Washington, DC (CNN) — A Missouri jury on Tuesday found the National Association of Realtors, a real estate industry trade group, and some residential brokerages liable for nearly $1.8 billion in damages after determining they conspired to keep commissions for home sales artificially high.
The lawsuit covered home sales that took place between April 2015 to June 2022.
“We view it as a tremendous day of accountability for these companies,” Michael Ketchmark, the lead attorney for the plaintiffs, told CNN.
Despite the verdict, the matter is still far from being resolved.
“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,” NAR president Tracy Kasper said in a statement after the verdict was announced.
However, she said NAR “can’t speak to the specifics” to its basis of appeal until it is filed. “In the interim, we will ask the court to reduce the damages awarded by the jury,” Kasper added.
Warren Buffett’s Berkshire Hathaway-owned HomeServices of America and two subsidiaries, as well as Keller Williams Realty, were among the other real estate groups the jury found guilty of conspiring.
A spokesperson from HomeServices told CNN the company is “disappointed with the court’s ruling and intends to appeal.”
“Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes,” the spokesperson said.
Keller Williams did not immediately respond to CNN’s request for a comment.
Ketchmark said groups like HomeServices are claiming this “because they’re desperate to hang on to the system that they have rigged against everyone.”
“They made that same argument in court for the last couple of weeks and it took a jury all of two and a half hours to disregard it,” he said.
Appeals process could be protracted
The appeals process could take up to three years, said Jaret Seiberg, a housing policy analyst at TD Cowen. The losing party he said will likely attempt to have the case tried by the Supreme Court.
But Tuesday’s verdict does not mean “buyer commissions are a thing of the past,” he said.
The judge presiding over the case will have to decide the scope of the injunction, which could end up amounting to “minor tweaks” to the current commission-sharing system. “If that is the case, then the impact may be limited as we expect most brokers will continue to offer commission sharing to boost interest in the property,” Seiberg. added.
Minutes after Tuesday’s victory, Ketchmark filed a new class-action lawsuit against real estate companies including Douglas Elliman, Compass and Redfin. The new suit also alleges the companies violated antitrust laws by conspiring to keep commissions high.
Douglas Elliman and Compass declined to comment on the new case. Redfin CEO Glenn Kelman labeled it “a copycat lawsuit.”
