Antitrust Verdict in Missouri May Affect Real Estate Commissions and the NAR

John V. Giardinelli, Of Counsel

November 1, 2023

In a significant ruling from Kansas City, the National Association of Realtors (NAR), HomeServices of America, and Keller Williams have been found liable by a jury for allegedly colluding to maintain or inflate high commission rates, specifically through NAR’s Clear Cooperation Rule and Mandatory Participation Rule. In sum, it appears that the jury determined that the rule requiring MLS listings to offer compensation to the buyer’s broker renders the traditional long-standing business practice unlawful. This verdict emerged from the Sitzer/Burnett buyer broker commission lawsuit after only two hours of jury deliberation.

Key Points:

  1. Damages Awarded: The defendants are mandated to pay damages amounting to $1.78 billion. Considering the possibility of treble damages, the amount could be as much as $5.34 billion. This ruling also paves the way for potential class-action lawsuits. The same lawyers have already filed a new case.
  2. Testimony Insights: The jury's decision came after just over two weeks of testimony. The plaintiffs, including home sellers and their lead attorney Michael Ketchmark, argued that despite having antitrust rules, the defendants knowingly violated these rules to sustain high commission rates and the plaintiffs deserved refunds.
  3. Awaiting Final Judgment: As of November 1st, 2023, Judge Stephen Bough is yet to finalize a judgment, which will solidify the verdict. He has the authority to issue an injunction wherein the Judge may ban the cooperative compensation rule on multiple listing services or retain parts of it. A complete ban could alter how listing agents and home sellers pre-set buyer agent commission rates, including prohibiting commission sharing. The judgment will not necessarily apply nationwide. We will be monitoring its effect and potential application in California.
  4. Previous Settlements: The lawsuit, initiated in 2019, also named RE/MAX and Anywhere as defendants. However, both reached settlements in this and two other commission lawsuits earlier in September.
  5. Reactions Post-Verdict NAR: Keller Williams and HomeServices of America expressed disappointment and have stated they will appeal. They emphasized their adherence to the law and expressed concerns about the implications of the verdict on the real estate market.

Stay tuned for more updates on this significant ruling.

This update is based on the article “Missouri jury finds Realtors, brokerages guilty of conspiring to inflate commissions,” originally written by Brooklee Han, Sarah Wheeler, and James Kleinmann, and published by Housingwire on October 31, 2023. The original article can be read here []. This summary has been adapted to fit our newsletter format.

View the detailed source article here.

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