KARE 11 published October 31, 2023: Jury awards billons of dollars in damages to home sellers in case that could have nationwide implications. A jury in Missouri sided with thousands of sellers, who argued it was unfair to have to pay commission to both their real estate agent and the agent for buyers.
ThisisJohnWilliams published October 31, 2023: The END of Realtors | NAR LOST $1.8 BILLION LAWSUIT
HousingWire.com
written by Brooklee Han, Sarah Wheeler and James Kleimann
Tuesday October 31, 2023
A Kansas City jury has found the National Association of Realtors, HomeServices of America and Keller Williams guilty of colluding to inflate or maintain high commission rates through NAR’s Clear Cooperation Rule, in the Sitzer/Burnett buyer broker commission lawsuit.
The defendants have been ordered to pay damages of $1.78 billion. Treble damages could result in the NAR and brokerages paying roughly $5.36 billion. It also opens the door to additional potential copycat lawsuits being filed in other states.
The jury reached its verdict after a little over two weeks of testimony from the plaintiffs and defendants. During their testimony, the home seller plaintiffs and their lead attorney Michael Ketchmark argued that despite the defendants having antitrust rules and regulations in place, the trade group and corporate brokerages knowingly violated their own rules in order to maintain high commission rates.
Judge Stephen Bough, who is overseeing the suit, still needs to issue his final judgement on the case, before the verdict is final. He has wide latitude in issuing injunctive relief.
In the worst case scenario for the defendants, Bough could ban the cooperative compensation rule nationally on the multiple listing services, which would prevent listing agents and home sellers from predetermining buyer agent commission rates. Listing agents would also be prohibited from sharing commissions with buyer agents, and buyer agent commission rates would not be published in the MLS.
Alternatively, Bough could also keep elements of the rule in place and require an offer of at least one cent in “cooperative compensation” MLS field.
The class action antitrust lawsuit, which was originally filed in 2019, also included RE/MAX and Anywhere as defendants, however the two reached settlements in this suit as well as the two other commission lawsuits, Moehrl and Nosalek, in September.
In response to the verdict, Mantill Williams, a spokesperson for the NAR, said the trade group will be appealing the jury’s verdict and will also ask the court to reduce damages.
“We stand by the fact that NAR’s guidance for local MLS broker marketplaces ensures consumers get comprehensive, equitable, transparent and reliable home information and that brokerages of any size, service or pricing model get a fair shot at competing,” Williams said. “We will continue to focus on our mission to advocate for homeownership and always put consumer interests first. It will likely be several years before this case is finally resolved.”
Darryl Frost, a spokesperson for Keller Williams, said that crucial evidence was not allowed to be entered and alluded to an appeal being filed.
“We are disappointed that before the jury decided this case, the court did not allow them to hear crucial evidence that cooperative compensation is permitted under Missouri law,” he said in a statement following the verdict. “This is not the end. Keller Williams followed the law regarding cooperative compensation and stands by the evidence presented on the 100-year-old practice of sellers’ agents offering commissions to other agents who help market and sell homes. Looking forward, we will consider all options as we assess the verdict and trial record, including avenues of appeal.”
A spokesperson from HomeServices similarly vowed to appeal the ruling in Missouri.
“Today’s decision means that buyers will face even more obstacles in an already challenging real estate market and sellers will have a harder time realizing the value of their homes,” the spokesperson said. “It could also force homebuyers to forgo professional help during what is likely the most complex and consequential financial transaction they’ll make in their lifetime.”
In a statement, HomeServices said the cooperative compensation rule “helps ensure millions of people realize the American dream of homeownership with the help of real estate professionals.”
A spokesperson for Anywhere Real Estate also provided a statement noting that the company chose to settle in the case in early October without admitting to wrongdoing.
“The jury verdict, while disappointing, does not alter our settlement, and we look forward to obtaining court approval and implementing our settlement agreement,” Anywhere’s spokesperson said. “Anywhere strongly believes in the value of both buyer and seller agents to help consumers successfully navigate one of life’s most expensive and impactful transactions. We remain fully committed to supporting all agents as they expertly serve their clients.”
Zoodealio published October 20, 2023: National Association of Realtors Commission Lawsuit EXPLAINED. The class action lawsuit brought against the National Association of Realtors has been a wild ride this last week. From Gary Keller outright denying evidence of possible steering, jurors leaving to join the suit themselves, and the possibility of damages being in the billions.
A lot to unpack for this week but there will be more to come in the following days...
