Kansas City jury awards $1.8 billion in civil case, finds Realtors inflated commissions

A Kansas City jury on Tuesday ordered the National Association of Realtors and major real estate brokers to pay nearly $1.8 billion in damages, finding the groups conspired to inflate costs for Missourians selling their homes.

The verdict Tuesday came at the close of a long-running federal lawsuit brought against the National Association of Realtors, HomeServices of America, Keller Williams Realty and others. It was brought on behalf of 260,000 homeowners across the state.

The lawsuit, filed in 2019, aimed at requirements that had sellers pay commissions to their own broker plus the buyer’s, which typically amounted to 6% of a home’s sale price. Other allegations concerned more general inflation of commissions.

Lawyers for the plaintiffs argued that the National Association of Realtors, a lobbying and trade organization, devised a scheme with large residential real estate brokerage companies to maximize commissions for themselves in a way that left consumers with little or no opportunity to negotiate lower commission rates.

That was accomplished, the lawsuit said, by NAR associations creating and maintaining so-called multiple listing services in Missouri, which are essentially large databases of homes listed for sale and information about ones that have sold. Having a home listed on the database requires a seller to be represented by a licensed real estate broker.

Reached by phone Tuesday, Mark Ketchmark, the lead attorney representing the plaintiffs in the class action, said “we view today as a day of accountability.”

“In the United States, homeowners pay three times the amount of commissions to sell the home than people do around the world. And it’s all because of the conduct of the National Association of Realtors and these corporate real estate companies. And we we think it’s wrong. We don’t think the system should be rigged against homeowners,” Ketchmark said.

Under the provisions outlined under the Sherman Antitrust Act, Ketchmark said the damages will automatically be tripled to nearly $5.4 billion. It is believed to be the largest antitrust verdict in the nation’s history.

In a statement to The Star, Mantill Williams, a spokesperson for the National Association of Realtors, said the “matter is not close to final” as the jury’s verdict would be appealed.

“In the interim, we will ask the court to reduce the damages awarded by the jury,” Williams said, adding: “We will continue to focus on our mission to advocate for homeownership and always put consumer interests first. It will likely be several years before this case is finally resolved.”

Darryl Frost, a spokesperson for Keller Williams, said the decision was disappointing.

“This is not the end,” Frost said in a statement. “Keller Williams followed the law regarding cooperative compensation and stands by the evidence presented on the 100-year-old practice of sellers’ agents offering commissions to other agents who help market and sell homes.”