A Kansas City, Mo., jury awarded $1.8 billion in damages to home sellers who said the National Association of Realtors and several of the largest real estate brokers in the nation colluded to inflate real estate commissions. The verdict allows the court to triple the award under U.S. anti-trust laws to more than $5 billion. Photo by Dan Moyle/Flickr
Nov. 4 (UPI) — A Kansas City, Mo., jury awarded $1.8 billion in damages to home sellers who said the National Association of Realtors and several of the largest real estate brokers in the nation colluded to inflate real estate commissions. The verdict allows the court to triple the award under U.S. anti-trust laws to more than $5 billion.
The unanimous verdict comes as mortgage rates inch to 8% and home sales continue to sputter. It could spark a major change in how home sellers pay real estate agents. Under the current National Association of Realtors rules, a home seller must pay commissions to their agent and the buyer’s agent — typically 6%. The verdict determined sellers would no longer be required to pay the buyers’ agents.
“We view it as a tremendous day of accountability for these companies,” Michael Ketchmark, the lead attorney for the plaintiffs, told CNN.
The National Association of Realtors — the largest professional organization in the U.S. — said it plans to appeal. Other defendants in the case including Keller Williams and HomeService of America said they also plan to appeal.
“This matter is not close to being final,” the NAR president said in a email to members. “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. We remain optimistic we will ultimately prevail. In the interim, we will ask the court to reduce the damages awarded by the jury.”
The plaintiffs argued the association’s rules required sellers to make a nonnegotiable commission offer before the home was listed on the Multiple Listing Service, or MLS, property database. If the seller didn’t agree, the home would not be listed on MLS and would not be widely seen by potential buyers, the plaintiff’s alleged.
Two days after the jury’s decision, Bob Goldberg, National Association of Realtors longtime CEO, stepped down earlier than previously announced.
“After announcing my decision to retire earlier this year, and as I reflected on my 30 years at NAR, I determined last month that now is the right time for this extraordinary organization to look to the future,” Goldberg said.
