Home sellers win $1.8 billion after jury finds Realtor, brokerage conspiracy

The National Association of Realtors and multiple large brokerages conspired to increase commissions for real estate agents, a federal jury found in a decision that may change the U.S. home-buying process.

The court on Tuesday ordered the realtors' group and brokerages to pay nearly $1.8 billion in damages, according to The New York Times. The verdict also allows for treble damages, which are used in specific cases to allow courts to award three times the amount stated by the jury, which means that the defendants may be forced to pay over $5 billion.

Under the realtors association rules, a home seller must pay commissions to the agent representing the buyer, and sellers say this forced them to pay excessive agent fees. The home sellers said the brokerages collaborated with the association to enforce what is known as the "cooperative compensation rule."

For example, currently, if a person sells a $1 million home, that seller may pay $30,000 to their agent and $30,000 to their buyers' agent, meaning that the seller would be paying $60,000 in commissions.

The verdict may dramatically decrease the cost of homes, as sellers are no longer required to pay their buyers' agents, and agents can set their own commission rates, which may be cut in half.

Nearly half a million Missouri home sellers brought the antitrust lawsuit in Kansas City against against the association and Keller Williams, Re/Max, HomeServices of America and Anywhere, formerly Realogy, whose subsidiaries include Coldwell Banker, Sotheby’s International Realty and Century 21 Real Estate. 

Re/Max and Anywhere settled for a combined amount of nearly $140 million, but the association, Keller Williams and HomeServices went to trial.

The decision came the same day that the S&P CoreLogic Case-Shiller US National Home Price Index released data showing that home prices in August rose to a record high, while mortgage rates are also at over 7%.

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