The Impact of Missouri Jury’s Verdict on Real Estate Industry
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Zillow Shares Drop as Missouri Jury Finds Collusion on High Brokerage Commissions
Real estate stocks, including Zillow, experienced a 6% drop in stock prices following a recent verdict by a Missouri jury. The jury determined that the National Association of Realtors had unlawfully colluded to keep high brokerage commissions, resulting in nearly $1.8 billion in damages. This decision marks another blow to an already struggling industry which is facing a growing number of lawsuits relating to how real estate agents are paid.
The Justice Department Scrutinizes Commission-Sharing System
The commission-sharing system for real estate agents typically splits a 5% to 6% cut of the sale price between the agent and the representative for the buyer. Recently, the Justice Department has expressed concerns over this system and is investigating its legality. These investigations, coupled with the recent Missouri jury verdict, have placed a spotlight on the ways in which real estate transactions are conducted and could potentially lead to significant changes in the industry.
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The Missouri jury’s verdict serves as a reminder that the real estate industry is facing significant challenges in regards to how agents are paid. As the Justice Department continues its investigation, it will be interesting to see what, if any, changes are made to the commission-sharing system. Bloomberg reporters and editors will be keeping a close eye on these developments and will continue to provide the most accurate and up-to-date information regarding this issue.
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