A Kansas City jury took less than three hours to determine that the National Association of Realtors, HomeServices of America and Keller Williams colluded to inflate or maintain high commission rates through NAR policies, in the Sitzer/Burnett buyer broker commission lawsuit.
The defendants have been ordered to pay damages of $1.78 billion. Treble damages could result in the NAR and brokerages paying roughly $5.36 billion. It also opens the door to additional potential copycat lawsuits being filed in other states.
The jury reached its verdict after a little over two weeks of testimony from the plaintiffs and defendants. During their testimony, the home seller plaintiffs and their lead attorney Michael Ketchmark argued that despite the defendants having antitrust rules and regulations in place, the trade group and corporate brokerages knowingly violated their own rules in order to maintain high commission rates.
Judge Stephen Bough, who is overseeing the suit, still needs to issue his final judgement on the case, before the verdict is final. He has wide latitude in issuing injunctive relief.
In the worst case scenario for the defendants, Bough could ban the cooperative compensation rule nationally on the multiple listing services, which would prevent listing agents and home sellers from predetermining buyer agent commission rates. Listing agents would also be prohibited from sharing commissions with buyer agents, and buyer agent commission rates would not be published in the MLS.
Alternatively, Bough could also keep elements of the rule in place and require an offer of at least one cent in “cooperative compensation” MLS field.
The class action antitrust lawsuit, which was originally filed in 2019, also included RE/MAX and Anywhere as defendants, however the two reached settlements in this suit as well as the two other commission lawsuits, Moehrl and Nosalek, in September.
In response to the verdict, Mantill Williams, a spokesperson for the NAR, said the trade group will be appealing the jury’s verdict and will also ask the court to reduce damages.
“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,” Williams said. “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.”
Darryl Frost, a spokesperson for Keller Williams, said that crucial evidence was not allowed to be entered and alluded to an appeal being filed.
“We are disappointed that before the jury decided this case, the court did not allow them to hear crucial evidence that cooperative compensation is permitted under Missouri law,” he said in a statement following the verdict. “This is not the end. Keller Williams followed the law regarding cooperative compensation and stands by the evidence presented on the 100-year-old practice of sellers’ agents offering commissions to other agents who help market and sell homes. Looking forward, we will consider all options as we assess the verdict and trial record, including avenues of appeal.”
A spokesperson from HomeServices similarly vowed to appeal the ruling in Missouri.
“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. “It could also force homebuyers to forgo professional help during what is likely the most complex and consequential financial transaction they’ll make in their lifetime.”
In a statement, HomeServices said the cooperative compensation rule “helps ensure millions of people realize the American dream of homeownership with the help of real estate professionals.”
A spokesperson for Anywhere Real Estate also provided a statement noting that the company chose to settle in the case in early October without admitting to wrongdoing.
“The jury verdict, while disappointing, does not alter our settlement, and we look forward to obtaining court approval and implementing our settlement agreement,” Anywhere’s spokesperson said. “Anywhere strongly believes in the value of both buyer and seller agents to help consumers successfully navigate one of life’s most expensive and impactful transactions. We remain fully committed to supporting all agents as they expertly serve their clients.”
This is a breaking news story and will be updated throughout the day.
