Big Real Estate Brokerage Firms Finalize Historic Settlements to Change Real Estate Commissions Across the US
Three major real estate brokerage firms, Keller Williams, RE/MAX, and Realogy, are set to appear in court on Thursday in hopes of finalizing significant settlements that could lead to sweeping changes in real estate commissions across the US.
The agreements, totaling around $209 million, come following similar preliminary settlements from the National Association of Realtors (NAR) and Berkshire Hathaway Energy’s HomeServices of America, amounting to $418 million and $250 million, respectively, which are also up for final hearings in November.
These settlements are the result of a landmark antitrust lawsuit that accused the NAR and the real estate firms of engaging in anticompetitive practices that disadvantaged home sellers and buyers across the country.
The NAR, in particular, has agreed to eliminate the requirement for brokers listing homes on the group’s MLS databases to offer compensation to a buyer’s agent. These changes aim to address concerns of collusion between NAR and brokerage firms, allegedly violating US antitrust law.
For some real estate professionals, like Michael Downer, a broker with Coldwell Banker, the NAR’s practices created a system that incentivized agents to prioritize homes offering higher commissions, disadvantaging sellers who tried to negotiate lower fees.
If approved, these settlements could significantly impact the real estate industry, dismantling the NAR’s stronghold over a system long criticized for its inequities.
Opponents of the settlements argue that the proposed agreements are disproportionate to the jury’s verdict in the Missouri trial, which allowed for treble damages of up to $5.3 billion. The settlements, which total around $900 million, involve a much larger class of plaintiffs, potentially diluting the amount each individual seller may receive.
Overall, these settlements mark a crucial moment in the real estate industry, signaling potential changes that could benefit both home sellers and buyers nationwide.
