The influential National Association of Realtors, along with several large brokerages, were mandated to compensate home sellers who argued that they had been compelled to pay inflated fees to real estate agents. A federal jury determined that the National Association of Realtors and these brokerages had colluded to artificially boost the commissions given to real estate agents. This verdict could have far-reaching implications for the home-buying process in the United States.
The realtors’ association and the brokerages are now obliged to pay nearly $1.8 billion in damages. The court also has the authority to triple these damages, potentially increasing the total to more than $5 billion. This ruling could fundamentally change the structure of the real estate industry in the United States by lowering the costs associated with moving homes through reduced commissions.
According to a rule by the National Association of Realtors, a home seller is obligated to pay commissions to the agent who represents the buyer. Home sellers contended that this rule forced them to pay exorbitant fees to agents. They further claimed that the brokerages had collaborated with the National Association of Realtors to enforce what is known as the “cooperative compensation rule.”