US judge approves $418 million antitrust settlement against National Association of Realtors

A U.S. federal judge in Missouri on Tuesday preliminarily approved an antitrust class-action settlement that requires the National Association of Realtors to pay $418 million and implement changes to how Americans buy and sell homes.

Why it's Important

U.S. District Judge Stephen Bough's settlement order marked a key first step in a months-long process that will culminate in a final approval hearing set for Nov. 26 in Kansas City, Missouri.

The plaintiffs' lawyers who negotiated the deal have heralded it as a game-changer for how homes are bought and sold in the United States.

Under the terms of the settlement, home sellers will no longer be required to offer a commission to buyers' agents in order for their properties to appear on "multiple listing services," which is where most home sales originate. Commissions still can be negotiated as part of the process.

Context

Bough presided over a trial last year that ended in a $1.8 billion verdict against the National Association of Realtors and other defendants. A class of home sellers accused the defendants of unlawfully inflating the commissions they pay to agents for buyers.

The National Association of Realtors has long defended the industry's commission practices, arguing they promote efficiency and transparency in residential home-buying. The Chicago-founded trade group, which did not admit any liability as part of its settlement, welcomed Bough's preliminary approval in a statement on Tuesday.

Brokerage company HomeServices is the only remaining defendant in the case. The company has asked Bough to overturn the verdict.

By the Numbers

The deal is the largest reached so far in litigation over real estate commissions, pushing total proposed settlements to $626 million. Anywhere Real Estate separately said it would pay $83.5 million, Compass agreed to pay $57.5 million and Re/Max settled for $55 million.