Realtors found liable for $1.8 billion in damages in conspiracy to keep commissions high
On Tuesday, a Missouri jury found the National Association of Realtors and some residential brokerages liable for nearly $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high, according to reports from CNN.
The lawsuit covered home sales that took place between April 2015 to June 2022.
“We view it as a tremendous day of accountability for these companies,” Michael Ketchmark, the lead attorney for the plaintiffs, told CNN
However, despite the verdict, NAR said the matter is far from resolved.
“This matter is not close to being final. We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition,” NAR president Tracy Kasper said.
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Kasper told CNN that the NAR “can’t speak to the specifics” of its basis of appeal until it is filed. “In the interim, we will ask the court to reduce the damages awarded by the jury,” she added.
Warren Buffett’s Berkshire Hathaway-owned HomeServices of America and two subsidiaries, as well as Keller Williams Realty, were among the other real estate groups the jury found guilty of conspiring.
A spokesperson from HomeServices told CNN the company is “disappointed with the court’s ruling and intends to appeal.”
“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,” the spokesperson said.
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Jaret Seiberg, a housing policy analyst at TD Cowen, told CNN that the appeals process could take up to three years. The losing party would then likely attempt to have the case tried by the Supreme Court.
However, he said Tuesday’s verdict does not mean “buyer commissions are a thing of the past.”
The judge presiding over the case will have to decide the scope of the injunction, which could end up amounting to “minor tweaks” to the current commission-sharing system. “If that is the case, then the impact may be limited as we expect most brokers will continue to offer commission sharing to boost interest in the property,” Seiberg. added.
CNN said minutes after Tuesday’s victory, Ketchmark filed a new class-action lawsuit against real estate companies including Douglas Elliman, Compass and Redfin. The new suit also alleges the companies violated antitrust laws by conspiring to keep commissions high.
Douglas Elliman and Compass declined to comment on the new case. Redfin CEO Glenn Kelman labeled it “a copycat lawsuit.”
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