'Conspiracy' front and center as commissions trial kicks off
On day two of the Sitzer/Burnett trial, the plaintiffs presented opening arguments, while the defense said conspiracy claims are "conjecture."
- The trial pits home sellers in Missouri against NAR and large brokerages, alleging that rules in place unfairly force them to pay buyer-broker commissions.
- Those rules reflect a conspiracy to keep commissions artificially high, the plaintiffs claim.
- NAR began its defense in the morning session, which is expected to continue into the afternoon along with opening statements from Keller Williams and HomeServices of America.
KANSAS CITY, Mo. — Allegations of a conspiracy to inflate buyer-broker commissions dominated the opening arguments made by the plaintiffs on the second day of the highly anticipated Sitzer/Burnett trial in U.S. District Court.
The Tuesday morning session began with the plaintiffs' lead attorney Michael Ketchmark explaining why the class of home sellers is seeking significant damages along with major changes to how buyer agents are compensated.
The lead attorney for the National Association of Realtors also began his opening arguments ahead of the midday break. NAR's defense is expected to continue in the afternoon session followed by arguments from the attorneys for Keller Williams and HomeServices of America.
The plaintiffs state their case
Ketchmark laid out the plaintiff's claims of a price-fixing conspiracy, zeroing in on what he believes the defendants have done to keep real estate commissions around 6% — which typically includes an even split between buyer and seller agents — for decades.
He targeted some of his opening remarks at Multiple Listing Services, which he said played a big role in keeping commissions inflated, and took specific aim at Keller Williams, introducing several examples of contradictory statements related to how the firm talks about maintaining full commission levels.
Ketchmark noted that commission rules and practices have been in place for decades, but the homeowners of Missouri are taking action to try and change them.
"Just because [the defendants] have been getting away with something for a long time does not make it right," Ketchmark said.
Ketchmark also touched on "steering," the idea that buyer agents may avoid listings that include a lower commission, as well as other tactics that he claims hurt home sellers who choose to offer lower or zero-dollar commissions for the buyer-broker, or who list outside the MLS.
NAR disputes the claims
In his opening remarks, NAR lead attorney Ethan Glass indicated that the trade association doesn't force anyone to do anything, and that it exists to help homebuyers and sellers.
Glass also noted that the plaintiffs' claims are based on conjecture, and records or documentation are needed to prove that a conspiracy was taking place. The plaintiffs signed a contract, he said, so they knew what to expect when they agreed to hire an agent to sell their home.
Glass did not touch on commission percentages, a key part of the plaintiffs' allegations, during the morning session.
As both sides continue to lay out their cases, the industry will be watching closely, as a verdict favoring the plaintiffs could have wide-ranging implications.