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The National Association of Realtors and some housing brokers were found to be liable for about $1.8 billion in a conspiracy to keep commissions artificially high.
Washington, DC (CNN) — A Missouri jury on Tuesday awarded nearly $1.8 billion in damages after finding that the real estate industry's trade group, the National Association of Realtors, and some home brokers conspired to keep home sales commissions artificially high. It was ruled that he was responsible.
The lawsuit covers home sales that took place between April 2015 and June 2022.
“We see this as a tremendous day of accountability for these companies,” Michael Ketchmark, lead attorney for the plaintiffs, told CNN.
Despite the ruling, the issue is still far from resolved.
“This matter has not yet been finalized. We are affirming the fact that NAR's rules serve the best interests of consumers, support market-driven pricing, and promote business competition. We will appeal the decision,” NAR President Tracy Kasper said in a statement after the decision was announced.
However, she said NAR “cannot discuss the specifics” of the grounds for appeal until the application is filed. “In the meantime, we will ask the court to reduce the damages awarded by the jury,” Kasper added.
Other real estate groups the jury found guilty of conspiracy include HomeServices of America, owned by Warren Buffett's Berkshire Hathaway, and two of its subsidiaries, Keller Williams Realty.
A HomeServices spokesperson told CNN that the company is “disappointed with the court's decision and intends to appeal.”
“Today's decision means buyers will face further obstacles in an already difficult property market, and sellers will find it even more difficult to realize the value of their homes,” the spokesperson said.
Keller Williams did not immediately respond to CNN's request for comment.
Ketchmark said groups like HomeServices are making this argument “because they're desperate to hang on to a system that's been rigged against everyone.”
“They made the same argument in court over the past few weeks and it took the jury two and a half hours to ignore it,” he said.
The appeals process could take up to three years, said Jarrett Seiberg, a housing policy analyst at TD Cowen. He said the losing party would likely try to take the case to the Supreme Court.
But Tuesday's ruling does not mean “buyer fees are a thing of the past,” he said.
The judge overseeing the case will have to decide on the scope of the injunction, which could end up being a “minor adjustment” to the current fee-sharing system. “If so, the impact could be limited as we expect most agents to continue offering commission sharing to drive interest in real estate,” Seiberg said. Added.
Minutes after Tuesday's victory, Ketchmark filed a new class action lawsuit against real estate companies including Douglas Elliman, Compass and Redfin. The new lawsuit also alleges that the companies violated antitrust laws by colluding to keep fees high.
Douglas Elliman and Compass declined to comment on the new case. Redfin CEO Glenn Kelman called it a “copycat lawsuit.”
