Realtors liable for $1.8 billion in damages for commission inflation
foxbusiness.comFOX News contributor Katrina Campins joined ‘The Big Money Show’ to discuss the U.S. real estate market as mortgage rates continue to weigh on potential homebuyers.
The National Association of Realtors and several residential brokerages were found guilty by a Missouri jury on Tuesday of conspiring to artificially inflate commissions for home sales and held liable for $1.78 billion in damages.
Plaintiffs in the case included the sellers of over 260,000 homes in Missouri, Kansas and Illinois between 2015 and 2022 who raised objections to the commissions they had to pay buyers’ brokers. The damages awarded by the federal jury in Kansas City can be tripled to over $5.3 billion under U.S. antitrust law, although the ruling is subject to appeal.
Home sellers complained that the commission model suppressed competition in the real estate industry by keeping commissions for buyer's brokers in the 2.5 to 3% range despite the diminishing role of brokers as buyers are increasingly able to find homes online independently.
HOME PRICES JUMP FOR SEVENTH STRAIGHT MONTH IN AUGUST
A federal jury held realtors liable to the tune of about $1.8 billion for conspiring to artificially inflate commissions on home sales. (Andrew Francis Wallace/Toronto Star via Getty Images / Getty Images)
Lead lawyer for the plaintiffs Michael Ketchmark said of the ruling that the «day of accountability has arrived in real estate.»
Defendants denied wrongdoing and the National Association of Realtors (NAR) said that there was no evidence agents were required to «make offers of compensation at all, let alone at amounts that stabilize, fix or raise commissions.»
«This matter is not close to being final,» NAR President Tracy Kasper said in a statement. «We
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