MO Realtors & Brokerages Guilty of Conspiring to Inflate Commissions, Facing $5.36 Billion in Damages

A recent verdict in Kansas City has shaken the real estate industry, as a Missouri jury found the National Association of Realtors (NAR), HomeServices of America, and Keller Williams guilty of conspiring to inflate or maintain high commission rates. The collusion was executed through NAR's Clear Cooperation Rule, a controversial practice that has sparked significant legal action. The repercussions are staggering, with the defendants ordered to pay damages of $1.78 billion, potentially escalating to approximately $5.36 billion under treble damages. Furthermore, this verdict could pave the way for similar copycat lawsuits in other states.

The Jury's Verdict

After slightly over two weeks of testimony from both plaintiffs and defendants, the jury reached its damning verdict. Home seller plaintiffs, alongside their lead attorney Michael Ketchmark, argued that the NAR and corporate brokerages knowingly violated their own antitrust regulations to maintain inflated commission rates. Their compelling case succeeded, and now, the industry faces a substantial transformation.

Judge's Final Decision

However, the final outcome of this case lies in the hands of Judge Stephen Bough. He holds the power to issue injunctive relief, and the possibilities are varied. In the most severe scenario for the defendants, Judge Bough could enact a nationwide ban on the cooperative compensation rule within multiple listing services, disrupting the predetermined commission rates between listing agents and home sellers. Alternatively, he might choose to retain aspects of the rule while requiring a minimal offer of just one cent in the "cooperative compensation" MLS field.

Settlements and Future Actions

RE/MAX and Anywhere were initially named as defendants in this class action antitrust lawsuit filed in 2019 but reached settlements in September, distancing themselves from the controversy. In response to the verdict, NAR, Keller Williams, and HomeServices have expressed their intentions to appeal, indicating that the legal battle is far from over. They aim to minimize the damages and uphold their commitment to consumers' interests.

In the end, it seems that the real estate industry is at a crossroads, with this verdict potentially heralding a significant shift in the way commissions and cooperation are handled. While the legal process continues, the future of buyer agent commission rates remains uncertain.