Chicago Agent Magazine
written by Emily Mack
Tuesday October 31, 2023
The National Association of REALTORS® (NAR), Keller Williams and HomeServices of America were found guilty of conspiring to inflate commissions and ordered to pay damages totaling $1.78 billion, a jury in Missouri ruled Tuesday.
In the class-action lawsuit, Sitzer/Burnett, Missouri homesellers alleged that NAR and the brokerages colluded to inflate fees paid by the homeseller, which currently hover around 6% of the home price and are split between the buyer and seller agents. Although the case only pertained to homesellers in the state of Missouri, it’s opened a larger conversation about buyer agent commissions and a similar lawsuit, Moehrl v. NAR, is ongoing.
The trial went on for more than two weeks with NAR CEO Bob Goldberg, HomeServices of America President and CEO Gino Blefari and Keller Williams Founder and CEO Gary Keller all taking the stand. In the end, it took the jury less than three hours to rule against the co-defendants.
Appeals are expected, which could delay changes to real estate transactions and fees by years.
“We disagree with the verdict but respect the jurors who decided the case based on the issues in front of them … This is not the end,” Darryl Frost, a spokesperson for Keller Williams said in a statement. “Looking forward, we will consider all options as we assess the verdict and trial record, including avenues of appeal.”
NAR President Tracy Kasper expressed a similar sentiment. “This matter is not close to being final. We will appeal the liability finding because we stand by the fact that NAR rules serve the best interests of consumers, support market-driven pricing and advance business competition,” Kasper shared in an update. “We remain optimistic we will ultimately prevail. In the interim, we will ask the court to reduce the damages awarded by the jury.
Previously, Anywhere Real Estate and RE/MAX were defendants in the lawsuit but settled in early October for $138.5 million, agreeing to make changes to buyer agent commission arrangements. The terms of that settlement are pending approval by a judge.
Around the same time as that settlement, Anywhere opened the option for agents from its many brands, including CENTURY 21, Coldwell Banker, ERA, Sotheby’s International Realty, Corcoran and Better Homes and Gardens Real Estate, to leave NAR. RE/MAX will also no longer require agents to be part of the association. In some markets, though, leaving NAR would also mean losing access to the local MLS.
🚨👇 BONUS RELATED NEWS 👇🚨
FOX 13 Seattle published October 9, 2023: Real estate agencies quit National Association of Realtors. The multi-billion-dollar real estate industry is being rocked by one of the biggest revolts in its modern history -- multiple agencies have decided to quit the group that’s long set the rules for realtors.
Chicago Agent Magazine
written by Emily Mack
Friday October 6, 2023
Agents from CENTURY 21, Coldwell Banker, ERA, Sotheby’s International Realty, Corcoran and Better Homes and Gardens Real Estate will have the option to leave the National Association of REALTORS® (NAR) pending a new settlement by parent company Anywhere Real Estate.
As part of a separate settlement, RE/MAX will also no longer require agents to be part of the association.
In some markets, though, agents who leave NAR may lose access to their local MLS. Additionally, agents who are not NAR members are not allowed to use the trademark Realtor designation.
Both Anywhere and RE/MAX were plaintiffs in two class-action, anti-trust lawsuits and settled out of court in September for $83.5 million and $55 million, respectively. Then, on Oct. 6, Anywhere revealed the terms of that settlement included making NAR membership optional for agents.
Hours later, RE/MAX followed suit, publicly announcing its own, similar, settlement terms. Both companies are dropping buyers’ commissions requirements, in addition to the NAR requirements, and adding that agents must clearly disclose that commissions are fully negotiable.
Despite the rule change, Anywhere CEO and President Sue Yannaccone emphasized the company’s support for buyers’ agents. “We strongly believe in sellers making offers of compensation to buyers’ agents to bring more eligible buyers to a listing, which increases the likelihood of a successful transaction,” Yannaccone said in a press release.
“We continue to believe in buyer agency, cooperative compensation and the idea that consumers are best served when they are working with real estate professionals,” RE/MAX President and CEO Nick Bailey also said.
The latest news comes just days after Redfin announced its own withdrawal from NAR, citing “a pattern of alleged sexual harassment” at the association plus the group’s fee requirements for buyer agents.
Earlier on Oct. 6, however — before the announcements by Anywhere and RE/MAX — the association said it will begin allowing listing agents to offer a $0 commission to buyer agents, reversing its previous stance on its own Participation Rule.
Meanwhile, NAR remains a defendant in the ongoing anti-trust lawsuits, along with firms like HomeServices of America and Keller Williams. The first case goes to trial Oct. 16.
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