A U.S. jury on Tuesday found the National Association of Realtors and some residential brokerages, including units of Warren Buffett’s Berkshire Hathaway, liable to pay $1.78 billion in damages for conspiring to artificially inflate commissions for home sales.
The verdict by a federal jury in Kansas City, Missouri, could upend decades-old practices that have allowed real estate agents to boost commissions as home prices and mortgage rates rise, hurting consumers by making housing transactions more expensive. Plaintiffs in the class action included sellers of more than 260,000 homes in Missouri, Kansas and Illinois between 2015 and 2022, who objected to the commissions they were obligated to pay buyers’ brokers.
has typically been about 5% to 6% of a home’s sales price, with about half paid to a buyer’s broker. Home sellers complained that this model suppressed competition by keeping commissions for buyer brokers in the 2-1/2 to 3% range despite the brokers’ diminishing role, with many buyers able to find homes independently online. Sellers said the arrangement had “severe anticompetitive effects” and made “no economic sense, except for the buyer broker.
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