Minutes after the jury of the Sitzer/Burnett trial returned from two hours and 28 minutes of deliberation to issue its verdict, Byron Lazine started a 90-minute live broadcast to share the breaking news of what he called “the biggest loss of all time in the real estate industry.”

Announcing the verdict—the federal jury awarded the plaintiffs $1.785 billion in damages for conspiracy to enforce the cooperative compensation rule—he invited viewers to share their questions and comments in the live chat. He also welcomed and responded to live callers, starting with Tim Macy (@timmacyrealtor) of Real Brokerage. 

It was during Byron’s conversation with Macy that he spoke about Gary Keller’s testimony on Friday (October 27) and early Monday, including his cross-examination by the plaintiffs’ lead attorney, Michael Ketchmark. 

The real issue is the impact this had on the jury—particularly because the average consumer doesn’t know how the real estate commission system works and why it works. 

“My problem was that I don’t think the jury is going to understand what they’re even talking about. Gary Keller (was) saying, ‘I’m talking about Zillow.’ I don’t think they (the plaintiffs) get the nuances of the commission compression that he was talking about in that email to Keller Williams leaders back in 2017, two years before these lawsuits happened. Because no one took the time to explain to the jury those nuances—not NAR, not Keller Williams’ attorney, from everything that I read, not BHHS’s attorney.”

Byron Lazine

Strong Reactions Towards NAR

Macy referenced part of the closing argument for the National Association of Realtors (NAR) attorney Ethan Glass, pointing out that he was talking down to the jury, which almost certainly contributed to the outcome.

“This is what NAR has always done. They talk down to people….and when you talk down to a jury…they are going to react. And it only took them an hour and a half to ask for the damages calculator, and two hours and 28 minutes to come to a verdict. And their verdict was NAR, Keller Williams, BHHS (HomeServices), pay 1.785 billion in damages.”

Byron Lazine

While Macy agreed, he noted how resilient real estate agents are.

“We’re ready to roll. We’re problem solvers, we’re going to figure this out and keep this thing moving. But I really hope we get some changes at NAR as a result of this.”

Tim Macy

Growth Ambassador , REAL

Additional calls started coming in, including one from Jason Haber (@jasonhaber), founder of the NAR Accountability Project, and Jose Cifuentes (@thejosecifuentes), a Keller Williams agent in LA. They were quick to point out NAR’s role in the trial. 

“I was bitterly disappointed…but it’s a sign of bigger problems within the organization. The CEO Bob Goldberg should resign today, in disgrace…These people have failed us…they are poor ineffectual leaders, and they need to go. Not just because of this, but because of their positions in sexual harassment and toxic workplace that have been documented in gross detail up to this point…this is such a broken organization.”

Jason Haber

Founder, NAR Accountability Project

“I don’t know how, from a credibility standpoint, we can willfully pay dues to an organization that will turn around and destroy our business. From a strategic standpoint, for business continuity, we are trying to fight other battles. And to have our own organization—to which a lot of us belong to—go around and completely ruin our business with how they represented us…is completely concerning, and quite honestly, I think this is the end of NAR.”

Jose Cifuentes

LA Keller Williams Realtor

As Byron took live calls and examined everything that led to the disappointing verdict, viewers asked questions and shared their thoughts in the live chat. Here’s a small sampling:

Zachary Foust (@zachary.loft) called in to ask, “What do you think this means for the future of NAR and its relationship with local and big brand brokerages?”

While we don’t know exactly how this will change NAR’s role just yet, most expect major changes in the future. 

“You hear some of the reactions and the pain in the last hour…that people are feeling toward the National Association of Realtors. This is on top of what we haven’t been talking about the last two and a half weeks—which is the sexual harassment allegations. 

“I think this hurts the relationship with local and big brand brokerages, because they are going to have to make the decision here, (the one) that RE/MAX made, that Anywhere and its brands have made…they are going to have to give agents that option to remove themselves away from NAR. In 12-18 months, NAR membership is going to look dramatically different, whether they turn this appeal over or not.”

Byron Lazine

Is a lack of value proposition to blame?

While many immediately pointed a finger at NAR, others argued that there’s an underlying issue with the entire industry. 

J.R. Torchon of the “Let’s All Win” team at eXp (@letsallwinjr) kicked off this conversation when he called in, admitting he wasn’t surprised by NAR’s defeat in court and answering Byron’s question as to whether he thinks the blame rests solely on NAR. 

“The blame isn’t solely on NAR. I think we as an industry…have lacked the value proposition as a buyer’s agent, as an industry as a whole, where they see that these are inflated commissions. They see that, (and say) what do I need a buyer’s agent for? …We haven’t really gotten the right value proposition out there. 

