Yet another national real estate brokerage firm has reached a settlement agreement in two of the major class action antitrust lawsuits facing the real estate industry.
According to court documents filed on Monday, RE/MAX and the home sellers suing the firm in both the Moehrl and Sitzer/Burnett cases, which both deal with buyer brokers’ commissions, have reached a preliminary settlement agreement, settling all claims in both suits.
RE/MAX’s settlement agreements, as well as the earlier settlement agreements reached by Anywhere Real Estate, must be approved by the U.S. District Court judges in Illinois (Moehrl) and Missouri (Sitzer/Burnett), who are overseeing the two lawsuits.
Details of the settlement agreements will not be disclosed until the plaintiffs file a motion to approve the settlement agreements.
However, a filing with the Securities and Exchange Commission reveals some details of the RE/MAX settlement.
“The Settlement resolves all claims in the Lawsuits and similar claims on a nationwide basis against RE/MAX … and releases RE/MAX and the Company, their subsidiaries and affiliates, and RE/MAX sub-franchisors, franchisees and their sales associates in the United States from the Claims,” the SEC filing reads.
“By the terms of the Settlement, RE/MAX agreed to pay a total settlement amount of $55.0 million … into a qualified settlement fund. In addition, RE/MAX agreed to make certain changes to its business practices.”
According to Steve Berman, the managing partner and co-founder of Hagens Berman Sobol Shapiro LLP, which represents the plaintiffs in the Moehrl suit, the Anywhere “settlement includes significant changes to Anywhere’s practices relating to the conduct that we have challenged,” as well as an agreement for the firm to pay a total of $83.5 million for both lawsuits.
In addition, RealTrends Consulting co-founder Steve Murray believes that the settlement agreements will prevent firms that operate under a franchise model from requiring that franchises belong to a Realtor association at any level, that franchises abide by the Realtor Code of Ethics, and that franchise abide by Realtor-affiliated MLS guidelines.
After Anywhere and Keller Williams’ RE/MAX’s settlements, the only defendants left in the two lawsuits are the National Association of Realtors, HomeServices of America, and Keller Williams.
The two lawsuits take aim at NAR’s Participation Rule, which requires listing agents to make a blanket offer of compensation to buyers’ agents in order to list the property on a realtor-affiliated multiple listing service (MLS). According to the plaintiffs, commission sharing inflates the costs for consumers, in violation of the Sherman Antitrust Act. NAR contends that the current commission structure, which has been in place for over 100 years, actually helps consumers.
Damages in the Sitzer/Burnett suit are anticipated to be up to $4 billion, while damages in the Moehrl suit are expected to reach up to $40 billion.
The Sitzer/Burnett trial is slated to head to trial on October 16, 2023. While a trial date for the Moehrl suit has yet to be set, it is expected start in early 2024.
Keller Williams did not wish to comment and the other parties did not return a request for comment.