CoStar: Homes.com Can Be a Beneficiary of a Potentially Industry-Upending Decision

Wide-moat-rated CoStar Group's Homes.com business could be a beneficiary of the long-term implications of the jury decision in Sitzer/Burnett versus National Association of Realtors lawsuit. The jury in the class-action lawsuit found NAR and other co-defendants (which includes large brokerages) liable for around $1.8 billion in damages for keeping home-seller brokerage commissions artificially high. The plaintiffs in the case claimed that real estate commission rates for home sellers were inflated upward because of the industry structure where home sellers are required to pay commissions to realtors representing buyers. The result of this class-action lawsuit can potentially have a seismic impact on the buyer-side brokerage commission rule, which has been a fundamental feature of the residential brokerage industry in the U.S. for decades.