The powerhouse law firm Hagens Berman goes fishing in real estate, the pond that keeps on giving. But this time… I’d like to know what they’re thinking.
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[I have a business relationship with Compass, but as always, they don’t even know I’m writing this post never mind having any influence on it.]
If you follow certain segments of RE.net, you’ll learn that there’s a bit of excitement that Hagens Berman, one of the big plaintiff class action law firms behind Moehrl and Sitzer, is looking for potential plaintiffs to file a big class action lawsuit against MRED and Compass.
From the law firm’s website:
Hagens Berman’s antitrust attorneys are investigating class-action claims on behalf of Chicagoland homebuyers who may have overpaid for their homes because of an alleged monopoly over the local real estate listing market.
Attorneys believe that Compass and Midwest Real Estate Data (MRED) together hold a 98% share of the real estate listing market in Chicago, and that they use that control in ways that inflate what buyers pay. The alleged effect is twofold. Most buyers are shut out of privately listed homes entirely, never learning those properties are for sale. And for the properties that do eventually transition to the open market, buyers allegedly arrive without the information that helps set a fair selling price, including how long a home has actually been on the market, which is normally a public data point.
Without days-on-market data, buyers can’t tell an overpriced listing from a fairly priced one. Attorneys allege that Chicago area homebuyers have been paying the difference. [Emphasis in original]
Interesting.
Now, I respect Hagens Berman immensely. Their track record speaks for itself. So sure, it’s always a bit of a sphincter-constricting moment if you hear that HB is investigating you.
In this case, however, I am super curious what the theory here is. And I am further curious that Hagens Berman is doing this after the court issued its Fatality ruling in the Zillow v. MRED case.
Of course, we don’t have any actual court filings to look at. All we can go by is the press coverage and this website. So since I’m bored, let’s take a look at what the possible theories are and why they’re… ah… problematic.
As always, I am not your lawyer, none of this is legal advice, and you should consult your own attorney for any real advice.