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Florida Realtor Alexandré Worthington is already bracing for a shift that threatens a tear down a compensation system that has ruled his industry for more than a century.

“It’s the perfect time to pick up the pieces,” Worthington said. “It’s a perfect time to reflect on the changes that could be coming and how to prepare for them.”

In a federal civil case, a Kansas City jury last month found the National Association of Realtors (NAR) and major brokerages conspired to keep commissions artificially high. The result has left the real estate industry holding its collective breath, as experts say it is on the cusp of a radical reorganization that could affect everything about the business.

“There’s a lot of speculation out there around how this will play out,” said Ryan Tomasello, who covers the real estate technology sector for Keefe, Bruyette & Woods. Although much remains uncertain, “we have a high degree of confidence that, at the conclusion of this storyline, significant changes will be made to the commission structure in the U.S.”

The most immediate and striking blow could come as a result of the federal case in Kansas City, Mo. The judge overseeing the case has the power to issue an injunction that could break up the century-old “bundled” or “cooperative” commissions system, in which sellers’ and buyers’ agents split a commission that typically ranges between 5 and 6 percent of the home sale price. The timing of such an action remains unclear.

A settlement in which NAR agrees to change the system is also possible, according to Michael Ketchmark, the lead plaintiff attorney. “We’re in the process of having conversations with the [Justice Department] and NAR, and we remain hopeful that we’re going have a resolution that brings relief to millions across the county,” he told The Washington Post.

How real estate commissions work and why they might get lower

In 2019, a group of home sellers sued NAR and brokerages Keller Williams and HomeServices of America in the Kansas City federal court, accusing the organizations of conspiring to keep commissions artificially high by requiring sellers to make the cooperative commission offer before listing homes on a widely used property database — the Multiple Listings Service — that allows for-sale properties to receive notice. The plaintiffs alleged that the system stifled competition and inflated commissions for buyers’ agents.

NAR, Keller Williams and HomeServices of America have denied those allegations and vowed to appeal the Oct. 31 verdict that awarded $1.8 billion to a half-million Missouri home sellers, an amount that could swell to $5 billion. Those organizations say the existing commissions structure is transparent, and they denied that the payment structure was anticompetitive. NAR said after the verdict that the “matter is not close to being final.”

Mantill Williams, an NAR spokesman, said the association is open to a resolution that “maintains a way for buyers and sellers to continue to benefit from the cooperation of real estate professionals and eliminates our members’ risk of liability for the claims alleged.”

“That being said,” he added, “we remain confident we will prevail on our appeal.”

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