Redfin named in yet another commission lawsuit


Despite settlement agreements from Anywhere, RE/MAX, Keller Williams, Compass and the National Association of Realtors (NAR), the copycat commission lawsuits keep coming.

On Wednesday, plaintiff Rajninder (Raven) Jutla, who owns In Love Properties LLC, filed an antitrust lawsuit against Redfin in the U.S. District Court for the Eastern District of California in Sacramento.

Jutla is representing herself in the suit and she is not seeking class-action status. She is also filing the suit as both a home seller and a homebuyer.

Despite these differences, just like the other commission lawsuits, the Jutla suit takes aim at NAR’s Participation Rule, which requires listing brokers to make a blanket offer of compensation to buyer’s brokers in order to list a property on the Multiple Listing Service (MLS). Jutla notes that while Redfin no longer requires its agents to be members of NAR or local Realtor associations, all of the agents she worked with during her transactions were NAR members.

The complaint states that Jutla is bringing the action against Redfin “for unlawfully agreeing and conspiring to enact and enforce anticompetitive restrictions on Realtors contracting behavior, causing the Plaintiff to pay inflated buyer’s agent commissions on the sale of her home, as well as tandem purchase of a home in California.”

In May 2023, Jutla reportedly sold her Seattle home before purchasing a new property in California. She used Redfin agents for both listing and buying purposes. In the complaint, she claims that “anticompetitive collusion between Redfin, the buyer’s agent and his firm was in play” when she sold her Seattle home, and that her Redfin buyer’s agent in California “enjoyed a supracompetitive commission, which in her mind he did not earn.”

“Plaintiff was the one who identified the purchased property … and aside from customary drafting of an offer letter and two on site visits to see the home, the buyer agent did not earn the tens of thousands of dollars for commission to his Redfin firm either,” the complaint states.

In the complaint, the plaintiff notes that while she only paid her Seattle-based listing agent a 1.5% commission, she claims that she was “coerced” by her listing agent to offer a buyer’s agent commission of 4.5% because her agent told her that “a higher buyer commission rate will attract the agent to show your home otherwise they will ignore it.”

She states that she learned after the sale of her house that “she had been duped by the 1.5% seller commission when it was after signature of the Seller Agent contract moot because 6% of commission sharpen still occurred.” 

The plaintiff also claims that the same listing agent gave her a “low ball recommended sales price.”

According to the complaint, the four agents who participated in Jutla’s two transactions made a total of $105,969 in commissions, which she feels is inflated for the work they did.

“This amount would never be earned if the actors were paid a rate of $1000/hr wages for the time billable,” the complaint states.

In citing the Freedlund suit, which was filed against Redfin, NAR and the California Association of Realtors in February, Jutla wrote that the “defendant’s illegal collusion has the inevitable effect of forcing home sellers like plaintiff to bear a cost — buyer’s side commissions — that in a competitive marketplace lacking Defendants’ collusion would be borne by the buyer, if at all.”

She added that “absorbing the broker commissions on the sale price of the home is problematic, in part because it causes the Buyer agents (possibly the Sellers agents in secret to encourage lowering sale price as occurred with the Plaintiff) to encourage buyers to bid higher.”

Jutla is demanding a jury trial and damages.

“For its entire two-decade history, Redfin has existed to give real estate consumers a better deal. We’ve saved consumers more than $1.6 billion in real estate fees,” a Redfin spokesperson wrote in an email. “We’ve advocated for reforms to make real estate more transparent and drive down commissions. While Redfin hasn’t been served in this case, we’ve reviewed the complaint and will vigorously defend against the allegations. And as we’ve stated before, we don’t belong in any of these lawsuits. There is a complete disconnect between our business model and claims that we conspired to maintain inflated commission rates.”



Source link

About The Author