Buyer (agents) beware: Las Vegas Valley realtors react to looming lawsuit

Buyer (agents) beware: Local realtors react to looming lawsuit
Published: Aug. 16, 2023 at 11:42 PM PDT
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LAS VEGAS, Nev. (FOX5) - A class-action lawsuit filed by home sellers that would fundamentally change the way houses are bought and sold, and in particular, the way real estate agents are compensated, is catching the attention of local agents.

Currently, no matter how much experience a buyer’s agent has in the real estate industry, they get the same commission from the seller that a seasoned veteran does. A case in Illinois known as Moehrl v. National Association of Realtors would change that if the plaintiffs win.

The plaintiffs filed suit against NAR and several major real estate brokerage companies, claiming the system that splits commissions paid by the seller between buyer and seller agents is anticompetitive. Instead, the plaintiffs argue, homebuyers should pay for their own agents.

One local agent who has more than two decades of experience in Southern Nevada says this will cause buyers to become much pickier and could drive many new agents out of the industry.

“If this lawsuit goes through, it would probably cut the agent count from 1.6 million to about 200,000,” Las-Vegas based real estate agent Steve Hawks told FOX5 Wednesday. “It’s going to impact agents that aren’t experienced.”

Hawks says this lawsuit will take away a big advantage for inexperienced realtors if the plaintiffs win.

“If you’ve been in the business one day or 30 years, when you do a transaction on the MLS (Multiple Listing Services), you’re getting paid the same amount,” he explained.

If the plaintiffs win, Hawks says that even playing field is going away because if buyers alone are on the hook for those fees, they’ll want to work with someone with more experience.

“In the future, when the buyers see that it’s going to cost them money one way or the other with their agent, they’re going to start interviewing their buyer’s agent similarly to how sellers do their listing agent,” he said.

Jaime Solorzano is the valley’s newest realtor, having just earned his real estate license Wednesday.

“It doesn’t scare me,” he said of the potential outcome of the lawsuit. “There’s many obstacles you always have to overcome. That doesn’t put fear in me.”

Solorzano thinks the local market is hot enough that he’ll be able to make it despite the potential loss of his biggest advantage as a new agent.

“It’s actually going to become even better,” he said of the Las Vegas real estate market. “People are attracted over here more. People are coming in often, often. Way more than usual.”

Hawks is not so optimistic. He cited data that shows 74% of home buyers choose the first agent they come into contact with because they see it as a free service and that this practice will change pending the outcome of the court case.

“Now the buyers’ agents will be compensated based on their experience and knowledge and the buyers will be actually paying them and interviewing them much like a seller does on the listing agent,” Hawks explained.

Hawks predicts Moehrl v. National Association of Realtors will be decided sometime in 2024.