Real estate sellers get $1.8 billion after court ruling on collusion between realtors.

Federal court presence has ruled that the powerful U.S. National Association of Realtors and several large brokerage firms conspired to artificially inflate the commissions paid to realtors. The decision could dramatically change the home buying process in the United States.

The National Association of Realtors and brokerage firms have been ordered to pay nearly $1.8 billion in damages. The ruling allows the court to issue multiples of three times the compensation, which could bring the total to more than $5 billion.

This decision could rewrite the entire structure of the real estate industry in the United States, lowering the cost of relocation when buying a home by''commission reductions. Under N.A.R. rules, the seller of a home must pay a commission to the agent providing services to the buyer, which sellers believe is coercion to pay inflated agent fees. The home sellers said the brokerage firms cooperated with the N.A.R. to comply with the so-called "cooperative compensation" rule. Under the ruling, however, sellers will no longer have to pay buyers' agents, and agents will be able to set their own commission rates, which can be cut in half or more. For example, the owner of a $1 million home will now have to pay up to $60,000 in agent commissions - $30,000 to their agent and $30,000 to buyers' agents.

The National Association of Realtors

N.A.R. with Keller'. 'Williams, Anywhere (formerly Realogy), Re/Max and HomeServices of America stood trial in Kansas City. Missouri homebuyers sued them for antitrust violations. They were seeking $1.78 billion in damages. Before the lawsuit, Re/Max and Anywhere Real Estate chose to settle, with Re/Max paying $55 million and Anywhere Real Estate, which includes Coldwell Banker, Century 21 Real Estate and Sotheby'\''s International Realty, paying $83.5 million in compensation. N.A.R., along with Keller Williams and HomeServices, went to court. Tuesday morning, after less than three hours of deliberation, the eight-member jury came to a decision: yes, there was a conspiracy and the defendants will have to pay damages, and those damages can be tripled.

Market Impact

How will the impact''s decision on the market - it's not yet clear, but what is clear is that the decision and the amount of compensation indicate a change in the way agents are paid commissions. Redfin, which previously pulled out of the National Association of Realtors, said the decision will encourage real estate buyers and sellers to rethink the standard practice of setting commissions at 5 to 6 percent.

"Traditional brokers will undoubtedly begin to teach their agents how to have a normal conversation about commissions," Redfin CEO Glenn Kelman said in a statement following the decision.

The impact on the association of realtors

More than 1.5 million real estate agents in the U.S. pay dues to the organization to''demanding the resignation of top N.A.R. executives after sexual harassment allegations came to light this summer, believes there was no conspiracy regarding commissions from agents and the N.A.R. failed its members by not presenting a stronger defense in court.

"They failed in their duty to me and all my colleagues as agents who paid monthly dues. If they had spent more time on the legal process and less time suppressing women, the outcome could have been different," he said.

Expectations and the future

Makenzie Morman, a financial analyst at Capstone LLC, said the decision is just the beginning of changes in the industry. She noted that the U.S. Department of Justice is likely to launch a fuller investigation''real estate processing in the United States.

"Antitrust issues are a major issue for the administration. Many consumers will be affected," she said in an e-mailed statement.

"We believe this is a significant blow to real estate brokers, but believe this is not the end. More battles lie ahead," she wrote. "This is the first domino to topple, but the National Association of Realtors is still on a roll. "

Brokerage firms that decided to enter into a settlement agreement before the lawsuit said they were happy with their decision.

"The agreement releases our company, agents and franchisees from liability in connection with these lawsuits. We don't care about the jury's decision, it doesn't change our agreement," said the c''an e-mailed statement from Anywhere Real Estate spokesman Trey Sartain. Those who had already lost previous legal battles with the N.A.R. were celebrating.

Jack Ryan, CEO of REX Real Estate, which lost an antitrust lawsuit against N.A.R., Zillow and Trulia in August, openly supports lowering commissions. In a text message Tuesday, he hailed the decision as "extremely good news for Americans. "

If the commissions can be lowered, "the cost of every home will go down, jobs and wages will go up, tax revenues will go up, people can easily move to higher paying jobs," he wrote.

It is now becoming apparent that more lawsuits will be filed. Minutes after the ruling