A U.S. jury found that a number of big-name players in the real estate space are liable to pay $1.78 billion in damages regarding allegations that they conspired to artificially inflate commissions for home sales. Named as defendants were the National Association of Realtors and some residential brokerages; Berkshire-owned HomeServices of America and two subsidiaries; and the realty firm, Keller Williams.

The verdict was handed down by a federal jury in Kansas City, Missouri, and could influence how real estate agents navigate commission sales.

The class action lawsuit was brought forward by plaintiffs who sold their homes in Missouri, Kansas, and Illinois between 2015 and 2022. The class action sellers represent over 260,000 homebuyers who took issue with the high commission prices they were required to pay the Buyer’s broker.

The plaintiffs say the high commission prices were the result of U.S. antitrust law violations. These laws are designed to prohibit anti-competitive conduct including company mergers and business practices that would deprive Americans of the ability to engage in competitive consumerism.

The first antitrust law, the Sherman Act, was established in 1890 as a "comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade." Additional antitrust laws have since been passed to help protect American consumers.

After a two-week trial, the jury reached a verdict of $1.78 billion. Under U.S. antitrust law, this figure can be tripled to amount to over $5.3 billion.

Commission fees are a standard procedure during the home-buying process. Nationally, broker compensation after a home sale ranges between 5% and 6% of a home's final sale price, with about half that commission paid to a buyer's broker.

However, according to the plaintiffs, the current commission model they were subjected to suppressed competition from brokers who operated closer to a 2-1/2 to 3% range. Plaintiffs also noted the declining role of a broker during the home buying process as many buyers are finding homes for sale independently online. By suppressing competition from those buyers as well, the sellers were required to pay unfair commissions.

In stifling competition, the plaintiffs argued that the defendants were engaging in a price-fixing model. With such operations, the plaintiffs said that there were "severe anticompetitive effects" and that the model made "no economic sense, except for the buyer broker."

After two weeks of litigation, the verdict had an immediate impact on the share price of real estate brokerages including those who were not involved with the lawsuit. Following the verdict, popular real estate brokerages including Re/Max and Anywhere fell 4.4% and 2.7% respectively. Meanwhile, Online brokerages including Zillow and Redfin saw shares dip 6.9% and 5.7%, respectively.

Following the verdict, a spokesperson for the National Association of Realtors, Mantill Williams, shared that the group was planning to appeal the verdict and seek reduced damages.

The Association president Tracy Kasper also shared following the verdict, “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.”

HomeServices also shared its disappointment with the verdict saying that they would plan to appeal. Darryl Frost, a spokesperson for Keller Williams, shared that the company would be weighing its options for an appeal and that “This is not the end.”

In addition to the verdict, the National Association of Realtors continues to fight a different battle with the federal government. The U.S. Justice Department has asked a federal appeals court to allow an antitrust investigation to continue into the association's practices.