With the addition of a $418 million payment by the National Association of REALTORS® (NAR) agreed to last week, the industry has now agreed to pay out a total of $626 million to settle commission lawsuits filed by recent homesellers, who successfully argued to a jury in October that commissions were illegally fixed by real estate power players.
Plaintiffs in that case, however, are looking for more. In a filing yesterday, attorneys who represented the Burnett plaintiffs are asking a judge to confirm the final award in that case as well as triple the damages—which, after subtracting the settlement total, comes to $4.73 billion.
On top of that, the plaintiffs are also asking for 5.4% interest from the date of the verdict until the final settlement.
“The Settlements with Keller Williams, Anywhere and RE/MAX will not be finalized for at least two months, and the Settlement with NAR will take several more months. But there is no just reason to delay final judgment as to the HomeServices Defendants while the settlement process moves forward,” they wrote.
Chris Kelly, executive vice president of HomeServices, tells RISMedia via email the filing was “anticipated and aligns with the post-trial motion schedule that was mutually agreed upon with the Court.”
“We look forward to presenting our reply briefs later in April,” he says.
In their arguments, the plaintiffs note that HomeServices has already disputed that it would be appropriate to award interest in this scenario.
These endgame moves for Burnett come as the industry at large is still deep in the uncertainty of legal challenges. Despite the NAR settlement, buyer lawsuits and a Department of Justice (DOJ) investigation are far from any conclusion. Every settlement agreed to so far must also be approved by a judge, and the DOJ has already demonstrated that it is willing to intervene in these settlements.
Monetary judgments and settlement amounts have also sparked controversy. Although a nationwide class of sellers has not been certified, NAR and the companies that have settled so far say they believe their agreements will apply to any such class.
Even if the full judgment is eventually rendered and paid, after attorney’s fees are deducted, a member of that nationwide class of homesellers (anyone who sold a home in the United States over a four year period) would receive a check for only a couple hundred dollars—about $150 on the low end—based on Federal Reserve and NAR data on home sales and MLS usage.
Attorneys who represented plaintiffs in the Burnett and Moehrl cases—132 lawyers and paralegals across nine firms—have already requested one-third of the settlement funds for their own fees, though the judge is deferring any consideration of fees until the rest of the post-trial process plays out.
At the Burnett trial, damages were calculated as approximately $7,000 paid per seller in overinflated commissions.
Complete bull crap, nobody but the attorney and their pack are the only ones benefiting from this crazy law suite.
This is just ridiculous . There have always been discount brokers out there that these sellers had the option to work with, but they chose to use a brokerage who cooperated with buyers agents. Nobody forced them to sign the contract, they did it of their own free will!
True, the clients all had a choice, signed all the forms before all services started, and yet NAR can’t seem to defend itself. All institutions are under attack
This lawsuit is ridiculous and the verdict is even more outrageous. The sellers paying commission to the listing agent and the buyer’s agent is the cost of marketing their property. Without the buyer’s cash funds or the buyer obtaining a mortgage, there are no seller proceeds. This verdict, which is only making 132 lawyers richer will be detrimental to already struggling buyers trying to come up with down payments and settlement costs.
This is the most ridiculous lawsuit and ruling. The only people that lose here are future buyers. In the end the price of homes will remain the same, and in some cases where the sellers do not want to pay buyers agents, the buyers will have to pay out of pocket and bring more money to the table. This amid all the inflated cost of living and high mortgage interest rates will not help future home buyers and sellers at all.
So the lawyers’ fees aren’t negotiable at all, but that’s OK. As long as it’s not “price fixing” they can charge whatever they want and the client has no say.
NAR didn’t do their job! This verdict only hurts the industry more and discriminates against 1st time home buyers since they can not now afford to be represented by a buyer’s agent. These people had choices, for example: For Sale By Owner, or a discount brokerage. However they did not want to put the time and effort that goes into selling their property with these other options. They keep suggesting that this is better for the buyers…it is not!
Cant the seller still offer a “finders fee” to the buyers agents? Just dont call it a commission.
This will really hurt any Veteran/military buyers who plan on using their benefits of the VA loan. These attorneys and others just crippled the chance for our military individuals to purchase a home.
The seller pays the LISTING firm of their choosing, signed a listing contract that included an commission paid to the LISTING FIRM to market their home for the highest price, in the least amount of time, and with the least inconvenience. To accomplish that end the LISTING firm agreed to share a portion of THEIR COMMISSION with a cooperating broker that had a willing and able buyer. What am I missing here? In this post PPP fraud and greed, this 40-year veteran is embarrassed on behalf of any seller that participated in this sham but takes some joy knowing most will never see more than enough to buy a dinner out while these parasite attorneys make millions.
The very idea that the commissionable amount paid to the buyer’s agent cannot be mortgaged is outrageous. It has been that way since the advent of housing. It’s in the total sales price of the home that, in 90% plus of the time, the appraisal meets.
On the other hand, I have been in and around the RE business since 1976. And, as a broker, I have the ability to adjust the commission on a property to get the sale completed, and have never balked at doing so. I have even helped the sellers improve their property to gain a better price. I do this because I believe it’s my job. I get paid to move property not sit on them. In other words the customer comes before my bank account. Furthermore, I have never had buyer’s agent complain about a lower commission. It is my belief that it will be the newer younger agents who will complain and abuse the system for their own gain and nothing else, which doesn’t surprise me, because this new generation of realtors is out of touch with what their job is.
The selling brokerage has a right to ask and set their commision rate . If the seller does not agree they are free to interview other realtors . It is as simple as that. In a free society we should be able to place a price on our services. For example when a contractor completes a job you cant go back to him and say You charged me too much I want my money back. This lawsuit is absurd. Were not the houses sold ? Mission accomplished!