The Blubber

The National Association of Realtors and the HomeServices of America have been found guilty of colluding to inflate or maintain high commission rates, and have been ordered to pay damages of $1.78 billion.

A Kansas City jury has rendered a verdict in the Sitzer/Burnett buyer broker commission lawsuit, finding the National Association of Realtors, HomeServices of America, and Keller Williams guilty of colluding to inflate or maintain high commission rates through NAR's Clear Cooperation Rule. The defendants have been ordered to pay $1.78 billion in damages, with the possibility of treble damages, which could result in the NAR and brokerages paying approximately $5.36 billion. This verdict also opens the door to potential copycat lawsuits in other states.

The jury's decision came after just over two weeks of testimony from both plaintiffs and defendants. The plaintiffs, represented by lead attorney Michael Ketchmark, argued that despite having antitrust rules and regulations in place, the defendants knowingly violated their own rules to sustain high commission rates.

Judge Stephen Bough, who presides over the case, will issue his final judgment before the verdict is official. He has the authority to provide injunctive relief.

In the worst-case scenario for the defendants, Bough could ban the cooperative compensation rule nationwide on multiple listing services, preventing 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agents would also be prohibited from sharing commissions with buyer agents, and buyer agent commission rates would not be published in the MLS.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 retain some elements of the rule while requiring at least a one-cent offer in the "cooperative compensation" MLS field.

The class-action antitrust lawsuit, originally filed in 2019, also included RE/MAX and Anywhere as defendants. However, both reached settlements in this suit, as well as in the Moehrl and Nosalek commission lawsuits, in September.

In response to the verdict, Mantill Williams, a spokesperson for the NAR, announced that the trade group would appeal the jury's verdict and seek a reduction in damages. He emphasized the NAR's commitment to ensuring that consumers receive comprehensive, equitable, transparent, and reliable home information, with fair competition for brokerages of all sizes, service models, and pricing structures.

Darryl Frost, a spokesperson for Keller Williams, expressed disappointment that crucial evidence was not allowed to be presented and suggested that an appeal would be pursued. Frost highlighted Keller Williams' adherence to the law regarding cooperative compensation and emphasized the evidence presented regarding the long-standing practice of sellers' agents offering commissions to other agents involved in marketing and selling homes. Looking ahead, the company will consider various options, including avenues of appeal, as it evaluates the verdict and trial record.