It could be that the days of the in-person realtor are coming to an end thanks to the resolution of a recent case involving the United States National Association of Realtors (NAR) and two brokerage firms in the state of Missouri.
On October 31st, an eight-member jury in Missouri found NAR, HomeServices of America, and Keller Williams Realty liable for up to $1.8 billion in damages. The organization and the two named companies had apparently conspired to keep realtor’s commissions high by inflating the rates charged in the process of homebuying through a third-party realtor.
NAR officials, as well as executives from its fellow conspirators, are set to appeal the verdict. However, resolving such an appeal may take years.
Meanwhile, two other companies previously included in the suit, Anywhere Real Estate and Re/Max, paid plaintiffs a joint settlement of $140 million. Both firms are also committed to making changes to their respective business practices; the companies will also waive the requirement that their agents should go in for NAR membership.
The Heart of the Matter
The home sellers who brought the case to court pointed out that, due to the use of more efficient digital platforms, in-person buyer representation has been rendered obsolete. As such, the service is one that should only be offered to those who are rich enough to pay for them.
The plaintiffs also stated that current commission rates among realtors are too high. Indeed, they claimed that brokers were earning far more than standard and that NAR’s rules have made it possible for real estate brokerages to fix prices to their liking.
The Missouri verdict is, however, far from the only legal issue NAR has faced of late. The organization currently faces several other lawsuits and is currently being investigated by the Department of Justice with regard to its antitrust activities.