A federal jury dealt the biggest blow to the American home-buying industry in perhaps a century when it found that the powerful National Association of Realtors and several large brokerages had conspired to keep agent commissions artificially high, The New York Times reported. Brokers, analysts and consumer advocates called the decision — which awarded plaintiffs nearly $1.8 billion in damages — a game-changer. More antitrust lawsuits against the association and brokerages are awaiting trial, while federal regulators are also looking to intervene. Here’s what changes might be in store for the home brokerage industry, which pulls in an estimated $100 billion in commissions each year. Real estate experts say the current system won’t stand. Right now, home sellers essentially pay fees for both their own agent and the buyers’ agent, with a typical commission around 5 to 6 percent, split between the two brokers. Experts identified a range of potential shifts, including making commission sharing optional, so that sellers’ agents who don’t want to pay buyers’ agent fees can still list on databases. Start-ups are trying different business models. The brokerage industry could contract. Such a drop could have disastrous consequences for the National Association of Realtors, which collects about $150 from each member annually. According to the nonprofit’s most recent annual tax filing, it earned $79 million in net income on $327 million in revenue. The group has said it will appeal the court ruling. (Subscription required to view article.)
