Jurors on Tuesday awarded $1.8 billion in damages to about 500,000 Missouri home sellers. The case has been winding through federal courts since 2019, when a group of home sellers alleged in a lawsuit that the National Association of Realtors (NAR), along with real estate firms Keller Williams Realty and HomeServices of America, conspired to keep commissions artificially high.

The plaintiffs pointed to an NAR rule that required sellers to make a nonnegotiable commission offer before listing homes on the property database, the Multiple Listing Service, or MLS, which feeds widely used real estate sites including Zillow. That commission hovers around 5 to 6 percent of the sale price and is paid by the home seller to the sellers’ agent and the buyers’ agent. If sellers do not agree to the commission terms, they go virtually unseen in the market, Ketchmark said.

The rule has stifled competition and has resulted in higher prices, the plaintiffs alleged. They argued that if the rule were not in place, buyers would pay commissions to their own agents while buyers’ agents would have to compete by offering lower rates. The lawsuit pointed to countries whose total real estate commissions average 1 to 3 percent, such as the United Kingdom, Singapore, the Netherlands, Australia and Belgium.

Analysts say Tuesday’s verdict, as well as a similar class action case against NAR in Illinois, could change the way commissions work, particularly if the judge overseeing the Missouri case issues an injunction barring predetermined commission rates, as well as shared commissions between buyer and seller agents, analysts with Keefe, Bruyette & Woods wrote in a research note Tuesday.

They said changes could come if regulators such as the Justice Department intervene.

“We believe it is possible that the DOJ would proactively weigh in during the injunction determination in order to make the changes that it believes is necessary to promote a fair and competitive market,” the analysts’ note said.

The analysts predicted in an October report that changes to the system could reduce the $100 billion consumers pay in commissions by 30 percent. “From a catalyst perspective, a court-ordered injunction could ‘unbundle’ commissions nationally by early 2024, eliminating the longstanding practice of listing agents and sellers setting and paying buyer agent commissions,” the report states.

Investors immediately reacted. Zillow shares dropped almost 7 percent Tuesday, and Redfin shares sank 5.7 percent.

Mantill Williams, a spokesman for NAR, said the association will appeal the verdict, adding that “this matter is not close to being final.”

“We stand by the fact that NAR’s guidance for local MLS broker marketplaces ensures consumers get comprehensive, equitable, transparent and reliable home information and that brokerages of any size, service or pricing model get a fair shot at competing,” Williams said.

HomeServices, whose parent is Warren Buffett’s Berkshire Hathaway, said in a statement that the company will also appeal the verdict. “Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes,” the company said in a statement.

Keller Williams spokesman Darryl Frost said the company is “disappointed that before the jury decided this case, the court did not allow them to hear crucial evidence that cooperative compensation is permitted under Missouri law.”

RE/MAX and Anywhere Real Estate were originally defendants in the Missouri and Illinois lawsuits before settling in early October. RE/MAX said it agreed to pay $55 million into a settlement fund, while Anywhere said it agreed to pay $84 million.