Consequences to Real Estate Industry from $1.8 Billion Verdict
Realtors in America got an unpleasant Halloween surprise when a jury in federal court in Kansas City found that the National Association of Realtors and several large brokerage companies had engaged in a conspiracy to artificially inflate commissions paid to real estate agents. The jury awarded some $1.8 billion in damages – which is subject to tripling under the applicable antitrust statute.
While the case is being appealed, the decision could have major implications for the real estate industry and how agents are compensated.
Professor Jordan Barry of the USC Law School is the coauthor of a ground breaking paper that looked at the way that buyer agents are compensated and the phenomenon of agent based steering.
He joins the show to help us understand both the behavioral economics of the current agent structure and the implications of the on-going litigation.