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Realtors Found Guilty of Conspiring to Keep Agent Commissions High, Ordered to Pay $1.8 Billion in Damages The National Association of Realtors (NAR) and major brokerage firms were found guilty by a federal jury in Missouri for deliberately inflating real estate agent commissions.

By Madeline Garfinkle

Key Takeaways

  • The lawsuit, filed by over 260,000 home sellers, accused NAR and several brokerage firms of maintaining high commission rates, limiting competition, and influencing excessive fees.
  • The defendants plan to appeal, with some brokerage firms settling without admitting liability.

Opinions expressed by Entrepreneur contributors are their own.

On Tuesday, the National Association of Realtors (NAR) and several large brokerage firms were found guilty by a federal jury in Missouri of conspiring to intentionally keep real estate agent commissions high, resulting in nearly $1.8 billion in damages, The New York Times reported.

The lawsuit was initiated by nearly 260,000 home sellers in Missouri, Kansas, and Illinois from 2015 to 2022, alleging that the NAR, along with prominent brokerages like Keller Williams, Anywhere, Re/Max, and HomeServices of America, had conspired to inflate the commissions paid to real estate agents, ultimately impacting the cost of home transactions for both sellers and buyers.

The plaintiffs argued that the rules set by NAR, particularly the "cooperative compensation rule," mandated that a home seller was obliged to pay commissions to the agent representing the buyer, which sellers claimed led to excessive fees for their agents, limited competition, hindered negotiation, and maintained high commission rates.

Related: Katy Perry Is Fighting the Founder of 1-800-Flowers for a $15 Million California Mansion He Doesn't Want to Sell Her

The defendants are now liable to pay $1.78 billion in damages, with the possibility of the damages being tripled to over $5.3 billion under U.S. antitrust law.

"Today was a day of accountability," Michael Ketchmark, the lead attorney for the plaintiffs, told Reuters.

The defendants refuted any wrongdoing, with the NAR planning to appeal the verdict.

"We remain confident we will ultimately prevail," NAR president Tracy Kasper wrote in an internal email to members, obtained by the NYT.

Re/Max and Anywhere Real Estate settled before trial, paying $55 million and $83.5 million, respectively, but without admitting liability, per Reuters.

The verdict could help overhaul the existing real estate system in the U.S., forcing professionals to reevaluate commission structures and foster increased competition, which could benefit consumers by lowering costs.

For example, under the current system set by NAR, a home seller must pay commissions to the agent representing the buyer. However, the verdict changes this by no longer requiring sellers to pay their buyers' agents, allowing agents to set their rates, potentially reducing them significantly.

"It's a wake-up call for real estate agents," Sissy Lappin, the owner of a real-estate brokerage in Houston, told The Wall Street Journal.

Related: Fake Property Manager Allegedly Defrauded Would-Be Renters Over $200,000

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

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