Home Sellers Win $1.8 Billion After Jury Finds Conspiracy Among Realtors

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Yesterday, a judge in Kansas City Missouri ruled in favor of home sellers seeking damages after they claim they were unfairly forced to pay more commissions to agents. (New York Times)

A federal jury ruled on Tuesday that the powerful National Association of Realtors and several large brokerages had conspired to artificially inflate the commissions paid to real estate agents, a decision that could radically alter the home-buying process in the United States.

The realtors’ group and brokerages were ordered to pay damages of nearly $1.8 billion. The verdict allows the court to issue treble damages, which means they could swell to more than $5 billion.

It’s a decision that has the potential to rewrite the entire structure of the real estate industry in the United States, lowering the cost of moving homes by reducing commissions. Under a N.A.R. rule, a home seller is required to pay commissions to the agent representing the buyer, which sellers claimed forced them to pay excessive fees to the agents. The home sellers said the brokerages collaborated with N.A.R. to enforce what is called the “cooperative compensation rule.”

The home sellers asked for damages of $1.78 billion. Before heading to trial, both Re/Max and Anywhere Real Estate opted to settle, with Re/Max paying $55 million and Anywhere Real Estate, whose subsidiaries include Coldwell Banker, Century 21 Real Estate, and Sotheby’s International Realty, paying $83.5 million in damages.

But N.A.R., as well as Keller Williams and HomeServices, headed to trial. And on Tuesday morning, after deliberating for less than three hours, an eight-person jury delivered the verdict: Yes, there had been a conspiracy, and not only would the defendants be required to pay damages, but those damages could triple.

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