is price-fixing?

Here’s the deal: Price-fixing is when competitors agree to set prices instead of letting the market decide. Think of it like this: If McDonald’s and Burger King got together and said, “Let’s both charge $4.99 for a cheeseburger, so nobody competes on price,” that would be textbook price-fixing. Consumers lose out, and competition is squashed.

In real estate, when we ask homeowners to commit (in writing) to offering a specific percentage of the commission to any agent from any competing brokerage who brings a buyer — and then blast that offer out on the MLS — we’re not that far off from the burger example. We’re setting a standardized, industry-wide fee for buyer brokers, whether that’s the intent or not.

The heart of the violation. It wasn’t just the MLS

Here’s where a lot of folks are missing the point: The violation didn’t happen just because we posted the commission offer on the MLS. That was just the vehicle — the megaphone.

The real “gotcha” moment — the violation — was when the homeowner signed the listing agreement committing to a specific selling broker fee, with the understanding that this fee would go to any competing broker who brought a buyer. The MLS was just how we told everyone about it. The root problem? We created an industry norm and locked consumers into it before the house ever hit the market.

In fact, this is the actual legal theories that won the Moehrl and Burnett cases. In both lawsuits, the plaintiffs argued that the harm occurred at the very moment a seller signed the listing agreement, committing upfront to a buyer’s broker fee. Even the American Bar Association’s Antitrust section highlighted this exact issue, summarizing that the home-seller plaintiffs “alleged that NAR rules requiring seller brokers to offer compensation to buyer brokers violated antitrust laws by eliminating competition that could’ve lowered fees among buyer brokers.”

In other words, by forcing every seller to promise a fee to any buyer’s broker in advance, the industry’s rules killed off the normal competitive process where buyers and their agents negotiate fees individually.

Yet, many in the industry continue to miss this crucial point, setting us up for another potential legal disaster.

The settlement: MLS commission offers are out

As part of the NAR settlement, we can no longer advertise the buyer broker commission on the MLS. Simple enough, right? Not quite.

Some agents and brokerages have tried to get creative, putting the commission offer on yard signs, flyers, or even whispering it in private messages. Michael Ketchmark has already said, on record, that he’s watching — and more lawsuits will follow if this continues. The lesson here: changing the place where you advertise the fee doesn’t change the fact the violation is occurring.

Are we setting ourselves up for the next lawsuit?

Here’s the kicker — and every board, association, and brokerage needs to pay attention: The real legal risk isn’t where you’re posting the commission. The problem is having any language in your listing agreements that locks homeowners into paying a set fee to the buyer’s broker. That’s exactly the kind of behavior the courts have already labeled as price-fixing.

Shockingly, many Boards and Associations still haven’t gotten the message. They’re actively encouraging their members to keep asking homeowners to commit upfront to a fixed buyer-agent commission, which clearly goes against the core of the antitrust ruling. 

These associations aren’t just playing with fire; they’re practically inviting another legal smackdown by ignoring the lesson our industry just learned the hard way.

Final thoughts: Time for real change

If the goal is to move away from price-fixing allegations, we can’t just play “hide the commission.” We have to let the market (buyers, sellers, and their agents) negotiate compensation like any other business. If we don’t, we’re not only ignoring the lesson from the lawsuit—we’re begging for another one.

It’s time for the real estate industry to face facts, ditch the old templates, and put transparency and negotiation front and center. Anything less is just setting ourselves up for another legal smackdown.

Have thoughts, questions, or a take of your own? Sound off in the comments below.

Darryl Davis, CSP, has spoken to, trained, and coached more than 600,000 real estate professionals around the globe. He is a bestselling author for McGraw-Hill Publishing, and his book, How to Become a Power Agent in Real Estate, tops Amazon’s charts for most sold book to real estate agents.

This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.

To contact the editor responsible for this piece: tracey@hwmedia.com