A jury on Tuesday said the National Association of Realtors and several real estate companies, including units of Warren Buffett’s Berkshire Hathaway, must pay $1.78 billion in damages for conspiring to artificially inflate commissions that home sellers pay to buyers’ brokers.
The verdict followed a two-week trial in the Kansas City, Mo., federal court, where the case had drawn widespread attention for challenging widely used real estate industry practices.
The jury award will be automatically tripled under US antitrust law to more than $5.3 billion, said Michael Ketchmark, the lead lawyer for the plaintiffs.
“Today was a day of accountability,” Ketchmark said.
The defendants included Berkshire-owned HomeServices of America and two subsidiaries, as well as Keller Williams.
Plaintiffs in the class action included sellers of more than 260,000 homes in Missouri, Kansas and Illinois between 2015 and 2022.
HomeServices said it was disappointed by the verdict and planned to appeal.
Keller Williams spokesperson Darryl Frost said the company would consider options for an appeal. “This is not the end,” Frost said.
A spokesperson for the National Association of Realtors, Mantill Williams, also said it would appeal and ask the court to reduce the damages amount.
The plaintiffs claimed the association and corporate defendants drove up the commission, upwards of 6%, that home sellers pay to brokers representing buyers.
Sellers called the compensation rule “a market-shaping and distorting rule that has severe anticompetitive effects.”
The defendants denied wrongdoing.
The realtor association argued there was no evidence that agents were required to “make offers of compensation at all, let alone at amounts that stabilize, fix, or raise commissions.”
Two other defendants, Re/Max and Anywhere Real Estate, agreed to respective $55 million and $83.5 million settlements before trial, without admitting liability.
Shares of Re/Max closed down 4% while shares of Anywhere Real Estate closed down 2.7% on Tuesday.
Anywhere’s brands include Corcoran, Coldwell Banker and Century 21.
Shares of online real estate brokers Zillow Group and Redfin Corp, which were not defendants in the case, closed down about 7% and 6%, respectively.
The realtor association faces other legal woes. The U.S. Justice Department is fighting in a U.S. appeals court in Washington to revive a probe of the trade group’s industry rules.
This story originally appeared on NYPost
