A federal jury today agreed with the plaintiffs that organizations such as Keller Williams, Berkshire Hathaway HomeServices of America, and the National Association of Realtors had violated the law by conspiring to inflate commission rates.
Their attorney then filed an additional lawsuit against the other large brokerages, including Compass.
There’s enough for several blog posts here! Let’s begin with the first problem:
In this trial, the defense was pathetic, and the realtors will likely lose in appeals court too.
The defense attorneys rode in cocky and notched it up on the first day when they said the plaintiffs have the burden of proving their case…..and the defense may not even call a witness! Then when they did call a witness, it just had to be the CEO of NAR, Bob Goldberg, whose arrogance may be unrivaled.
He offered the following:
The CEO returned to the stand on Tuesday to face cross-examination from plaintiff party’s attorney Michael Ketchmark. During the cross, Ketchmark tried making an analogy — not for the first time — between the allegations facing NAR and the hypothetical of chicken producers inflating prices.
Goldberg argued the analogy was “apples and oranges” because real estate agents offer a service, not a product. When Ketchmark continued his analogy and pressed Goldberg on whether he needs an explanation of antitrust law, the CEO responded, “No. I need you to explain to me the chicken law.”
What the defense never considered was that the jury came into the courthouse with the same biases/prejudices that every American has considered – realtors are overpaid, and it’s a racket. The industry never bothers to educate the public, so you can’t blame the jurors or anyone else for thinking that we need to be taken down a notch…or two.
When Bob made his crack about chicken law it had to make every juror hate him even more. Sure, it was kinda funny but this is no time for wisecracks when billions of your members’ money is on the line!
Gary Keller is a nice guy but his soft-spoken testimony didn’t sway the jury – and you can blame his defense attorneys for asking questions that were too lame and indifferent:
Keller’s was the final testimony in the defense’s bid to argue that broker commissions vary and are not set by real estate companies.
Keller denied in his testimony that a “standard commission” existed, saying agents are responsible for setting their own commissions. He said the company had no say in the commissions charged by agents.
While it is true that realtors are independent contractors and each sets their own commission rates, having a gazillionaire state it towards the end of the trial isn’t going to persuade anyone.
The two most important facts of the case were never brought up:
- The sellers should have the right to pay a reward, or bounty, to persuade agents to sell their house.
- Every seller pays the listing brokerage the full commission, and it’s the LISTING AGENT who decides how much commission the buyer-agent gets.
For the defense to not bring up these points just shows how arrogant and unprepared they were for this trial. The NAR president didn’t exactly give us a reason to think it might be different next time:
This matter is not close to being final. We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition. We remain optimistic we will ultimately prevail. In the interim, we will ask the court to reduce the damages awarded by the jury.
In court, NAR presented evidence that consumers are better off and business competition is able to thrive because of our rules and how well local MLS broker marketplaces function. In fact, the NAR cooperative compensation rule for local MLS broker marketplaces ensures efficient, transparent and equitable marketplaces where sellers can sell their home for more and have their home seen by more buyers while buyers have more choices of homes and can afford representation. NAR also presented that REALTORS® are everyday working Americans who are experts at helping consumers navigate the complexities of home purchases and advocates for fair housing and wealth building for all.
Is that all you got? With leaders like this, any future trials will be decided in the same 2.5 hours that it took the jury to decide this one. The only hope is that Compass will hire our own attorneys, and they call on a part-time blogger from San Diego to testify!
Live chat from this video: https://www.youtube.com/live/rnG-8ZoHT0o?si=tgtLUyjq3ywjYBiV
SherylAalis
So disappointed!
Carol Perez
NAR sold our services out long ago and this is the result of the deterioration of our industry
Empire Fine Homes
can you explain the lawsuit
Jason Haber
A complete failure by NAR. Sorry that’s what it is.
Corey Eames
The irony of “sellers” willing to go through a class action lawsuit (where they get peanuts) to fight against the atrocity of paying for a service that puts $ in their pockets HA!
Sheena in Connecticut
”conspiracy” what a joke
Tony Arguelles
Can this be Appealed ?
