A jury in Missouri has found the National Association of Realtors (NAR) and several residential brokerages liable for conspiring to artificially inflate commissions for home sales, resulting in a staggering $1.78 billion in damages. The potential payout may escalate to $5 billion, factoring in the treble damages made possible by the verdict.
Warren Buffett’s Berkshire Hathaway-owned HomeServices of America, its two subsidiaries, and Keller Williams Realty were among the other real estate groups found guilty of participating in the conspiracy.
At the heart of the case were home sellers’ objections to an association rule mandating them to offer a nonnegotiable commission to buyers’ agents before listing a home online, typically ranging from 5% to 6%. The plaintiffs argued that this rule stifled competition and increased home prices. The verdict, however, liberates sellers from being compelled to pay buyers’ agents while agents gain the autonomy to set their commission rates.
The landmark decision paves the way for potential similar lawsuits to surface in other states.
This week, a lawsuit was filed in Missouri against the association and other brokerages, including Redfin, Compass, and Douglas Elliman. The suit contends that the rule requiring home sellers to pay commissions to buyers’ agents infringes upon the Sherman Antitrust Act.
The case dates to 2019, when a group of home sellers initiated legal action against the National Association of Realtors and various residential brokerages. While Anywhere Real Estate and REMAX Holdings were initially named as defendants, both parties settled for a cumulative $140 million before the commencement of the trial, according to reports from the Wall Street Journal.
Michael Ketchmark, the lead attorney for the plaintiffs, hailed the verdict as “a tremendous day of accountability for these companies.”
In response to the ruling, NAR President Tracy Kasper stated that the matter is far from concluded. She said the association intended to appeal the liability finding, emphasizing their belief that NAR rules serve the best interests of consumers, foster market-driven pricing, and promote healthy business competition. Additionally, Kasper indicated that they remain optimistic about prevailing in the case. In the interim, NAR plans to request a reduction in the damages awarded by the jury.
Kasper further highlighted in court that NAR’s rules ultimately benefit consumers and ensure the efficiency, transparency, and equity of local MLS broker marketplaces. The cooperative compensation rule, she argued, allows sellers to achieve higher prices for their homes and exposes them to a broader pool of potential buyers. Additionally, buyers gain increased access to more homes and representation options.
“We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing, and advance business competition,” Kasper said. “We remain optimistic we will ultimately prevail. In the interim, we will ask the court to reduce the damages awarded by the jury.”