The Supreme Court will take up the issue offered by plaintiffs that the National Assoc. of Realtors, based in Chicago,IL., has violated the Sherman Antitrust Act(that old act named for the distinguished brother of a more distinguished Sherman-Gen. William Tecumseh Sherman, liberator of the southern Rebel States). Plaintiffs will argue that policy and practice of the N.A.R. harm clients and brokers who must pay fees to access not only the term "Realtor", but also the information regarding sales price(s) and agency fees paid to the agents of buyers and sellers.
Recent leadership changes(resignations at the top) have focused on internal rot. The hubris noted among N.A.R. leadership apparently took over what had been a respected professional association, dedicated to service in an industry plumped up by inflationary figures across the real estate landscape. Must a 6% commission exist in a multi-million dollar transaction that requires little professional oversight? Hardly.
An initial lower court ruling was over turned by the 9th Circuit Court(out West). That decision has now been kicked upstairs to the Supremes. Comments from the 9th Circuit indicate that both buyers and sellers have been harmed by monopolistic practice of the N.A.R. Additionally, the N.A.R. has convinced sitting members of Congress that their practice(s) are legal. (See Sen. Al Padilla(D-Cal) and his donor list). Redfin has disassociated itself from the N.A.R., saying that the rules do not favor agents. Many more groups are following that lead. Fines have already been imposed in the millions.
The business bible, The Wall Street Journal has come out in favor of plaintiffs case- a rarity in the business world of finance. The editorial lists many of the broad reasons that the case has merit on its face. It's too soon to predict the decision, but early work seems to support plaintiffs.
Sen. Al Padilla is sleeping less these nights.
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