A second defendant in two class-action lawsuits aimed at reducing real estate compensation fees has agreed to a settlement with plaintiffs. RE/MAX is one of the major brokerages that were named in the lawsuits, referred to in the Sitzer/Burnett and Moehrl cases, has agreed to pay $55 million to settle all claims against the firm. This news comes just two weeks after a third plaintiff, Anywhere Real Estate, previously called Realogy Holdings Corp., was settled to pay $83.5 million.
The National Association of REALTORS(r) which is which is also a defendant by the suit, stated it will continue to argue for pro-consumer, competitive regional MLS broker markets that allow listings brokers as well as their customers to decide on the amount of compensation that is offered to the buyer’s agent for MLS listings.
RE/MAX has denied the claims against it, however, they have informed media outlets that it has agreed to settle the case in order to eliminate the uncertainty surrounding lawsuits that are currently pending. The agreed settlement plan, that requires court approval RE/MAX states that it will agree to change its business practices, and no needing sellers to pay for the buyers agent’s fee. In all places the parent company for Coldwell Banker, Century21, Sotheby’s International Realty and Corcoran have also signed on to the same practices in business.
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NAR said in a statement that it is not dissuaded from its argument: “Settlement is always an option for any party in litigation. The recent settlements do not change how the case is presented to the court or NAR’s commitment to defend ourselves. We are confident we will prevail in proving the lawfulness of the rules under attack. Pro-competitive, pro-consumer local MLS broker marketplaces ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers. The practice of the listing broker paying the buyer broker’s compensation saves sellers time and money by having so many buyer brokers participating in that local marketplace and thus creates a larger pool of buyers for sellers. For buyers, these marketplaces save them the burden of extra costs at closing, enable them to receive professional representation and make homeownership possible for more people.”
The lawsuits assert that NAR rules violate antitrust laws and increase the amount of money paid to buyers’ agents by requiring an listing agent to pay an agent of the buyer for putting properties in the MLS. NAR claims that the lawsuits falsely portray the rules of the association as anticompetitive. The rules instruct listing brokers to decide in collaboration with their clients what compensation is given to buyers’ agents for the MLS listings. Additionally, NAR says buyer’s agents have the right to bargain compensation in conjunction with a listing broker which differs from the amount listed on the MLS. Both NAR as well as the MLS have any influence in determining commissions for brokers.
NAR recommends its members make use of buyers representation contracts that are simple, clear and written in written. It is crucial that REALTORS(r) to keep explaining that commissions are set by brokers and their customers and educating consumers about methods REALTORS(r) can assist in navigating the financial, legal and community aspects of purchasing and selling homes.
“In fact it is it is true that the U.S. model of independent local broker markets is widely regarded as the highest quality and the most effective worldwide that is free of additional or hidden costs, and more accurate and verified data compared to other nations. We look forward to making our case in the courtroom.