Keller Williams move brings broker fee case closer to conclusion

Keller Williams is latest company to settle real estate agent commission lawsuit, reducing its liability to $70 million After the jury returned a negative verdict and two other defendants to pay US$1.785 billion.

unlike Remax and anywhereKeller Williams is on trial with the National Association of Realtors and Home Services in a case known as Sitzer/Burnett. The settlement also covers cases named Moehrl and Nosalek.

“We believe settlement is the most reasonable path for defendants to significantly avoid higher damages and/or a lengthy and uncertain appeals process,” Keefe, Bruyette & Woods analyst Ryan Tomasello said in a note after the agreement was announced. .”

KBW continues to believe that the current practice of sellers paying buyer agent commissions will be prohibited, whether through a court-ordered injunction, a court settlement with NAR or intervention by the Department of Justice.Justice Department briefly agreed to cooperate with NAR during settlement with Trump administration But pulled it out After President Biden was elected.

“Based on various court deadlines, we believe this legal dispute is likely to be closer to resolution by mid-year,” Tomasello wrote.

However, some in the mortgage industry are concerned about changes to the real estate commission payment structure will have a negative impact on many buyers They’re already struggling with affordability.

While HomeServices and NAR remain defendants in these cases, “nearly every other leading brokerage firm in the country is also named in approximately 20 ‘copycat’ lawsuits, including public brokerages Compass and Redfin,” he continued.

Meanwhile, executive chairman Gary Keller said in a statement that the post-judgment transaction not only benefits Keller Williams, but also Keller Williams’ agents and franchisees. Operators are protected from lawsuits related to commission payments to buyer’s agents.

“Keller Williams has always been committed to creating a place where entrepreneurs can thrive,” he added. “As part of that, agents have always had the freedom to run their businesses, including deciding how much they charge for their services and negotiating with clients.” compensation”.

Judge Stephen Bough granted a motion for preliminary approval of the settlement pending a hearing, according to the case docket. The settlement agreement adds that Anywhere and Remax will not oppose the motion as long as the current May 9 date for final approval of the matter has not been reached. changed.

This is required because certain notices for these cases are being modified to include Keller Williams to reduce costs.

In addition, Redfin, which terminated its NAR membership due to cost issues, launched a refund program for home buyers called “Sign & Save.”

Buyers who sign an agreement with a Redfin agent before taking a second tour will be entitled to a rebate of 25 basis points to 50 basis points on the purchase price of the home at closing

“Homebuyers are increasingly aware of the high cost of agent fees and are no longer apologetic about negotiating commissions,” Jason Aleem, Redfin’s senior vice president of real estate, said in the release. “We helped pioneer This new era brings price transparency by promoting our low listing fees and posting buyer agent commissions on every listing on our website. Sign & Save is another opportunity for our agents to explain the fees involved in a transaction.”

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