After a $1.8 billion verdict, the clock is ticking on the 6% real estate commission.

Two other firms initially named in the suits brought by home sellers – Re/Max and Anywhere Real estate, formerly known as Realogy, which is the parent company of Coldwell Banker, Century 21, Sotheby’s International Realty, and Corcoran—settled out of court for a combined $140 million. As a term of the settlement, they each announced a commitment to make changes in their business practices, including not requiring agents to be members of NAR.

While state governments license real estate agents, NAR has an extensive code of ethics it expects members to adhere to. NAR and the brokerages have vowed to appeal the verdict, which means real estate commissions aren’t going anywhere immediately.

NAR has been fighting off US antitrust officials and litigation for years regarding anti-competitive practices, and this verdict is the association’s biggest setback yet. This verdict is just from one of several lawsuits currently filed against NAR, which is also facing scrutiny from the US Department of Justice. NAR has already faced a difficult year, setting aside the verdict and the troubled housing market.

In August, the NAR president, a member agent named Kenny Parcell, resigned amid sexual harassment allegations. Last month Redfin, an internet real estate company, left the association

On the commissions, NAR has said they will appeal the verdict and that the issue won’t be resolved for years.

“This matter is not close to being final as we will appeal the jury’s verdict,” said Mantill Williams, NAR vice president of communications. “In the interim, we will ask the court to reduce the damages awarded by the jury.”

“This is not the end,” said Darryl Frost, spokesperson for Keller Williams.

What was the case about?

The cornerstone of the plaintiff’s argument is that NAR is forcing homesellers to pay an inflated commission that is then split between their agent and the buyer’s agent. The homesellers argued commission sharing as a condition for access to the Multiple Listing Service was unfair and kept commissions artificially high.

Typically, when a home goes on the market for sale, the seller offers their broker a set commission. For decades, the commission has consistently been around 6% of the sale price, usually with a 3% split for the buyer’s and seller’s agent.

In a competitive market, the homesellers argue, the cost of the buyer’s agent’s commission would be paid not by the seller, but by the buyer who received the service. The sellers said that the buyers should be able to negotiate the fee with their agent, and that the sellers should not be on the hook for paying it.

NAR and the other defendants argued in court that their commissions are always negotiable. They also said that the system of having the seller’s agent split the commission with the buyer’s agent allows buyers, who are already weighed down with expenses like a downpayment, closing costs, inspections, and appraisals, to avoid the added expense of having to pay an agent as well.

Consumer advocates celebrated the verdict and hoped that plaintiffs would also receive their request for the judge to order changes to how commissions are structured in the industry.

While already large, the award could grow even more—to a total of $5 billion, depending on what the judge decides.

The jury clearly saw the industry had restricted price competition to a point where it could ensure nearly uniform 5%–6% commissions, said Stephen Brobeck, a senior fellow at the Consumer Federation of America. Jurors made their decision quickly, he said, deliberating for only a few hours.

“The extent of injunctive relief decided by the court will strongly influence whether a price-competitive system develops that lowers consumer costs and increases the quality of services,” Brobeck said. “We hope that the court will sever the ties between listing agent and buyer agent compensation, freeing sellers from the obligation and need to compensate buyer agents.”

Impact of commissions on buyers and sellers

Not much is expected to change in the near term with regard to how commissions are set, agents say.

The longer-term impact of the verdict may be that the pairing of buyer’s agent commission and seller’s agent commission will eventually be separated.