National Association of Realtors and Brokerages Liable for $1.8 Billion for Keeping Commissions High; System Changes Expected

Missouri court ruling may trigger industry-wide shift in residential brokerage commission structure, potentially decreasing home prices and reducing the number of agents in the US by 80%.

A Missouri court handed down a verdict stating that the National Association of Realtors (NAR) and two major brokerage firms, Homeservices of America and Keller Williams Realty, were liable for $1.8 billion in damages for conspiring to maintain high real estate commissions. It marks a significant turning point in the residential real estate industry.
The plaintiff's argument centres on the claim that NAR and the brokerages force home sellers to pay an inflated commission, which is then shared between their agent and the buyer's agent. These home sellers argue that this practice keeps commissions artificially high, and that the buyer's agent's commission should be negotiable and paid by the buyer.
Re/Max and Anywhere Real Estate, the other companies involved in the lawsuit, decided to settle out of court for a total of $140 million. As part of their settlement terms, they pledged to amend their business practices, including not mandating agents to hold NAR memberships.
Throughout the years, NAR fought off multiple antitrust lawsuits and criticisms concerning its anti-competitive practices. This ruling is considered the most significant setback the association has encountered up to now.
Analysts anticipate that the case's outcome may lead to the separation of the buyer’s agent commission and seller’s agent commission. This could result in lower home prices and an estimated decline by up to 80% in the number of US real estate agents. However, the full implications of this verdict will not materialize instantly.