Jury finds real estate agents conspired to keep commissions high, awards $1.78B
Federal jurors in Missouri have awarded $1.78 billion in damages to home sellers. The verdict could be tripled to more than $5.3 billion under U.S. antitrust law. Image from Shutterstock.
Federal jurors in Kansas City, Missouri, awarded $1.78 billion in damages Tuesday to home sellers who alleged that the National Association of Realtors and residential brokerages conspired to inflate commissions paid to brokers representing buyers.
The verdict could be tripled to more than $5.3 billion under U.S. antitrust law, report Law360, Reuters, the New York Times and the Washington Post.
“How the ruling plays out remains to be seen, but it’s clear that the verdict—and the size of the damages—point to a shift in the way agent commissions are now paid,” the New York Times reports.
The plaintiffs in the class action lawsuit were home sellers who listed their houses for sale in multiple listing services for four geographic regions, according to the amended suit filed in May 2022. Those regions are the Kansas City metropolitan area, the St. Louis metropolitan area, the Southern Missouri area, and the Columbia, Missouri, area.
The suit covered home sales between 2015 and 2022.
According to the suit, access to a multiple listing service is conditioned on brokers following National Association of Realtors rules, including an “adversary commission rule” that requires seller brokers to make an “effectively non-negotiable offer” to pay buyer broker compensation.
Total broker compensation in the United States is typically 5% to 6% of the home sales price, with about half of the amount going to the buyer broker.
Many buyer brokers will not show homes to clients when the seller is offering a lower commission, the suit says. As a result, selling brokers have an incentive to pay higher compensation to buyer brokers. If buyers had to pay their brokers, the competition would lower the compensation, according to the suit.
Other defendants found liable Tuesday included Keller Williams and HomeServices of America. The National Association of Realtors and HomeServices of America planned to appeal, while Keller Williams is considering options for appeal, according to Reuters.
Defendants settling before trial were Re/Max, which agreed to pay $55 million, and Anywhere Real Estate, which agreed to pay $83.5 million. Anywhere Real Estate’s subsidiaries include Coldwell Banker and Century 21 Real Estate, according to the New York Times.
The settling companies also agreed that they will not set minimum commissions and will remove software that allows home listings to be filtered by broker compensation, according to Law360. The companies’ franchises and their agents won’t be required to join the National Association of Realtors.
A similar suit is pending in the U.S. District Court for the Northern District of Illinois, according to Law360.
