In a major blow to the real estate industry, Zillow Group Inc. and other real estate stocks plummeted after a Missouri jury ruled that the National Association of Realtors (NAR), Keller Williams, and Berkshire Hathaway's HomeServices of America colluded to maintain high brokerage commissions. The lawsuit, filed in Kansas City, Missouri, accused these industry players of engaging in anti-competitive practices.

Although Zillow Group Inc. was not named in the lawsuit, the impact of the verdict sent shockwaves throughout the industry. Two other brokerages, Re/Max and Anywhere Real Estate Inc., had previously settled with plaintiffs, agreeing to pay hefty sums - $55 million and $83.5 million, respectively. As part of the settlement, these brokerages no longer require agents to be members of NAR.

NAR and HomeServices expressed their intentions to appeal the jury's decision, stating that they will assess the verdict and trial record before deciding on their next steps. Keller Williams indicated that they will explore all available options, including avenues of appeal.

The implications of this verdict are substantial. HomeServices lamented that the decision would result in increased obstacles for buyers in an already challenging real estate market, while also making it harder for sellers to realize the value of their homes. They further suggested that it might force homebuyers to forego professional assistance during the complex and consequential financial transaction of purchasing a home.

The jury's ruling resulted in a staggering $1.785 billion in damages, marking the smaller of the two lawsuits related to brokerage commission practices. The industry now faces another challenge as the Justice Department focuses on a commission-sharing system that typically requires home sellers to pay a 5% to 6% cut of the sale, split between their agent and the buyer's agent.

These legal battles are shining a spotlight on the commission system, which is often seen as more expensive for consumers compared to other countries like Australia and the UK. In a worst-case scenario, the federal government could potentially ban sharing commissions, thereby prohibiting sellers' agents from compensating buyers' agents.

While NAR plans to appeal the verdict, a spokesperson for the association acknowledged that the resolution of the matter could take years. In the meantime, they intend to request the court to reduce the damages awarded by the jury.

The real estate industry now finds itself at a crossroads, as the outcome of these legal disputes could have significant implications for the future of brokerage commissions and the dynamics of real estate transactions.