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The Justice Department is reportedly considering taking legal action against the National Association of Realtors (NAR) as part of an unprecedented clampdown on broker fees.

Commission, which can be as much as 5 or 6 percent of a property’s value, is usually shared down the middle between the two brokers representing the buyer and seller.

On the median $407,100 home sale in the US, a 5.5 percent commission amounts to about $22,390.

After a years-long investigation by federal antitrust enforcers, action is now on the cards, a person familiar with the issue told Bloomberg, to scrutinize the broker commission system. 

The NAR is a trade association of real estate brokers and agents in the US. It has over 1.5 million members – making it the largest professional organization in the country – and owns the trademark to the word ‘Realtor.’

The Justice Department is reportedly considering taking legal action against the National Association of Realtors. Pictured is the Main Justice Building where the Department is headquartered in Washington DC

A study by credit firm Self Financial found that this year the highest commission rates are in Ohio, Georgia and Missouri

The association has control of many of the country’s multiple listing services – platforms used by real estate agents and brokers to share information about properties for sale and find listings for prospective buyers. 

To use the system, NAR requires brokers to be members of the organization. Sellers must also offer compensation to the buyer’s representative. Critics say that inflates home prices.

A DOJ spokesperson declined to comment to DailyMail.com.

It comes after a study by credit firm Self Financial found that this year the highest real estate broker commission rates were in Ohio, Georgia and Missouri, with rates of 5.81, 5.76 and 5.72 percent respectively.

The reports of a potential antitrust trial come amid two separate private class-action suits brought against the National Association of Realtors in Illinois and Missouri.

The latter began on Monday and could result in as much as $4 billion in damages, according to the Bloomberg report. The former will see separate plaintiffs seek as much as $40 billion in a trial due to take place next year.

The commission-sharing structure equates to ‘collusion,’ Michael Ketchmark, the lead plaintiffs’ attorney in the Missouri case, told Bloomberg. ‘The day of accountability is coming.’

The NAR has been a target of DOJ scrutiny for some time now, beginning with a case brought during the Trump administration.

To settle that, the association agreed to measures such as increased price transparency, but later the Biden administration pulled out of that deal claiming it wanted to maintain the right to pursue further action against the NAR.

But a federal judge said earlier this year that the Department of Justice is still bound by that agreement – a decision the Department then appealed.

According to a brief filed by the Department in July, the federal agency was planning an ‘investigation of conduct that affects over $100 billion in broker fees paid by Americans annually’.

‘The Department of Justice’s Antitrust Division brings this appeal to restore its authority to investigate potentially anticompetitive rules, policies, and practices of the National Association of Realtors,’ the brief stated.

‘Because NAR rules govern most residential home sales across the nation, they can have a significant economic impact on one of the most important transactions in many Americans’ lives.’

The NAR has been a target of DOJ scrutiny for some time now, beginning with a case brought during the Trump administration. Pictured is the former president arriving to address the National Association of Realtors during a Legislative Meeting in 2019

Redfin is an online real estate firm that withdrew from the National Association of Realtors earlier this month, citing concerns about agent compensation.

‘We’ve paid more than $13 million in dues, in an effort to influence NAR to advocate for an open, technology-driven marketplace that would benefit consumers,’ it said in a release on October 2.

‘We’ll now explore other ways to advance those goals,’ it added.

Redfin CEO Glenn Kelman told Bloomberg that the company supported potential action from the Department of Justice.

In the worst-case scenario for the industry, the federal government could seek to ban sharing commissions, prohibiting sellers’ agents from compensating buyers’ agents. 

‘Our guess is that the lawsuits in Missouri and Illinois will not go that far, but it’s possible,’ he told the outlet. ‘We think that DOJ action is necessary to reach that level, and that would be a seismic change – basically, half the real estate agents in this country would be unemployed.’

DailyMail.com wrote to the National Association of Realtors for comment but did not immediately hear back.