“And as far as my membership with NAR, it is purely a business transaction. I don’t feel that there’s any value…but I do think there’s a reason why a lot of people are members, and that’s because there’s a mandatory requirement in certain areas. If you want to be in business, you have to be a NAR member. And if that changes, I think NAR will not exist.”

J.R. Torchon

Broker, Lets All Win at eXp

Stu Jacobson (@realestateexampro) and Andrew Caniff (@aecaniff), also called in to share their perspectives on the systemic issues that led to the verdict:

“I do believe strongly that, in general, we as an industry have not created a really great value proposition on the side of buyer’s agents. Two to three years ago, a lot of the messaging was ‘Why should you use a buyer’s agent? We’re free.’”

Stu Jacobson

Prep Agent

“I think the whole thing stems from transparency…I think lots of people in the industry aren’t sitting down with their sellers discussing what this actual commission towards the buyer’s agent is going towards.”

Andrew Caniff

Jacksonville Realtor

Some reactions in the live chat during this segment of the live broadcast:

Byron wrapped this section up by talking about the incredible coverage of the case—with live updates from Inman Deputy Editor Andrea V. Brambila throughout. To most real estate professionals the evidence didn’t point to what industry insiders would consider as overwhelming evidence of a conspiracy. 

“I thought the evidence was weak, but the fact that the jury took 2 hours and 28 minutes to deliberate and came down with a verdict that awarded (nearly) $1.8 billion in damages to these home sellers…means that the jury felt completely opposite of the way you and I thought. And we’re probably biased, for sure, but it also tells you how pathetic of a job NAR did at defending this case, and I’ll put Keller Williams’ attorney…and BHHS (HomeServices) attorney under the bus…but I give Keller Williams and BHHS a pass, because this should have been led by the leader of the industry.”

Byron Lazine

Is Zillow a winner in this case?

After the trial, plaintiffs’ attorney Ketchmark said he wants to take this national and turn the buyer experience over to technology.

 “Our hope and goal is to free the grip they have on homesellers across the United States. It’s time that the free market and the internet is allowed to do its work and to bring the savings to homeowners that they’re so entitled to when they sell their homes.”

Michael Ketchmark

Head attorney for Sitzer/Burnett plaintiffs

What does that mean, exactly? Well, we all know Zillow is the first place consumers go when searching for homes online. “Technology equals Zillow,” Byron said. “So Ketchmark is basically saying Zillow is the winner, along with him.”

In the meantime, Ketchmark announced a new lawsuit in Missouri that names the following defendants, along with NAR: 

  • Compass
  • eXp World Holdings
  • Redfin
  • Weichert Realtors
  • United Real Estate
  • Howard Hanna
  • Douglas Elliman

“If you are a brokerage in a state that hasn’t been impacted yet, get your ducks in a row. Don’t wait for NAR to help you. They have shown an inability to be able to protect buyer agency in this country, to be able to help brokerages….this was a final straw moment for many with NAR.”

Byron Lazine

Byron also pointed out that, for many of these companies, losing a case with a $1.8 billion payout would wipe them off the map. What you don’t see on that list are companies like Zillow that use technology to enable potential buyers to shop for homes without using an agent.

“The winners are Ketchmark, the winners are tech companies. They are close to the customer. The buyer experience starts on Zillow. The buyer experience very infrequently starts with the lender or the agent, that’s just the reality…Zillow gets closer to the customer here.”

Byron Lazine

What’s next for agents?

In response to the verdict, many real estate agents are wondering, “Now what am I going to do?” As highlighted by Byron, NAR lacked the ability to connect with the jury—and in turn, the everyday person—and to educate them during the trial. The silver lining in this situation is the agent who educates in the new world is the agent who moves forward. 

But it’s going to take a lot more than a few data-driven posts scattered on your Instagram Feed. As Byron said, “You have to be all in at this point.” 

He stressed the importance of having extremely high standards in the way you operate and the way you conduct business. Consider every moment in your community as an opportunity to apply for a job—because it is. 

“There are still going to be 4 million transactions that take place over the next 12 months. I guarantee as the consumer learns about this, as things change…the real estate professionals that know more than anyone in their market, that are deep in the knowledge, that show up as a professional, that have high standards…we have to move forward with the full-time professionals.

“Those who have high standards, treat consumers with absolute respect, bring extreme value, can articulate that value, and negotiate in good faith…are going to be fine.”

Byron Lazine

For those who are feeling overwhelmed and don’t know where to begin, consider Byron’s parting words:

“Get back into your business and think about how you can serve your clients at the highest level possible. You do that hour by hour, call by call, email by email, appointment by appointment, step by step. Do it three times harder this winter than last winter, because that’s what it will take to succeed. Put your head down and be a professional.”

Byron Lazine