Last Friday, RE/MAX unveiled the terms of its settlement of two major class action lawsuits targeting agent commission that will resolve all claims against the company (and its agents and franchises).
The agreement, unsurprisingly, mirrors the terms that Anywhere Real Estate affirmed in a settlement struck only a couple weeks earlier. Most notably, both RE/MAX and Anywhere will cease requiring franchises to be part of the National Association of REALTORS® (NAR) and will provide education and disclosures around commission “transparency,” along with disallowing software that sorts listings by buyer commission.
RE/MAX also agreed to pay $55 million, less than the $83 million Anywhere agreed to. Both companies said they do not expect any major financial impact due to these payments.
“We continue to deny the allegations made in the complaints and in no way acknowledge any wrongdoing. We also continue to believe in buyer agency, cooperative compensation and the idea that consumers are best served when they are working with real estate professionals,” said RE/MAX President and CEO Nick Bailey.
This broadly aligns with comments made by Anywhere executives, who also reiterated their commitment to the current commission model in real estate, which is the main focus of the lawsuits (both still slated to go to trial in the coming months).
HomeServices of America and its subsidiaries, along with Keller Williams and NAR remain defendants in the lawsuits, which allege that NAR rules, broker policy and other industry practices, including agent training, enforce an anti-competitive and anti-consumer structure that inflates commissions.
One trial, in a case known as Burnett/Sitzer, is scheduled to start one week from today, while the other, known as Moehrl, will take place early next year.
But as the lawsuits go forward, RE/MAX at least won’t be able to fully move on from the litigation. In the company’s settlement agreement, there is a stipulation requiring RE/MAX corporate (not franchises) to “provide valuable cooperation to plaintiffs” in the lawsuits, even as it is no longer a target of claims.
Specifically, RE/MAX is required to withdraw expert witnesses it retained for the trials, disallowing them from testifying for the other brokerages still fighting the suits. The company must also provide three of its own current employees as witnesses for the Moehrl suit.
Additionally, the agreement requires RE/MAX to assist in verifying documents either before or during hearings and trials.
A spokesperson for Anywhere provided a portion of its settlement agreement, which contained very similar stipulations and language around cooperation.
A RE/MAX spokesperson said that costs associated with the cooperation portions of the agreement are already baked in to the $55 million total, but declined to comment on other details, adding that the company “assert(s) that protecting the U.S. RE/MAX network of Broker/Owners and agents from costly litigation and the risk of further damages makes this settlement the right course of action.”
Even with these settlements, the road ahead in the ongoing saga of commission lawsuits is likely a long one, with other interrelated issues. As some companies call for further distancing from NAR, these suits, and a dormant Department of Justice investigation, could potentially push for further changes and penalties.
Another lawsuit, specifically targeting NAR’s “clear cooperation” policy and some of the country’s largest MLSs, is scheduled for trial in early 2025.
