A few years ago, a group of Missouri home sellers filed a class-action lawsuit against the National Association of REALTORS (NAR) and several other codefendant real estate franchises. The plaintiffs’ attorneys claimed multiple listing service (MLS) rules violated the Sherman Anti-trust Act and was conspiring to inflate commissions artificially. In October, a jury issued a verdict in favor of the plaintiffs and awarded $1.78 billion in damages.

Since the verdict has been released, all the named defendants have announced their intention to appeal and strongly disagree with the decision. The appeal process for this case could take almost a year for an appellate court to hear the case and issue a decision. Now that the verdict has been issued, what does it mean for consumers in Missouri, and why do the defendants disagree with the jury’s decision?  

NAR and the codefendants believe that all parties in a real estate transaction should be able to have their own representation. In addition, all commissions paid to real estate professionals are and always will be negotiable. Buyers and sellers can negotiate a compensation structure with their broker that works best for them based on their circumstances and needs.     

When a seller in Missouri decides to list their property with a real estate professional, they enter into a written listing agreement with a real estate broker. The listing agreement includes the duties and responsibilities of the broker and their agent(s) and the terms of compensation paid to a broker by the seller when a property is sold. The listing agreement also specifies if compensation can be shared with cooperating brokers representing buyers of the property. Buyers similarly enter an agreement with a buying broker outlining how compensation will be paid for their services.  

The MLS system is a database of current homes for sale and information on past sales. The Columbia Board of REALTORS (CBOR) operates the local MLS. When a broker takes a listing to represent a seller, they enter the property data into the MLS system. This includes the compensation the listing broker offers to share with a cooperating buyer’s broker. The MLS creates a single competitive marketplace that is efficient, transparent, and allows consumers to see all the properties offered for sale at a point in time.

As of now, the local real estate market in our area will continue to operate as it did before the jury issued its verdict in October. As a result of how the current market functions as previously described, the defendants disagree with the jury’s verdict. There could be changes after all possible appeals have expired.

For now, sellers and buyers still have many choices when it comes to selling or buying a home, whether they use the services of a real estate professional or decide to sell or purchase a property themselves. In addition, CBOR will also continue to educate real estate professionals on anti-trust laws and maintain an MLS system that works to benefit consumers.

Brian Toohey is the chief executive officer for the Columbia Board of REALTORS.