Brokers conspired to keep commissions on homes sales artificially high, a jury found. It's a decision that could ultimately save some consumers money.
Robyn Phelps/Insider
Say you sold a house.
You paid your mortgage, taxes, and insurance on time. You sunk money into your investment before deciding it was time to move on. You chose a broker, vetted buyers, and made it to closing. You pocketed some money — but not before paying your broker and the buyer's broker as much as 6% of the home's sale price, which could trim thousands of dollars off your profit.
But what if you paid your broker too much, leaving your own wallet thinner unnecessarily?
That's what a federal jury ruled on Tuesday.
It found the National Association of Realtors (NAR) — the biggest trade association for the industry, with 1.6 million agents as members — and some large residential brokerages conspired to keep their commissions on home sales artificially high. As a result, the jury added, NAR and the brokerages are liable for about $1.8 billion in damages.
The result? Home sellers might be able to keep more of the proceeds of their sales — and some might even decide not use a broker at all.
Sissy Lappin, owner of a real-estate brokerage in Houston, Texas, told the Wall Street Journal that Tuesday's verdict could push more people to buy and sell homes by themselves rather than hiring an agent.
The verdict, she added, is "a wake-up call for real-estate agents."
Insider's James Rodriguez argued in June that this case — plus a similar, bigger antitrust suit against NAR and other brokerages whose damages could top $40 billion — "could radically reshape how we buy and sell homes forever."
Rodriguez explained that these cases "could rewrite the rules of how agents get paid. The seller might no longer pay out both agents' commissions after the sale closes. Instead, a buyer would pay their agent directly. Proponents say these changes would increase competition among agents, dramatically lower commissions, and potentially save consumers as much as $20 billion to $30 billion a year."
Currently, home sellers often list their properties for higher sums because they expect to pay broker fees. A decrease in standard commission rates, though, might motivate sellers to list their homes for a little less.
Bernstein
The plaintiffs, home sellers in the Midwest, brought the antitrust suit against NAR and the brokerages, HomeServices of America and Keller Williams Realty, in 2022. They claimed that their agents unlawfully kept prices high for consumers despite technological advances that are free to everyone and reduce the costs of buying and selling homes.
"NAR and corporate real-estate companies have had a stranglehold on real-estate commissions for too long," the plaintiffs' lawyer, Michael Ketchmark, said outside the courtroom Tuesday, according to the Journal.
An NAR spokesperson said the organization plans to appeal the jury's verdict.
