Throw a steel lockbox in any direction at the Anaheim Convention Center last week and you were sure to hit a Realtor with an opinion about “the verdict.”
“The amount of the verdict was outrageous,” Larry Hurley, an Arlington, Texas, broker, said before a case name was even mentioned.
“It’s a bogus claim,” added Yorba Linda broker George Castillo.
“There’s no collusion,” said Hawaii broker Kelly Liberatore. “I don’t think the judge understood.”
They all were referring to a federal class-action lawsuit over how real estate commissions get paid and by whom.
Also see: Realtors’ commission fees draw antitrust scrutiny
A Kansas City jury ruled Oct. 31 that the National Association of Realtors and two real estate franchises should pay $1.78 billion in damages for requiring home sellers to pay commissions to the buyer’s agent. The damages could be tripled to an astounding $5.3 billion.
The practice amounts to a price-fixing, keeping commissions in the 5-6% range, even as home prices mushroom, the jury ruled.
The antitrust case was the “elephant in the room” at NAR’s annual conference, held this year in Anaheim.
Also see: California Realtor’s new purchase contract could upend buyer’s agent commission
Thousands of members jammed a meeting hall on Monday to hear Realtor lawyers and NAR President Tracy Kasper vowing to fight the decision. Hundreds packed another meeting room Tuesday to discuss possible changes, and the topic came up again and again during breakout sessions throughout the week.
“It was top of mind for everybody at the conference,” said Art Carter, chief executive for the California Regional Multiple Listing Service.
The matter is complex. But parties on both sides of the issue agree on one simple fact: the case has the potential to create drastic change in how Americans buy and sell their homes.
Also see: Is the 6% real estate commission dead?
Upending the buyer’s agent
The verdict could face years of…
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