The National Association of Realtors and several real estate companies were ordered to pay $1.8 billion in damages after a federal court in Missouri ruled Tuesday that they conspired to artificially inflate agent commissions.
In addition to the broker association, defendants in the case include Keller Williams, Berkshire Hathaway’s HomeService of America and two of its subsidiaries. The verdict came after a two-week trial in federal court in Kansas City.
The plaintiffs alleged that the association and other defendants colluded to increase the commission sellers pay to agents representing homebuyers. Course participants include the sellers of hundreds of thousands of homes in Missouri and parts of Illinois and Kansas between 2015 and 2012.
Michael Ketchmark, the plaintiffs’ lead attorney, told CBS MoneyWatch he expects the jury’s award under U.S. antitrust law to triple to more than $5 billion.
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“Today was a day of accountability — the NAR has long used its market power to put a stranglehold on home ownership,” Ketchmark told CBS MoneyWatch.
“It costs two to three times more to sell a home in the United States than in other developed countries,” the lawyer said, pointing to practices outlined in the lawsuit that force the seller to pay agent commissions of up to 6%. .
Two other brokerages, Re/Max and Anywhere Real Estate, settled with plaintiffs earlier this year, paying a combined $138.5 million and agreeing to stop requiring brokers to belong to the NRA.
HomeServices expressed disappointment at the ruling and promised to appeal.
“Today’s decision means buyers will face even greater obstacles in an already difficult property market and sellers will find it harder to realize the value of their homes. It could also force homebuyers to forego professional help during what is likely the most complex and difficult period “The most important financial transaction they will make in their lives,” a spokesperson told CBS MoneyWatch in an email. “Cooperative compensation helps millions of people achieve the American dream of homeownership with the help of real estate professionals.”
Keller Williams said it would consider its options, including an appeal. “This is not the end,” a spokesperson said in an email.
In one post On social media, the NAR vowed to appeal the liability finding. “We remain optimistic that we will ultimately prevail. In the meantime, we will ask the court to reduce the damages awarded by the jury,” NAR President Tracy Kasper said in a statement.
Shares of real estate companies not named in the lawsuit plunged after the ruling in a case that questioned widespread industry practices. Zillow fell 7% and Redfin ended the day down nearly 6%.
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