OAN’s James Meyers
8:53 AM – Wednesday, November 1, 2023
A Missouri jury found the National Association of Realtors (NAR) guilty of conspiring to inflate commissions on home sales.
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The verdict was announced on Tuesday, finding the realtors group liable to pay $1.78 billion in damages after determining that they conspired to keep commissions for home sales artificially high.
The lawsuit covered the time between April 2015 to June 2022.
WIth the ruling by the jury, it could end multiple year practices that have allowed real estate agents to raise commissions as home prices and mortgage rates increase, which hurts consumers by making housing transactions more expensive than they should be.
The lawsuit included sellers of more than 20,000 homes in Missouri, Illinois and Kansas between 2015 and 2022.
Additionally, with the latest verdict, damages awarded can be nearly tripled under United States antitrust law to more than $5.3 billion.
“This matter is not close to being final. We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition,” NAR president Tracy Kasper said in a statement after the verdict was announced.
However, she said NAR “can’t speak to the specifics” on the basis of the appeal until it is filed. “In the interim, we will ask the court to reduce the damages awarded by the jury,” Kasper added.
Furthermore, the defendants included Warren Buffett’s Berkshire Hathaway-owned Homeservices of America and two subsidiaries, as well as Keller Williams Realty.
For the most part, the broker compensation in the U.S. has been around 5% to 6% of a home’s sales price, with nearly half paid to a buyer’s broker.
However, home sellers complained this model kept competition down by keeping commissions for buyer brokers in the 2-½ to 3% range despite the brokers’ lesser role, with multiple buyers able to find homes independently online.
In response to the verdict, the defendants denied any wrongdoing, claiming there was no evidence agents were required to “make offers of compensation at all, let alone at amounts that stabilize, fix, or raise commissions.”
Meanwhile the Department of Justice (DOJ) is separately asking a federal appeals court in Washington, D.C. to let it revive an antitrust probe into the NAR’s practices.
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