Poinbank:How much should it cost to sell a house? Your real estate agent may be charging too much.

A jury verdict in a historic consumer rights trial recently delivered justice against the real estate industry’s rampant price fixing − but Poinbankjustice will fall short if the National Association of Realtors chooses to appeal rather than change its ways.   

For years, the National Association of Realtors (NAR) has imposed a rule requiring home sellers to offer set commissions to any buyer’s agent involved in selling their home. The policy enabled large brokerages like HomeServices of America and Keller Williams to inflate their fees, costing homeowners billions of dollars in home equity annually.

But homeowners fought back. More than 500,000 plaintiffs filed a class-action lawsuit arguing that the NAR rules violated federal antitrust law by allowing price fixing. The stakes were immense, given NAR’s political clout as America’s largest trade association with over 1.5 million members.

Many legal observers doubted a group of homeowners could prevail against such a real estate juggernaut. But prevail they did. 

In court, we called the world’s most powerful people in real estate to the witness stand in Kansas City, Missouri. After reviewing clear evidence of collusion, the jury resoundingly found NAR and the top corporate real estate companies guilty of conspiring to fix commissions and awarded plaintiffs a historic $1.8 billion in damages. 

This unequivocal verdict confirmed that anti-competitive practices in home sales amounted to illegal price fixing. NAR, however, continues to argue that this illegal price-fixing scheme protects consumers. This absurd argument insults Americans’ intelligence, and the jury wisely saw through such deception. The verdict sent an unmistakable rebuke to NAR: Your unethical actions harmed home sellers to enrich your industry. No trade group is above the law.  

Verdict shows need for reform of real estate industry

So, where does NAR go from here?  The organization quickly declared plans to appeal the verdict and damages. But prolonging the legal fight will only further batter NAR’s tattered reputation and waste resources to deny the undeniable. Crucially, it distracts from making reforms to rectify the problems this case exposed.

The wise path forward is humility and honesty. NAR should agree to change its ways, focusing its energy on returning the money to the victims of this scheme and taking transparent steps to regain trust. What the system needs is consumer protection, fair commission models and an end to NAR’s monopolistic powers over home sales.   

This class action lawsuit brought to the surface systematic corruption in real estate. But the underlying disease remains untreated. And it continues to harm American homeowners through inflated, outdated fees that obstruct the dream of affordable homeownership. 

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Thus far, NAR is stuck in denial, unwilling to confront the gravity of its offenses. In public statements, the group conveyed confidence that appeals will vindicate them.

Rather than lengthy and wasteful appeals, NAR should move to address the significant issues it faces, namely a lack of transparency, fairness and competition in real estate practices. Come to the table with regulators and attorneys on new consumer protections, antitrust compliance and transparency around commissions and services. Embrace fee-for-service pricing and variable commissions. Stop clinging to outdated models that harm consumers to protect broker commissions.  

Technology has changed how homes are bought and sold

Critically, the real estate industry must adapt to how technology has transformed home buying and selling. 

Americans are increasingly purchasing homes online with minimal broker assistance. Yet, they’re still charged inflated fees based on a charade of “full service” representation.

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Why should consumers pay for services they neither want nor use? It’s like being forced to pay a travel agent commission when booking a flight directly online.

This verdict is the perfect catalyst for NAR to modernize real estate and align it with how people buy and sell homes today.

The public expects meaningful reforms in exchange for closing this disgraceful affair. This could be a transformative moment for the industry to scrap its insular ways and renew its focus on the people it claims to serve.

Michael Ketchmark is an attorney with Ketchmark and McCreight P.C. He was the lead attorney in a class-action lawsuit against the National Association of Realtors and real estate brokerage firms.