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A Missouri jury handed down a verdict Tuesday afternoon that could upend the residential real estate industry and slap its biggest trade group and several major brokerages with at least $1.8 billion in fines.
The federal antitrust lawsuit accused the National Association of Realtors and brokerage franchisors Keller Williams and HomeServices of America of conspiring to keep agent commissions high and bump up how much homeowners had to pay seller and buyer agents when selling their property.
Anywhere Real Estate – parent to a diverse set of brokerage brands like Sotheby’s International and Century 21 – and RE/MAX were also named in Sitzer et al. v. National Association of Realtors et al. but settled earlier this month for a combined $138.5 million and a series of changes to their in-house rules around commissions and NAR membership.
According to court filings, the jury found against NAR, Keller Williams and HomeServices of America and awarded $1.79 billion in damages to the home sellers who brought the suit, a figure that could be tripled under antitrust rules if the judge so decides. The plaintiffs had also asked the judge to force NAR and the two brokerages to change their business practices around agent compensation.
In an email, NAR spokesperson Mantill Williams said the association planned to appeal, calling the case “not close to being final,” and planned to ask the court to reduce the damages awarded by the jury.
“NAR rules prioritize consumers, support market-driven pricing and promote business competition,” Williams wrote. “We stand by the fact that NAR’s guidance for local MLS broker marketplaces ensures consumers get comprehensive, equitable, transparent and reliable home information and that brokerages of any size, service or pricing model get a fair shot at competing. We will continue to focus on our mission to advocate for homeownership and always put consumer interests first. It will likely be several years before this case is finally resolved.”
Previous settlements in this case and a similar one involving MLS PIN and several national brokerages suggest a victory for the plaintiffs will likely result in buyers’ agents having to separately negotiate their commissions or fees with their clients and end the practice of requiring NAR membership to access many of the country’s multiple listings services. MLS PIN, the state’s largest MLS, is unusual among such services in that it does not require members to be Realtors as it is not owned by any Realtor association.
An analysis by investment firm KBW, focused on impacts of a court case loss on publicly traded real estate brokerages, speculated that up to 1 million of the 1.5 million NAR members could leave the association in the face of higher dues to pay off the damages, and that demand for buyer agent services and average agent commissions could both plummet if buyers look to save money across the transaction.
