Real estate suit draws Justice Department interest

KANSAS CITY, Mo. -- The Justice Department is looking into a Missouri class-action lawsuit accusing national real estate brokers of conspiring to charge excessive fees.

Attorneys in the department's antitrust division noted in a recent court filing it is investigating the matter, The Kansas City Star reported.

A pair of Kansas City law firms sued major residential real estate brokerage companies this year on behalf of Missouri residents who sold a house since April 2015, contending the real estate agents' common practices stifle competition and harm owners.

The suit took aim at mandates sellers pay the buyer's broker a commission, regularly an amount at or around 6% of the sale price of a house. It also alleges brokerage firms regularly charge inflated commissions. The lawsuit also challenges numerous listing services, which are databases of houses purchased and sold and only accessible to buyers and sellers represented by real estate agents. Those agents must follow the National Association of Realtors' rules, including the agreement sellers pay commissions of a purchaser's agent.

The association, a trade group for real estate brokers, and other brokerage houses, has filed a motion seeking to have the lawsuit dismissed. The group alleges, in part, the Justice Department had given its approval to the rules limiting access to multiple listing services when the two parties resolved a dispute in 2008.

The Justice Department, in an unusual filing of its type in a civil case, said the association erroneously portrayed the 2008 settlement.

"It cannot be overstated how damaging this is to the NAR's credibility with the court," said Brandon Boulware, a Kansas City attorney representing plaintiffs against the real estate group.

A footnote in the Justice Department's filing acknowledged the agency had issued a civil investigative demand -- an official request for records or information in an investigation -- related to a probe into residential real estate brokerages.

A spokesperson for the National Association of Realtors didn't return a message from the newspaper seeking comment.

The Missouri suit is comparable to one filed in Illinois some spectators have said could put the business model of residential real estate brokerages in jeopardy.

Information from: The Kansas City Star, http://www.kcstar.com