Jurors this week awarded home sellers $1.78 billion in damages for an alleged conspiracy between the National Association of Realtors and residential brokers to inflate broker commissions.
The class action lawsuit was brought by home sellers who listed their houses in multiple listing services for the Kansas City metropolitan area, the St. Louis metropolitan area, the Southern Missouri area, and the Columbia, Missouri area, and sold them between 2015 and 2022.
In order to list their houses, the suit states, brokers for home sellers were required to offer to pay compensation, usually about two or three percent of the home sales price, to the buyer broker. In addition, according to the plaintiffs, buyer brokers often will not show homes to clients when a seller is offering a lower commission. If buyers paid their own brokers, the plaintiffs argued, the compensation would not be so high.
The defendants found liable include the National Association of Realtors, Keller Williams, and HomeServices of America (owned by Berkshire Hathaway). Re/Max and Anywhere Real Estate (whose subsidiaries include Coldwell Banker and Century 21) settled before trial, for $55 million and $83.5 million, respectively. In addition to monetary compensation, the settlement included an agreement not to set minimum commissions and to remove software that filters listings by broker compensation. The National Association of Realtors and HomeServices of America plan to appeal.
“We stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition,” National Association of Realtors President Tracy Kasper said in a statement after the verdict.
Under U.S. antitrust law, the verdict may be tripled to over $5.3 billion.
Immediately after the verdict, another lawsuit was filed in Missouri asserting that the rule requiring home sellers to pay buyer broker commissions violates the Sherman Antitrust Act. According to the ABA Journal and Law360, a similar lawsuit is pending in the U.S. District Court for the Northern District of Illinois.
The U.S. Department of Justice has investigated the National Association of Realtors in the past for conduct potentially impacting competition in the real estate market and harming home sellers and buyers. According to the DOJ, American home buyers and sellers paid over $85 billion in residential real estate commissions in 2020.
Additional Reading
Jury finds real estate agents conspired to keep commissions high, awards $1.78B, ABA Journal (November 1, 2023)
Realtors found liable for $1.8 billion in damages in conspiracy to keep commissions high, CNN (October 31, 2023)
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