A Missouri jury found the National Association of Realtors and other industry players guilty of colluding to maintain high brokerage commissions.
The jury awarded $1.785 billion in damages in the case, which was the smaller of two lawsuits concerning brokerage commission practices. In a third matter, the Justice Department is focused on a commission-sharing system that typically puts home sellers on the hook for a 5% to 6% cut of the sale, split between their agent and the buyer’s agent.
Also see: Real estate brokers pocketing up to 6% in fees draw antitrust scrutiny
The lawsuit, which was filed in Kansas City, Missouri, was against the Realtors association, Keller Williams and Berkshire Hathaway’s HomeServices of America.
“This is not the end,” Keller Williams said in a statement. The brokerage “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.”
Also see: Real estate agents, industry providers grapple with slowest market in 35 years
A representative for the Realtors group didn’t immediately respond to a request for comment on the verdict.
The legal battle surround a real estate commission structure largely unique to the US. It’s preserved by the association’s control of many of the country’s multiple listing services — an essential tool that aggregates properties available for sale in a given region. To use the system, NAR requires sellers to offer compensation to the buyer’s representative, which critics say inflates home prices.
Plaintiffs in an Illinois trial early next year are seeking as much as $40 billion.
The DOJ began investigating residential real estate under the Trump administration, and NAR agreed to measures, including increased price transparency, to settle the case. Biden officials in 2021 pulled out of that agreement, saying they wanted the ability to pursue future antitrust claims against the group, but a federal judge in January said the DOJ is still bound by that settlement. The department is appealing that decision, as the Biden administration expands antitrust scrutiny outside traditional areas.
- REAL ESTATE NEWSLETTER: Get our free ‘Home Stretch’ by email. SUBSCRIBE HERE!
Shares of real estate sales companies plunged after the news. Zillow Group was down 6% to $35.87 at 2:26 p.m. New York time. They earlier fell as much as 11%, the largest intraday decline since May 2022, after industry publications reported on the ruling. Brokerage shares also sank, with Compass Inc. falling 6.6%. Redfin Corp. dropped 7.3%.
