Realtors found liable. A recent Missouri jury ruling has dealt a significant blow to the National Association of Realtors (NAR), a leading real estate trade group, and several residential brokerages, who now face damages amounting to nearly $1.8 billion. The jury found them liable for engaging in a conspiracy that artificially inflated commissions on home sales. The period in question spans from April 2015 to June 2022.
A Day of Reckoning
Michael Ketchmark, the lead attorney representing the plaintiffs, hailed the verdict as a “momentous day of accountability” for the implicated companies.
Pending Appeal and NAR’s Response
However, this legal saga is far from over. NAR President Tracy Kasper confirmed their intention to appeal the finding of liability. She reiterated NAR’s belief that its rules are designed in the best interest of consumers, promoting market-driven pricing and fostering business competition. Kasper also expressed NAR’s intent to request a reduction in the damages awarded by the jury.
In addition to NAR, the jury found other real estate entities guilty of collusion. This includes Warren Buffett Berkshire Hathaway-owned HomeServices of America, along with two of its subsidiaries, and Keller Williams Realty.
A spokesperson from HomeServices conveyed their disappointment with the court’s ruling and stated their intention to launch an appeal. They voiced concerns that the verdict could introduce additional challenges for buyers in an already challenging real estate market.
Allegations of Manipulating the System
According to Ketchmark, companies like HomeServices make these claims as they are eager to maintain a system that they allegedly rigged against everyone. He noted that the jury promptly dismissed this argument.
Prolonged Appeals Process
Jaret Seiberg, a housing policy analyst at TD Cowen, anticipates that the appeals process could span up to three years. The losing party may endeavor to have the case brought before the Supreme Court. However, Seiberg emphasized that the verdict does not spell the demise of buyer commissions. The impact on the real estate market may be limited, as most brokers are likely to continue offering commission sharing to generate interest in properties.
New Class-Action Lawsuit
In the wake of their victory, Ketchmark swiftly filed a new class-action lawsuit against real estate firms, including Douglas Elliman, Compass, and Redfin. This lawsuit alleges that these companies also violated antitrust laws by conspiring to maintain high commissions.
Douglas Elliman and Compass have chosen not to comment on the new case. Redfin CEO Glenn Kelman dismissed it as a “copycat lawsuit.”
The legal wrangling in the real estate sector persists, and the final outcome remains uncertain as the appeals process unfolds.