Appeals Court Grants DOJ Authority to Reopen Antitrust Probe into National Association of Realtors

Appeals Court Grants DOJ Authority to Reopen Antitrust Probe into National Association of Realtors

An appeals court has granted the Department of Justice (DOJ) the authority to reopen an antitrust investigation into the National Association of Realtors (NAR), according to a recent court ruling. The ruling, made by a panel of judges from the District of Columbia Circuit Court of Appeals, overturned a lower court’s decision that had previously set aside a 2021 investigative subpoena issued by the DOJ’s Antitrust Division, related to NAR’s policies on commission and choices of home sellers. The decision allows the DOJ to continue its investigation into potential antitrust behavior by the real estate trade organization.

Background: DOJ’s Previous Investigation and NAR’s Settlement

In the Trump administration, the NAR had reached a settlement with the DOJ regarding the investigation. However, the Biden administration discontinued the settlement deal and decided to pursue the investigation further. In 2023, a lower court prohibited the Biden administration from continuing the investigation. The recent court decision now reverses that ruling and enables the DOJ to proceed with its probe into potential antitrust practices.

High Commission Rates and Unaffordable Home Prices

At the heart of the legal battle against the NAR are the high commission rates imposed on home sales, which are paid by the buyer and contribute to the increasing unaffordability of homes. Recently, the realtor association reached a settlement of $418 million with home sellers over commission rates[1].

DOJ’s Stance and Reaction from NAR

In a statement released by the DOJ on Friday, Jonathan Kanter, assistant attorney general of the DOJ Antitrust Division, expressed the DOJ’s commitment to investigating potentially unlawful conduct by NAR that may contribute to high real-estate commissions in the United States[2]. Meanwhile, the NAR responded to the court ruling in a statement to Politico, indicating that it is evaluating potential next steps and emphasizing the importance of enforcing the terms of government contracts[3].

Conclusion

The court’s decision to grant the DOJ authority to reopen the antitrust probe into the NAR marks a significant development in the ongoing investigation. With the investigation back in motion, the DOJ aims to address the issue of high real-estate commissions, which contribute to the escalating prices of homes. The NAR, on the other hand, is considering its options and evaluating the implications of the court ruling. Continued scrutiny on the practices of the real estate trade organization may have a lasting impact on the industry and potentially lead to reforms aimed at improving affordability for homebuyers and sellers alike.

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