Kirkland, Washington-based Northwest MLS (NWMLS) is looking to have its voice heard in a lawsuit all the way on the other side of the country.
On Wednesday, NWMLS filed a motion asking Boston-based U.S. District Court Judge Patti B. Saris, who is overseeing the Nosalek commission lawsuit, if it could file an amicus curiae brief in response to the Department of Justice’s statement of interest.
Saris would have to reopen the lawsuit in order for NWMLS to file its brief. The judge stayed the case pending action by a multidistrict litigation panel, which is set to decide this spring if nine of the commission lawsuits can consolidate.
The DOJ’s statement of interest, which was filed in mid-February, was in relation to the settlement agreement reached between the Nosalek plaintiffs and MLS Property Information Network (MLS PIN) in July 2023.
In its statement of interest, the DOJ advocated for the prohibition of cooperative compensation, meaning that “sellers would be responsible for determining only the compensation of their own broker in the listing contract … [and] buyers would be responsible for determining the compensation of their own broker in a buyer-broker representation contract.”
The DOJ argued that changes similar to those proposed in the settlement agreement — including the lowering of the required compensation amount to $0, or abandoning the requirement for listing brokers to make a blanket offer of compensation to the buyer’s broker in order to list on the MLS, which was a change NWMLS made in 2019 — have done nothing to decrease agent commissions.
In the draft of the proposed brief submitted to the court, NWMLS claims that the DOJ’s “ill-informed, ill-supported critique“ of its rules “obscures, or misses altogether, the purpose and impact of NWMLS’s changes.“ NWMLS counters that these rule changes increased transparency and removed the potential for steering.
“The change enabled greater flexibility and choice for sellers when listing a property and gave buyers and buyers’ brokers a vehicle for negotiating for compensation when making an offer to purchase,“ NWMLS wrote in the filing.
The MLS added that in the DOJ’s argument about steering, it did not acknowledge that the rule changes also made information about sellers’ offers of compensation available to other consumers.
NWMLS also noted in the motion that in its November 2020 settlement agreement with the National Association of Realtors, the DOJ asked for the types of changes made by NWMLS.
“DOJ’s apparent change of heart in its [statement of interest] in this case is striking,“ NWMLS wrote in the draft of its brief.
The MLS also notes that the system of compensation the DOJ outlines in its statement of interest, which it feels prohibits sellers from making offers of compensation to buyer brokers, removes transparency and “invites brokers to make deals in secret, creating opportunities for deceptive practices, discrimination and unfair housing.“
MLS PIN and the plaintiffs in the Nosalek lawsuit have also asked Saris if they can file separate responses to the DOJ’s statement of interest. The parties have until March 28 to file their responses.
As a lender looking at this…I agree with NWMLS. The reason of Cost of buying does not go up because of Buyer side realtor commission…it is very little. Nevertheless, if this ridiculous rule stays, then mortgage lenders with HUD and GSE’s will have to look at Buyers Realtor Commission paid by the buyer as Borrowers Funds and give credit towards Downpayment etc….because these will now become Borrower Funds. Lack of this change will make cost of buying even more higher or riskier for the buyers, who might go into a purchase without any representation. All properties that are trying to be Sold are not Peach….we have seen those appraisals, those inspection reports, those repair demands etc…. I am sure we can look out for the unsuspecting buyers and sellers’ interest with middle of the road decision. But I like what NWMLS is pointing out and I agree with NWMLS!!: (Not a realtor, but work with a lot of them)