Legal bombshell: Realtors socked with $1.8 billion fine for inflating commissions

by | Oct 31, 2023

  • A landmark legal ruling found the National Realtors Association, Keller Williams, and HomeServices of America guilty of inflating real estate commissions, with a $1.8 billion penalty.
  • Lead attorney Michael Ketchmark immediately filed a class action suit against NAR and other brokerages, intensifying potential nationwide consequences, including a challenge to the traditional commission model.
  • Notably, the case could also impact Florida’s political scene and the influential Florida Association of Realtors.

In a landmark legal ruling today, a jury found the National Association of Realtors (NAR), Keller Williams real estate brokerage, and HomeServices of America, guilty of conspiring to inflate real estate commissions and were ordered to pay $1.8 billion to the plaintiffs. The case stemmed from allegations of anticompetitive practices and price-fixing in the real estate industry, but has national implications, including a significant impact in Florida and how real estate agents collect fees from clients.

Following the verdict, Michael Ketchmark, lead attorney for the plaintiffs, immediately filed a similar class action suit against NAR and seven other major real estate brokerages, further amplifying the potential nationwide fallout from today’s judgment.

But the ruling could also portend signicant political ramifications in the Sunshine State. The Florida Association of Realtors is the largest trade association in the state and has a history of political involvement, having donated millions of dollars to various political groups, causes and candidates in 2022 alone. Although it’s not immediately clear whether the ruling will have political implications for the Florida Association of Realtors and candidates and campaigns the group supports, the judgment could eventually influence both the business and political landscapes in the state.

Tom Butler, a spokesman for the Florida Association of Realtors, declined to comment on the matter, directing all questions to the National Association of Realtors .

But the jury’s decision may also carry weight in Florida because it challenges the traditional real estate commission model, which has long been a standard in the industry. The plaintiffs argued that the traditional model inflates fees and ultimately harms the consumer. Given that the Florida Association of Realtors holds significant sway in state politics, any legal shakeup affecting the way commissions are handled could also potentially affect the group’s political spending capabilities, as much of the money donated to political causes comes from members of the organization.

The case also highlights the important role of technology in the real estate industry. Witnesses for the defense claimed that home search portals like Zillow have made the homebuying process more difficult for consumers, a notion the plaintiffs labeled as “nonsense.” Given Florida’s rapidly growing tech industry and its influence on various sectors, including real estate, this part of the trial might gain additional scrutiny in the state.

The verdict, which NAR plans to appeal, opens the door to a new series of questions around anticompetitive practices within the industry. Legal experts say the case sets a new precedent, with even more lawsuits likely to come in the weeks ahead.


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