A federal jury on Tuesday found the National Association of Realtors, HomeServices of America, and Keller Williams liable for conspiring to inflate or maintain high commission rates.
The class action antitrust lawsuit was brought by home sellers in several Midwestern states, the Wall Street Journal reported. Initially filed in 2019, the complaint also included RE/MAX and Anywhere Real Estate. Both companies agreed to settle before trial for nearly $140 million combined.
After only a few hours of deliberations and a little over two weeks of testimony, the Kansas City, Missouri, jury found NAR and the brokerages liable and ordered them to pay $1.78 billion in damages. Antitrust rules allow the presiding judge to nearly triple the damages verdict to $5.36 billion. Judge Stephen Bough has not yet issued his final judgment.
The home sellers requested that the judge order changes to how the industry operates to prevent realtors and brokerages from inflating commission rates in the future. Plaintiffs argued that the current model stifles competition and hinders homebuyers and sellers from negotiating lower rates.
The plaintiffs’ lawyer, Michael Ketchmark, said, “NAR and corporate real-estate companies have had a stranglehold on real-estate commissions for too long.”
NAR spokesperson Mantill Williams stated that the trade association intends to appeal the jury’s verdict.
“We stand by the fact that NAR’s guidance for local MLS broker marketplaces ensures consumers get comprehensive, equitable, transparent and reliable home information and that brokerages of any size, service or pricing model get a fair shot at competing,” Williams stated. “We will continue to focus on our mission to advocate for homeownership and always put consumer interests first. It will likely be several years before this case is finally resolved.”
HomeServices of America, a subsidiary of Warren Buffett’s Berkshire Hathaway, also stated that it plans to appeal.
A spokesperson for the brokerage stated, “Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes.”
Keller Williams is weighing an appeal. According to Darryl Frost, a spokesperson for the brokerage, crucial evidence was not allowed to be submitted.
“We are disappointed that before the jury decided this case, the court did not allow them to hear crucial evidence that cooperative compensation is permitted under Missouri law,” Frost said. “This is not the end. Keller Williams followed the law regarding cooperative compensation and stands by the evidence presented on the 100-year-old practice of sellers’ agents offering commissions to other agents who help market and sell homes. Looking forward, we will consider all options as we assess the verdict and trial record, including avenues of appeal.”
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