A Kansas City, Mo., jury unanimously found Tuesday that the National Association of Realtors and other real estate organizations conspired to artificially inflate home sale commissions, in a case that could change how much home sellers pay real estate agents. The jurors on Tuesday awarded $1.8 billion in damages to about 500,000 Missouri home sellers. Since it is an antitrust case, the amount my be tripled.
The plaintiffs said a National Association of Realtor’s rule that required sellers to pay a 5% to 6% commission in order to list their homes on the National Association of Realtor’s database, the Multiple Listing Service, or MLS, was anti-competitive. The database feeds widely used real estate sites including Zillow. If sellers do not agree to the commission terms, they go virtually unseen in the market.
Plaintiffs said the rule has stifled competition and has resulted in higher prices. They argued that if the rule were not in place, buyers would pay commissions to their own agents while buyers’ agents would have to compete by offering lower rates. The lawsuit pointed to countries whose total real estate commissions average 1 to 3 percent, such as the United Kingdom, Singapore, the Netherlands, Australia and Belgium.
Analysts predicted in an October report that changes to the system could reduce the $100 billion consumers pay in commissions by 30 percent. “From a catalyst perspective, a court-ordered injunction could ‘unbundle’ commissions nationally by early 2024, eliminating the longstanding practice of listing agents and sellers setting and paying buyer agent commissions,” the report states.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.