Jason Haber
that’s right
Berto Barrera
Why
Jason Haber
pathetic. imagine if are dues were spent on component attorneys instead of buying off women with NDAs to silence sexual harassment
Berto Barrera
What does this mean for buyers agent commission moving forward ?
Ronda Densford, REALTOR
Horrible representation by NARs attorneys
Jason Haber
my sources in NAR are giving me a look of what its like in the office now. its pretty crushing.
Jason Haber
NAR has 900 board members. Apple has 15. NAR is completely bloated and ineffective. And it shows!
Cobbleridge Realty
EXACTLY, NAR and these other brokerages couldn’t explain clearly the role of an agent. They failed to educate the jury. These are the same people who try to show us on how to educate the consumer
BAM
Tim Macy Live On The Line ????????
Danielle Garofalo
The least surprising part of this is that NAR strategy was in effective, and that they were condescending. How you do anything is how you do everything.
arich527
How is this a conspiracy considering we are all independent contractors, self employed, AND the presence of numerous low cost brokers? Such a sham
Sheena in Connecticut
The NAR representation didnt portray exactly why realtors are important in a transaction , its disappointing
Buying Dominican Republic
NAR has failed on what should be easy to prove, that commissions are negotiable.
William Chea
Lol they have that money bro – Warren buffet!!
Jason Haber
NAR CEO bob goldberg should leave TODAY
Katherine S
What happened???
Danielle Garofalo
Hahaha Byron!
Craig Smyser
NAR has been useless for my entire career.
Julie Wells, Leonard Wells Realty Group
NAR hasn’t represented US as agents in ages
Houstonrealestatebae
Omg they said that?
Pesso Real Estate @ Coldwell Banker
I wasn’t expecting this verdict. I’m shocked at this verdict. Not good for the consumers.
Crystal Rieser
Way to get the word out 1st! You guys are awesome! Appreciate all you do!
Kelly J. Conley
NAR…What is it good for? Absolutely Nothing!
Team Sims
NAR leadership should resign today.
Gregory Dorrell
NAR is a totally broken organization.
Sam RP – Boston Realtor
Any thoughts on what this might look like for agents day to day business? In MA it’s likely we’ll have a few new disclosures when meeting sellers, but hopefully continue as normal beyond that
arich527
Broken organization is right Jason!
Peter Toner
Buyer representation is what sets the US market apart from most of the rest of the world. This verdict might destroy that concept.
Brittany Pisco
Resign!!!!! Get someone with a backbone please!!!!
Craig Power
I have a tough time believing an appeal is going to be all that successful. They got smoked to the tune of 1.78 billy!
Moving to Texas
Maybe we need someone in the actual field fighting for us
Chris McNelis
Get rid of Goldberg yesterday.
Century 21 First Story Real Estate
agree with the caller.. NAR and membership was not represented properly.
Jose Cifuentes
WHY ARE WE PAYING DUES FOR ORGANIZATION LEADERSHIP TO TURN AROUND AND DESTROY OUR BUSINESS?!
thetamindiego
Love hearing Jason’s passion on this
Jason Haber
sign our petition and call for Goldberg to resign
Moving to Boston – Katherine Kranenburg
Sounds like good ole boy club of Boston
thetamindiego
Count on my signature
arich527
Only in NAR, can you get fired and have a lawsuit against you, and STILL have a golden parachute
The One Realty (Danielle Fountain, REALTOR Austin)
Where can we sign?!
Brittany Pisco
In the world of DEI, do they even know how badly This is going to backfire on lower income and minority populations? No one should go this alone – it’s terrifying!
David Caldwell
When Remax settled for 25% of the market cap, the signs seemed obvious
WK
NAR is a joke…Not surprised at the verdict.
Jason Haber
https://www.change.org/p/we-demand-the-resignation-of-nar-ceo-bob-goldberg-and-other-executives-immediate-changes
see the link above for the link to the fire bob goldberg petition
Jason Haber
please sign and share with our ENTIRE office today
Tina Garman
What is a contract for?
can’t wait to see ya up on the witness stand!
As probably the only non real estate agent commenting …
ITS ABOUT FRICKIN TIME!