One of the foundational elements of MLS, the "Offer of Compensation" could be in jeopardy... MLS Litigation...and a Paradigm Shift
While it is important not to read too much into this motion to dismiss, as dismissing a motion has a very high bar, it is none the less a significant move on cases now being litigated that could turn the Industry upside down, if the Industry is not prepared for an outcome that has the potential to change the nature of the current fee and representation model. This is something I know our online communities have been discussing longer than many of us want to remember.
There are a number of legal cases against NAR right now that have the potential to disrupt the current world of MLS and residential real estate sales. We are talking about "Class Action" lawsuits where the plaintiffs are represented by the law firms that fought against the tobacco industry, and won. It may not sound like much, but it could be a very big deal.
Remember the Paradigm Shift Questions: What is currently possible to do in your business, and if it were impossible, it would FUNDAMENTALLY change the way you do business?"
What if the future and final rulings in these cases disallow the MLS "Offer of Compensation" to cooperating brokers?
Are you prepared to negotiate commissions with buyers? What is the damages in the case are enough to cripple the MLS world?
What if there were no longer MLS as we know it? Doomsday scenario? Maybe.
Too early to speculate? Maybe.
But my business partner of the last 25 years, real estate attorney John Reilly and I are going to continue to research, consider, and render our own opinions, as we did in the DOJ/NAR case of 2008, and as I am sure you will as well :-)
While the final outcomes may be a few years down the road, the time to consider possible outcomes is before they become reality.
Here is a headline from a recent Andrea Brambila Inman New Article on the subject: "Judge denies motion by NAR to dismiss buyer commission lawsuit Judge Andrea Wood argued that the plaintiffs would have paid 'substantially lower commissions' if not for the buyer broker commission rules."
Also from the article: “The outcome could create one of the paradigm shifts we have all been discussing for years,” Saul Klein, industry veteran and executive editor of Realty Times, wrote in response to an Inman Coast to Coast Facebook post about the judge’s order, adding that the case and other related class-action lawsuits should get more industry attention than they have received."
