Class action attorneys will soon begin to notify members of the class in the Sitzer/Burnett class action lawsuit in Missouri. Plaintiffs in this class action lawsuit are raising questions about how broker compensation is paid. Although the judge granted class certification in the case in April, the ruling was procedural and does not reflect on the actual or perceived merits of the plaintiffs’ claims. As is common and expected, class action attorneys now begin to notify members of the class of their right to opt out, even before the validity of the case has been decided.
The message of the notices is: The Sitzer/Burnett v. NAR lawsuit may have an impact on the rights of anyone who recently sold a home in or near Missouri using a real estate agent and paid compensation to the buyer’s representative. The targets of these notices will be anyone who sold a home after April 29, 2014, via the MLSs in Columbia, Mo., Kansas City, Mo., Springfield, Mo., or St. Louis (and after April 29, 2015, in Kansas City, Kan., or in Illinois near St. Louis).
The question in the case of Sitzer/Burnett v. NAR is why brokers representing home sellers often pay the compensation of brokers representing home buyers. This practice underpins local broker marketplaces where brokers compile centralized listings of all properties for sale and invite other brokers to cooperate in finding a buyer.
What’s the background on the Sitzer/Burnett case?
Three years ago, NAR and four corporate defendants were sued in class action lawsuits filed in Illinois and then Missouri alleging that home sellers are damaged when their listing broker offers to compensate the buyers’ representative. The lawsuits falsely allege that various NAR guidelines and our members’ adherence to those guidelines have led to artificially fixed and inflated commissions being paid to real estate professionals.
Where does the case stand now?
In April, a federal judge in Missouri granted class certification in the case, but this in no way reflects on the actual or perceived merits of their claims. The ruling was procedural in what is yet to be a lengthy process and now allows others who have allegedly been affected to join the litigation as plaintiffs. As is common and expected, class action attorneys now begin to notify members of the class of their right to opt out of the class via direct mail, advertising and press stories, even before the validity of the case has been decided.
Should members/NAR be concerned about this class action lawsuit?
NAR expects the class action to gain some attention and it’s possible current and/or former clients may reach out for more information. You can direct consumers with questions about the Sitzer/Burnett case to www.realestatecommissionfacts.com.
What can members do?
NAR highly encourages the continued use of Buyer Representation Agreements in order to formalize a working relationship with clients and detail what services consumers are entitled to and what the buyer agent expects from their client in return. They also encourage members to remind clients that there are no fixed commissions and that they are negotiable at any point in the transaction.