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A major class action lawsuit against real estate agencies could be bringing massive changes to how homes are bought and sold. And if you sold a home in the past few years, you could get money from it. This lawsuit is called Burnett et al. v. National Association of Realtors, et. al., and it made news headlines in November 2023 when a federal jury handed down a verdict for $1.8 billion of damages against the National Association of Realtors and two real estate brokerage firms.
Why did these real estate organizations get sued? The plaintiffs (lawyers representing a large group or "class" of home sellers) argued that real estate agencies and the National Association of Realtors have been using illegal, anticompetitive business practices. The jury agreed.
Let's look at what the real estate commission class action lawsuit means for you -- and how you can get money from it.
What is the real estate agent commissions lawsuit about?
Class action lawsuits are often incredibly complicated. This one focuses on a simple question: How much should real estate agents get paid for the sale of a home, and who should pay them?
Here's how real estate sales usually work: the home seller and home buyer both have their own real estate agents (for buyer and seller) who split a combined commission that is typically 6% of the sale price. So if a home sells for $400,000, the real estate commission amounts to 6% of that, or $24,000. The seller's agent gets $12,000 (3% of the sale price) and the buyer's agent gets $12,000 (3%).
The plaintiffs in the Burnett class action lawsuit basically argued that sellers shouldn't have to pay the commission for the buyer's agent, and that real estate commissions shouldn't have to be 6%. In a truly competitive market for real estate sales, 6% would not be a standard, fixed commission for every home sale. Instead of splitting commissions with each other, real estate agents might have incentives to get more business by offering lower commissions, or negotiating more aggressively for home buyers to drive down the price.
High sales commissions have already disappeared in many other areas of life. Most online brokerages no longer charge commissions for buying stocks, and online travel sites help customers get lower-cost airline tickets and hotels without a travel agency commission. In the same way, lower real estate commissions could drive down costs for home buyers and sellers.
But because real estate agencies tend to have so much control over the process of selling homes, and real estate agencies own the multiple listing services (MLS) to show homes that are available for sale, the federal jury found that the current way of doing business in real estate is anticompetitive and unfair to customers. The lawsuit claims that, by keeping real estate sales commissions unfairly high, real estate brokers and agents have been violating antitrust law.
Why home sellers could get money from this lawsuit
Instead of helping home buyers and sellers get the best deal on each real estate transaction, the lawsuit claims that these unfair business practices have allowed real estate agents to keep too much money for themselves -- and home sellers want some of that cash back.
There are already a lot of extra costs of homeownership, like homeowners insurance and property taxes. If the cost of selling a home has been pushed too high by unfair business practices in the real estate industry, home sellers deserve to be compensated.
The jury agreed with the Burnett class action plaintiffs. The $1.8-billion verdict found that real estate agents and brokers have effectively been overcharging for their services in selling homes, in a way that goes against the rules of America's free market. Some real estate agencies and brokerages have agreed to settle the lawsuit, instead of continuing to appeal and fight the case in court -- these companies have not admitted to any wrongdoing, but have agreed to pay about $208 million of settlements.
Who gets money from the real estate commission settlement
If you sold a home during a certain timeframe within the past few years, you could be eligible to get some money from the $208-million settlement of this class action lawsuit.
Here's the three-part test to see if you can get money:
- You sold a home during the eligible date range (exact dates depend on the home's location, but could include the years 2014-2024)
- The home you sold was listed on a multiple listing service (MLS) in the U.S.
- You paid a commission to any real estate brokerage in connection to the sale of the home
Learn more atRealEstateCommissionLitigation.com. If you want money from this lawsuit settlement, you must go to the website and submit a claim form by May 9, 2025. The site will ask you to provide details about the sale of your home and any real estate commissions you paid as part of the sale.
Bottom line
If you recently sold a home, check out RealEstateCommissionLitigation.com to see if you are eligible for a payment from the class action lawsuit settlement. This lawsuit could mean the end of the 6% real estate commission. Lower commissions on real estate sales are likely bad news for real estate agents, but potentially good news for anyone buying or selling a home.
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